B10WH

Last year was my first one at the WebhostingDay. I have made and interview with Kirsten Nothbaum of WHD team titled “WebhostingDay Brings Together The Brightest In The Industry” and went to the show after that. Some pictures from WebhostingDay have been published here after the conference. One year later I’m planing to go to WHD 2010 which takes place in the same Phantasialand near Cologne again. The 2010 event is focused on cloud computing and I have an increased expectations to learn some new things about the emerging cloud hosting industry, that I don’t know… I think it wouldn’t be hard ;)

The last year’s WHD was well organized and anyone who I met there said very kind word about the team behind the show. It is worth to attend. A month and a half before the show B10WH.com speaks to Thomas Strohe, the man behind the event. Take 10 minutes of your time to read our interview with him.

Hi Thomas, let me ask you first what is the difference between last year’s WebhostingDay and WHD 2010? Will you welcome more participants this year, is there a growing commercial interest, or any new sessions?

Of course, we hope that at least as many attendees as last year will sing up. And regarding current numbers, it looks more than promising (registration is still possible until March 4th). With regard to official WebhostingDay partners - these are the companies having talks or/and exhibiting at the fair - and media partners we could already achieve an increase as compared to 2009. Now there are almost 80 partners altogether, while there were about 60 of them last year. Therefore, we will have a completely redesigned fair area, more keynotes and more rooms for the so-called hosting.SESSIONs.

Has the cloud computing trend changed the agenda of this year’s WebhostingDay, if you compare it to 2009 even? Last year “cloud computing” was more a “magic phrase” than and something tangible. When you are looking at this year’s WHD, at the sponsors and participants, can you say that we have made a step ahead in process of moving to the clouds?

Yes, even last year the cloud was a very popular topic, which will be the case again this year. A great number of talks and sessions carry the word cloud in their title or it is at least mentioned in the abstract. Many of the presented solutions are designed for cloud computing or cloud hosting. Moreover, CloudCamp, a bar camp with experts from the cloud sector will be held again in the framework of WebhostingDay.

Please tell the readers of B10WH.com more about the WHD sessions. Which ones do you find most interesting, and which one was harder to organize? Who of the industry’s “marterminds” was harder to bring to speak at WHD?

In fact nobody had to be convinced to speak at WebhostingDay. The event is highly appreciated, and we even had to call off some potential speakers due to a lack of free speaking slots. But this was necessary, you know, as the schedule would have blown otherwise. However, panel discussions have now been added to the agenda, which allow for multiple speakers at a time to discuss current topics. These are probably very interesting for the audience, since different points of view are presented.

A part from IT giants like Microsoft and Intel last year Parallels looked like the one of the most important partners of WHD? Who is staring this year?

We are glad that we were able to enthuse those big players like Microsoft, Parallels, Intel, AMD, HP and Fujitsu for WebhostingDay again. But also the smaller businesses are very valuable partners for us, which either want to establish themselves or their products on the German market, or come from Europe and want to gain new customers from America or Asia by this means. The combination of “old hands” and newbies is what makes the event more diverting and interesting for visitors.

Do you have any partners who joined WHD for the first time this year?

Yes, there are several partners who have joined for the first time, e.g. GateSecure, who will be presenting a web filter, Genotec, an ISP from Switzerland, and STULZ, who work on data center cooling solutions, to name but a few.

On the website you say that WebHostingDay 2010 is “the most important web hosting event in the world”? Is the WHD really the biggest and most important event in web hosting industry? Do you compete for the top spot with HostingCon… or the WHD is focused mostly on the European web hosting markets?

Looking at the numbers of visitors and exhibitors, WebhostingDay really is the world’s largest web hosting event. And even if the majority comes from Europe today, we can detect a clear development to more and more international audience. By the way, we do not see HostingCon as a rival, but both events as having a friendly coexistence.

As an organizer of a major industry event you receive a lot of insight information which helps you to better understand the market’s developments. Let me ask you is the North American web hosting industry more innovative than the European markets… if we look at the cloud computing we will see that most cloud hosting providers we can find on the market are American?

