Better, and pondering things.

I started feeling better on Tuesday, and yesterday I was finally able to smile again. Being able to smile was a nice relief. I felt a lot better just because I knew I wasn’t looking scary any more.

I’m at ModernBill’s 2nd Annual Hosting Workshop in Louisville, KY. I got invited here by Adam Harris, who wrote a piece of software called NOCManager, which helps dedicated server and colocation companies manage their customers. It looks like a great piece of software and I’ve already agreed that we will implement at least a trial run at Simpli. This is good news for those of you who are dedicated server or colocation customers of ours; it will give you one place to manage all aspects of your servers, including billing, bandwidth graphs and remote reboots. It will also help us because we will be able to broaden our managed services offers to include more comprehensive uptime monitoring, etc. All of this will continue to help Simpli move upmarket.

The people here are an interesting mix of hosting company owners and vendors. The hosting company owners run the gamut from tiny hosting companies with 1 or 2 employees and a few shared hosting customers all the way to quite large companies that own datacenters and/or own thousands of servers. I was happy to see that there was one other female hosting company owner here, which gave me a bit of hope that more women are starting to understand this industry.

The talks followed “tracks” that ran at the same time. One track was for customers implementing ModernBill, one was for developers, and one was a general track for business owners that focused not only on technology, but on marketing. The marketing sessions were the most interesting to me. One devolved into a bitchfest about GoDaddy, Yahoo, Google, and others who have driven (or are trying to drive) stakes through the entire industry by devaluing shared hosting almost to $0. An interesting side note is that last night, during the after-party, ModernBill announced that they had a new partner. When they told us who it was, the audience didn’t cheer or applaud, but instead stirred uncomfortably. I noticed the whole atmosphere in the room change in a moment from celebratory to downright cold. Some people grumbled. ModernBill’s new partner? Google.

Why the hostility toward Google? The web hosting industry (and in particular, shared hosting companies) are scared of Google. They are scared for their lives. Think of the mom-and-pop stores that died out when Wal-Mart came to town. There are many mom-and-pop hosting companies that are convinced Google will come out with a free hosting strategy that their customers will switch to. These small companies have worked hard to build up a solid base of customers, and here is a lumbering behemoth ready to put them out of business because they can stick ads on their customers’ websites. Mark my words: No one in the shared hosting industry is a Google fan.

So what was the ModernBill partnership with Google? They’re going to offer free AdWords credits to ModernBill customers who sign up for a new AdWords account, as well as offer the ability for hosting companies that use ModernBill to offer AdWords credits to people who sign up for hosting accounts. The incentives are nice, but the main concern running through the audience was “Do I really want to put my customers in Google’s hands?” There is a fear — perhaps baseless, but there nonetheless — that by putting their customers in touch with Google through AdWords, that Google will be in a position to upsell those AdWords customers later with services that look suspiciously like web hosting. I’m sure some companies will take advantage of the AdWords credits. We may do it with dedicated and colocation customers. But shared hosting? Don’t count on the mom-and-pops to offer it even if it is available through ModernBill.

I also met a hosting company owner who is a really interesting guy. His company (I recognized both his name and his company’s name) is a fairly large “everything hosting” company — shared, reseller, VPS, dedicated, colo, you name it. He is only 26 years old, but already has created a multi-million dollar business that is quite well known for its excellent support. They answer all support tickets within 15 minutes 24×7. I talked to him at length, trying to get a grasp on his business model. You see, Simpli is stuck in a sort of gap. I’d love to be able to offer 15-minute response times 24×7. It would be great and of course our customers would be highly enthusiastic about it. However, it’s not realistic with our pricing structure, and if we raised our prices to the level we’d have to to offer something like that, many of our existing customers would leave.

The reason I’m stuck is that we have so many customers that I genuinely enjoy who don’t want or need managed services. They never call our support line anyway, or if they do, it’s a true emergency. They’re smart, technically savvy, and don’t complain unless something is seriously wrong. I want to keep these customers. But I also want to be able to cater to companies that need managed services. This puts me in a rather awkward position. This is why, with our new website design, I’m making a clear delineation between managed and unmanaged services. Managed services will have an SLA that is much higher than unmanaged services, not in terms of uptime (which will always be 100%) but in terms of support response.

I also (and I just made this decision) want to pull a bit farther away from “completely unmanaged.” We do not set proper expectations with our current website. We offer unmanaged dedicated servers but don’t specifically state our definition of “unmanaged”. We don’t have a clear enough policy of when to charge colo customers for remote hands. These are policy issues that need to be clarified and codified on our new website. Furthermore, we can offer services by default to unmanaged customers, like remote KVM, and raise our prices a bit. I do believe most of our unmanaged customers would pay, say, $20/month more for 24×7 guaranteed remote KVM access. This is, as far as I am concerned, not just an upsell, but a new way of thinking about things. Offer things to unmanaged customers by default, but not things like “system admin” that are frou-frou to these guys. Offer them 24×7 remote KVM, remote reboot, tools to monitor services on their server, a completely customizable (clickable customizable high-end Netscreen!) firewall, and the option to load-balance their servers. This is a completely new breed of “unmanaged” that I think Simpli is in a unique position to tap. This also puts us squarely in the high-end hosting market without having to say we’re managed and offer the system administration that most of our customers don’t need.

I’ll be exploring this much further in the next few months.