I don’t think that North-American web hosting companies are more innovative than European companies. But the continent as a whole gets more attention due to giants like Google or Amazon. The potential of the cloud has been recognized in Europe, of course, and many companies begun developing very specialized solutions for B2B purposes. As many innovations are not targeting the end user, they are not talked about so much in the public. When visiting WebhostingDay you will be able to meet many of those companies and solutions.

How do use see the German hosting market from a cloud computing perspective? Are the German businesses more skeptical or enthusiastic when it comes to cloud computing and cloud hosting infrastructures?

Basically, German companies are open-minded for this topic, but it will probably take some time until a majority of companies has changed their infrastructure respectively. Especially in times of uncertain economic situations, people will likely wait and see until new things are tried and tested before investing into them.

I hope you can answer a question from a provider’s perspective. What do you think would happen with the “good old server” within the next year? Do you see many people who used to use physical dedicated servers to migrate to virtual machines?

As far as the respective offers are attractive regarding price and performance I see potential indeed. We have been offering virtually dedicated servers ourselves with one of our brands for many years now, which have gained more and more approval over the years. If the performance of these systems can meet the highest professional demands in future, it is likely that many people will choose this alternative in order to save some cost.

There has been a lot of talk about the financial crisis. It has become the most used “word” and probably the most used explanation of anyone’s business failure within the last 2 years… Is the current financial situation in Europe and Germany hitting the web hosting sector?

Luckily, the hosting industry has suffered quite little from the crisis so far. That is because server-based applications are used in every modern company for daily work, so that they cannot really cut down on them. Of course it happened here and there that some clients broke away because they became insolvent, but generally speaking it did not hurt the industry so badly.

Now I have a question about the WHD 2010. I’m curious why don’t you change the place or the time when WHD takes place? It is always in Phantasialand, which is OK, but if you decide to host the event between May and September there shall be much more fun for the attendees?

We are very satisfied with Phantasialand as conference venue, because it offers, for instance, a central location in Germany that can be reached easily from everywhere. Additionally, it has the equipment we need and we have made good experiences in working together with their team. Regarding the time, it is quite close to CeBIT, which attracts many visitors from abroad. That way they get the chance to combine both events in one journey. And if we made it in summer, the theme park would normally be open to the public and it would be impossible to close it for the event without causing unnecessary cost.

Did you get yourself in any funny situations during the last year’s WHD or through the years. Something related to the organization, any mistakes taht you would share today?

There are always some minor mishaps, of course, which cannot be avoided even by the best organization. This begins with the weather – in 2008 our signposts in the park were blown down by the strong wind – and continues in technics, e.g. when one of our presentation notebooks falls down in the lecture room and has to be replaced quickly. But apart from that we have been spared from greater disasters so far. No speaker that became ill shortly before the event or complete power outage etc. Let’s hope it remains that way!

I’m sure that every entrepreneur has a story to tell about who did they get down to their business. Please tell me yours!

I founded my first company when I was only 15 years old and sort of operated it from my room. I had the idea to start the company when I detected a market gap in Germany in the area of dedicated hosting. It was an advantageous time for the IT sector and the company was able to grow quickly. Together with the brothers Jochen and Christoph Berger I founded Intergenia a few years later.

What did make you to organize WebhostingDay. You would have a successful business without being involved in this venue. Does it help you to stay connected to others in web hosting industry and do you learn anything from being part of it?

That’s right, even without being organizers of a hosting event we would have been equally successful as a company. But we actually had in mind then that by exchanging views between industry colleagues many valuable synergies could develop from which all involved parties could profit. Even if it would only mean to get to know each other better, which makes business easier in the follow-up. There had just been no such forum in Europe before. I wanted to close this gap.

Thank you very much for taking some of your time to talk for B10WH. See you in Cologne.

When we say “Ethics” we usually address questions about morality. In business the term “Ethics” (Business Ethics) refers to a form of applied ethics that examines ethical principles and problems that emerge in a business environment. Term “Ethics” applies to all  aspects of business… even to web hosting business, despite that many hosting providers obviously disagree with this (a conclusion we would make when carefully review their offerings, customer service and the way they promote themselves on the market).

I shall say that as any other markets of intangible business activities web hosting is quite unethical business. In general the web hosting market is more a competition of promotional techniques than a competition based on quality. The unethical competition was introduced into web hosting industry by the largest web hosts like Yahoo (the first major web host to introduce “unlimited disc space” in offerings) and many others who begun using disputable business practices to get customers and to fight competition. One of those practices is to give a hosting company a name which is very close to the one of already well-established market brand.

This was the case with RackShack, a popular dedicated hosting provider at the beginning of this decade. It attracted a lot of attention not just because of its aggressive dedicated server offerings, which included zero set0up fess cheap hardware and very poor technical support, but also because of manipulating the consumers by exploiting the concept and the name of an already well-established and very popular web hosting brand such as RackSpace.

Beginning with a conclusion that web hosting is in general unethical business - with both web hosting providers and their customers being unethical - in this “Have you say” story” B10WH will point your  attention to an ordinary discussion titled “Is it ethical web host practice?” which is taking place Web Hosting Talk forums titled. It was opened by a forum member signed as Jon.

“I’ll try to give my account as objectively as I can. I’m pretty upset/disappointed with my web host right now. What I want to know, is Is this how web hosts should treat their customers?” says Jon and explains that he went on vacation for 10 days, checking online for orders and was surprised that he hasn’t received any. He added that he was always on public computers and he had his emails forwarded to his Yahoo Mail.

When he got back for vacation, I found that I couldn’t access his e-mails directly and he also saw his website was “gone and in its place was a bunch of pay per click adds, with a note on top that the domain was expired”. Jon thought he had paid up for another year, and that decided that his web host would never treat him like. So he assumes that someone was pirating his website.

But when he has contacted his web hosting provider the company’s representative told him that he has paid his web hosting plan but his domain was for some reason left unpaid and expired. The Credit card Jon had on account with the web host has also expired.

At this point he would decide that it was obviously his fault that his domain wasn’t renewed in time. However Jon went to Web Hosting talk and said:

“At this point I’m somewhat tiffed that they would not only take down my site, but replace it with pay per click adds, but think “hey, certainly they tried to contact me. My email address I have on file with them must be out of date”. So I go into cpanel to update it, but no, it is current. They never even tried to contact me, not even sending an email.”

Jon explained to WHT members that his website “had no traffic for a week and a half” and at the time he opened a thread in the forum his site still “wasn’t showing up on Google searches”. “My traffic is down to 1/3 of normal. Seems I’ve heard that Google penalizes sites that are entirely made up of pay per click adds, and I think it likely that my site has been penalized because of my web hosts actions”, said Jon and asked “It’s impossible to determine how much this will end up costing me. I feel that when you hire somebody (i.e. a webhost) they should be on your side, not stab you in the back. I don’t know if what they did was illegal, but I certainly think it was unethical”. The he asked the forum members - “What is your take?”.

What have you said?

“Maniakaz” a WHT user from Lithuania responded: “If it is domain that expires, you should have received warning emails. At least I do get them from GoDaddy: warning, your domain expires after xx days, click there to renew it. Maybe these emails went to “spam” folder? re-check. Or ask a host if they did sent these emails. I think, you may want to change registrar to something more reliable, like Godaddy. And your host’s practices are weird. I can’t call it unethical: if client knows he will not receive any domain expiring email - customer should decide”.

Another forum member “Rumsfo” responded with these three sentences - “I assume uptime that is very important issue for the Google as for any other SE. I assume you need to move to another web hosting service and ask for the refund. I assume that would be fair enough”. This comment wasn’t very much on the topic, but the next one posted by member “Bihira” was pretty specific.

“Most hosting companies don’t use the email address in cPanel as the main contact for customer accounts. More than likely they have a billing script, you should look for this script and update your email address there. Also it’s pretty normal for registrars to put up ads on expired domains (e.g. I bilieve GoDaddy does this as well). Not saying it is right, but it’s unfortuantly the norm. Also I would never recommand GoDaddy as a registrar, just check out nodaddy.com for horror stories. Though generally it’s better if you keep your webhost and domain at seperate companies”, explained Bihira. The WHT user added that “there isn’t nothing your webhost could of done”, and explained that since Jon had an unpaid invoice for his domain the web host couldn’t renew the domain name before receiving a payment. “As they get charged a fee everytime they renew / register / transfer a domain. So they need to wait for you to pay the invoice” said also Bihira.

Another member with a forum name “fobic” singed as Chris said that he was “with Bihira on this one”. “To put it bluntly, you didn’t pay your domain renewal so it expired. Expired domains commonly show the registrar’s parking page - the ads page you saw is most likely the standard page for whatever registrar your host uses”, said Chris and added that the web host should have tried to contact Jon about the domain expiration and about the expired credit card on account. “I’m betting they did email you about this. For some reason you didn’t receive their emails and that’s unfortunate, but ultimately it’s still your responsibility to keep your details up to date and pay your bills on time” concluded Chris.

“NeutroHost [Nix]” posted that since it was a domain name issue, it was probably not the host’s fault. “The reality is that most webhosts resell through a domain name registrar like Enom or Namecheap and the ads are placed on your website by the domain name registrar when your domain name expires, not the host” said Nix and added “I can understand your frustration with the matter though, but it’s been the norm for a long time”.

“Sorry to hear about your troubles. Did you find out if your host tried to contact you? I would think at the very least the domain registrar send out a notice, unless your name and email address isn’t on the domain. You should make sure that your the registrant contact for any domain you own and keep the contact email address up-to-date at the domain registrar”, said “SphereWebHosting” in their post.

Then a pretty harsh but true comment came. A WHT member named “ieee488″ said:

In all likelihood this is what happened. All domain registrars that I have used, and I have used about 6+ different ones, they notifiy you 60 days, sometimes 90 days in advance that your domain is expiring. That you didn’t get an email tells me either those emails went into your spam folder or you used a different email when registering your domain.

The person Jon should be pointing the finger at is HIMSELF.

The “ieee488″ added that before Jon start throwing words like ‘unethical’ he had better know what he were doing and understand the actualy workings of webhosting and domain registration. “Otherwise, you look like an idiot”, said Ieee488. and added “My take is that you stabbed yourself in the back unless you for some reason pay for webhosting and domain registration combined”.

Jon obviously got affected from the last comment and responded: “This is why I posted the experience and asked if it was unethical, as it seemed to me. It’s also why I didn’t identify the web host. There is no need for name calling. I appreciate the comments about contact emails other than on cpanel. I’m sure that messages didn’t get sent to my spam folder, but I’ll look for other places they may have my email address on file”, said the troubled site owner.

“Jon, a hard lesson learned, unfortunately. IMO, (and I know many hosts will hate me for saying this), but I would never register my domain via a web host. I want complete autonomy for the domain registration. Register all your domains directly with an authorized registrar, and then buy your hosting from a web host. Keep them separate. And then make sure you stay on top of your domain renewals to ensure you don’t go through this grief again”, said someone with forum member “Vito” and his opinion was one of the best to the thread.

Then “ieee488″ came again posting in aggressive style: “I repeat. No need to use the word ‘unethical’. You should have asked what could have happened and just leave it at that. I have no use for people who hide behind “what do you think?” after they have just accused someone of being ‘unethical’. Gutless.”, was his next post to the thread.

A WHT member “HostColor” suggested in the next post that that Jon must not be disappointed and must not blame his web hosting provider. “You are responsible for the domain name as it is yours. Even if the hosting provider didn’t send a notification you still had to take care of the domain renewal. It is your web address, your property”, explained “HostColor”.

THe user added that the domain registrar was probably the one to point the name servers to page different from Jon’s index page and displayed ads there. “This is another way for domain registrars to make money of expired domain names”, added the WHT user. His final suggestion to Jon was “Just keep everything into account. A reasonable question would be “Why did I miss to renew my domain name?”

These are only a few selected opinions expressed from WHt members in the thread titled “Is this ethical web host practice?“. I would say that it shows very clear that not just the providers are those who act unethical in web hosting industry. In fact Jon didn’t been unethical and didn’t harmed its web host’s reputation by posting company’s name in the thread in which he expressed his disappointment of the service. Although Jon haven’t been responsible enough for renewing his domain name on time he was decent in his WHT thread, something that is ethical in an unethical market.

This year’s exhibition hall of the HostingCon was smaller compared to the one that hosted exhibitors previous year, but most attendees said that it was more convenient. We have spoken to many of the exhibitors you can see below and all of them said they are very satisfied of the way HostingCon 2009 was organized. Most said that the conference was successful for them and they had a good business during the exhibition days - August 11 and 12. One of the biggest exhibitors were Softlayer, Parallels, cPanel and Microsoft. TheWHIR sponsored the networking lounge inside the exhibition hall. If there were are competition for a booth design Parallels would probably win. 2CheckOut, a provide or payment services fro web hosts in countries with undeveloped dot-com economies was on the show and I was surprised of this. But the company has specialized in providing payment solutions for the web hosting industry.

Aflexi - collaborative CDN software producer.

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The guys from BackupAgent.

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The famous Web Hosting Talk.

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Realtime Register - Dutch Domain registrar that offers nice prices on general TLD’s and on European domain names.

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The booth of HostingControler.

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The booth of HostingControler.

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Hosting Panama, a good place for outsourcing.

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SpamExperts, another Dutch company. Dutch dot-com businesses have one of the best designed booths at the show.

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Steadfast staff at the company’s booth. We have never heard of this web host, but decided to take a picture of its booth because of the catchy green color.

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Trustwave, a company that provides SSl certificates and other e-commerce products.

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DemoWolf, the most popular provider of tutorials for the web hosting industry.

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Ping!Zine, the longest running print magazine in web hosting industry.

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Teresa and Alisa from VeriSign.

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The 2Checkout booth at the con.

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Keith Dunkan, the publisher of Ping!Zine and Dimitar Avramov, the CEO of SingleOS.

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Parallels, the only web hosting events you can not see them are those organized by their competitors.

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cPanel, the most popular web hosting control panel was one of the featured exhibitors at the HostingCon 2009.

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The guys from DotNetPanel, a Windows web hosting control panel.

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The most stupid question in web hosting industry probably is the one like “Which Are Top 10 Shared Hosting Providers?”. It is so stupid, that actually there is no answer. But thousands of money-making chasers give a birth “Top Hosting Directory” every single day. And that’s why there are a bunch of top or best web hosting site and directories out there. Some of them even receive high ranking in search engine result pages and bring thousands of dollars to their owners.

B10WH was there 4 years ago. But we decided to change the concept. At the same time we still pay attention to those who spend a loft of time to build the next top web hosting list. Today in “Have You Say” we will target your attention to a discussion in web hosting talk titled “Top 10 Shared Hosting Providers - What Are Your Thoughts”.

“Hello. I am new to WHT and a grad student at University of Texas. My purpose for joining is to gain research for a thesis I am doing titled “Internet - Where it all begins?” My focus is on the hosting provider side of the industry considering it is a $19 Billion dollar industry” says the WHT user “HostingResearcher” in a thread. He explains that the research that he found has lead him many different directions.

“There are many sites to tell you who the top 10 providers are within the industry, however they provide no background data on why”.

“It seems there are many website that tell you who the Top 10 providers are within the industry, however they provide no background data on why”, says the forum member. He also explains that there are some sights that provide user reviews, “however small sample data”. “This need for data brings me to you all” posts HostingResearcher and asks the questions ”Who is the best shared hosting company?”, and “What makes them the best?”.

He also asks Web Hosting Talk members to help him to gather this data by responding via this quick survey. HostingResearcher calls WHT members to rate between 1 and 5 the web hosts’ - Service Offerings, Pricing, Customer Service, Market Perception, Experience, Quality.

What have you said?

“There are no “best” hosts. The top sites are mostly affiliate payout sites, pretty worthless what’s best for me may be terrible for you and vice versa - it all depends on what you find best and how the host works with you and/or for you”, wrote “njoker555″.

“There must be some consistency from one provider to the next. It seems that most of the shared hosting providers offer similar packages for space, control panel, bandwidth, support, and pricing. If you had to purchase a shared hosting package today, then who would you look at first?”, responds the “HostingResearcher”.

Another WHT member “SoftsysHosting-Rick” says that most of the top 10 that you’ll be looking at will be the hosts who pay good sum of $$ for getting up in the list. “However, as njoker mentioned, it all depends on your usage and it will be really difficult for you to come up with a list of say top 10 or top 20 hosts - the reason is simply that top 10 hosts differ from requirements to requirements”. ads the forum member.

“Hence, what I’d suggest you to do is to first gather different kind of requirements amongst customers and thereafter come up with top 10/20 hosts for each specific requirements. These requirements can be in terms of platform of hosting (Linux/Windows), type of hosting (shared/reseller/vps/dedicated), kind of hosting (website hosting/database hosting/email hosting/backup/all), etc. I believe, you will need to do quite a good amount of research and thereafter come up with your requirements after which you should be looking at customer inputs for their best host matching specific requirements. Fortunately, you are at the right place and you will get good amount of data/help from folks here”,  explains “SoftsysHosting-Rick”.

“CodyRo” a forum member with 478 posts (at the time when they joined the conversation) said that it’s going to be very tough to make a conclusive list.

“For instance you have some smaller companies that people are very happy with, but their customer base is not nearly as far reaching as the larger hosts. As a result it’s going to be very difficult to get a consistent answer - especially on forums such as these where the small / medium sized hosts often have a decent following. Also things such as quality are merely perceptions and opinion. It’s going to be difficult to gather enough hard data based on that criteria”, explains CodyRo.

Ldcdc (Dan of WHReviews), on of the most fanatical WHT members with status “Community Liaison 2.0″ who has 17,997 posts in Web Hosting Talk said it would be quite fantastic indeed and commented that anyone who wants to categorize the top share hosting providers needs may have to do their own research using the forum and some of the so called “top web hosting directories”. “How accurate it will all be, would end up being an endless debate. I know it for a fact that on one of them, some of the reviews were planted by the host itself, so the defense systems of these sites (those that actually have such) are not perfect. Then again, what is perfect in this world”, writes Ldcdc.

The next poster “NetDistrict” adds that he doesn’t think that people would need to look at how large a any web hosting company is. “This is less important to what the hosting company can offer the customer the quality, support options and prices of the hosting company”, posts NetDistrict.

The last in the line Host Color posts that they think that the price of web hosting services should be explained and the prospective customers must know what they pay for.

“There are companies that sell cheap, but don’t use redundant network or even a SLA. Others are very stable in terms of network and facilities but their support is not that good. From my point of view the quality of customer service is crucial in our industry. The communication with customers must be well organized and automated. However a high level of automatization is not just about buying software. It depends of how any web host manages different processes”, ads HostColor.

Thread is still open - http://www.webhostingtalk.com/showthread.php?t=873969. You may join but, following the discussion and posting meaningful is a must

Siteground became another shared hosting provider that went “Unlimited”. The web host used to be number 1 ranked website in Google on “web hosting” search term for almost 2 years. It was known with its unrealistic offerings, which featured 200 GB disc space as a part of shared hosting plans.

However as many other oversellers, Siteground succeeded to attract customers and hasn’t failed to provide them with a decent service and good customer support. The company has been an advertiser of B10WH.com at the time when our web hosting media was more top web hosting list than an original resource for web hosting related content.

Salute Siteground! Unlimited sounds better than 200 GB disc space on shared server. Now the web host’s customers can not ask for their 200 gigs because no one know how much “unlimited” is?

We all know what investment banking is, or at least most of us have learned something about investment banking… thanks to financial crisis. Well today “Investment banker” is probably not the most appreciated job in the world. Sadly most people are tending to think that investment bankers are guilty for the current global economic slowdown. Well I’m not one of them. So when I met Frank from Cheval Capital I was interested of his business. I asked them whether he would talk to B10WH and Daw Blog readers and he said “Yes!”.

Hi Frank, good to talk to you. There is a lot of things anyone would like to ask an investment banker (or at least I think so), during the current crisis. Let me start with this one. Is the financial crisis affecting the web hosting industry? My impression is that web hosting industry looks pretty much as isolated island, that does not need bailouts… It that true?

Hi Dimitar.  Its great to talk with you as well. I think your impression is largely right (at least so far.)  We’ve talked to a lot of hosters and our sense is that while most are doing fine, growth has slowed.  A line from the recent Microsoft conference that rang true was “steady is the new growth.”

After two years of web hosting mergers and acquisitions are the investors still interested of buying hosting companies? Which is the most interesting market niche - data centers and collocation providers, dedicated and managed hosts, VPS providers or Shared hosts?

While we have seen fewer buyers, there are still a number out there.  Keep in mind that the most common type of buyer is another hosting company that is choosing to add customers by purchase versus marketing.  As this type of buyer tends to buy out of cash flow, financing isn’t a problem.

Right now, we’re being most aggressive in buying shared hosting customers at good prices.  Overall, there seems to be demand in all the sectors we work in.

Do you think that once the crisis is over, there will be a growing investor interest in buying cloud computing and cloud hosting technology producers and providers?

I’m not great at predictions.  To me, it comes down to value.  If cloud operators can add customers at cost effective rates and thus create value, then investors will always be there.  Unfortunately, the tech sector is littered with great technologies that no one would buy.  All in all though, cloud computing looks pretty good.

I have seen that Cheval Capital have completed 29 transactions in 2008. Do you think you’ll make more in 2009?

I hope the trend continues but you never know ;-).  We’ve been very fortunate since we got started in the space in the late 1990’s and have completed over 140 hosting and ISP transactions.

How big web hosting company in annual revenue should have someone to be an interesting client for Cheval Capital?

We work with companies of all sizes.  A few years ago we started a small hoster program that is working quite well.  We’ve also been involved with some of the industry’s largest transactions.  So really, all sizes.

Would you tell me which are the most important things anyone should be prepare when selling a web host hosting company?

That is really hard to answer generically.  The key is to have the information that enables you to demonstrate the value of your business and that it has reasonable risk profile.  Typically the larger the business, the great the expectation by Buyers of financial and operating metrics.

As you know, there are two broad types of buyers, “Consolidators” that want to buy customers and move them onto their own infrastructure and “Strategic Buyers” that want to purchase the whole company and operate it largely as is.  Both will want to confirm:

(1) the amount of revenue that your customers generate and the stability of that revenue

(2) your ability to add new customers at reasonable cost and the ability of the buyer to continue doing so.

The Strategic Buyer will also care about the efficiency of your business and its assets and liabilities.

The top three things all hosters must have are:

• An general overview of you, your company, its operations, etc.  (We have a form that we ask sellers to fill out that covers all of these topics.)
• Income statements for the last several months and for the previous year with revenues broken down by the type of business; and
• Backup to confirm those revenues (e.g. paypal, merchant acct stmts, etc.);

What about buyers… what do they want to see when they are looking to invest in web hosting business?

It really varies by buyer and the type of transaction.  Some buyers are creative and flexible and will look at anything that gives them a feel for the two items above.  Others are less so and require the other extreme of audited financial statements, tax returns, etc.  Typically, most Consolidators require less information.  I can’t stress enough that the key is to provide the buyer with confidence in the existence and stability of your customer base.

Something about Cheval Capital. Why did you decide to form an investment bank that specializes in web hosting industry? I’m curious how an investment banker decided to come to web hosting market.

Luck.  Our specialty has been working with venture capital backed companies that are consolidating industries or markets.  In the late 1990’s we got hired by Verio and the Centennial Funds to do ISP acquisitions and it just went from there.

What is your projections about the hosting industry’s developments? Do you expect growth in 2009, or web hosting will be affected from the global crisis?

I think the industry is fortunate in that it is a recurring revenue business with strong margins and, for most, little to no debt.  It also provides a service that is absolutely core to business.  Those characteristics should protect the industry from major trauma.  However, in bad times new company formation will slow and customers will go out of business.  Whether this causes the overall industry to shrink or just grow more slowly I don’t know.

Finally, is there are any company/brand in web hosting that you’ll love to consult, sale or buy?

We’ve been very lucky to work with a lot of great companies in the web hosting business, both large and small.  My hope is that it will continue.

Russia is a huge web hosting market and one of the countries with developed software market and IT industry. I have always been very curious about Russian web hosting market and its developments. So when I met Alexander Ovchinnikov Of Masterhost.ru I knew I was gonna interview him. And despite that I missed to see him at the Parallels Summit 2009 in Vegas where both us attended (it was my fault), I’ve finally made it. So here he is.

Hi Alexander, Can you please introduce Masterhost.ru to Daw’s readers (The interview was made for Dawhb.com blog, but I decided to published it in B10WH). How long have you been in business? What kind of hosting customers do you target?

Our Company was founded in 1999 and now it belongs to holdings.masterhost the biggest hosting provider in Russia and CIS.
We offer the wide spectrum of hosting services. Our product range includes virtual hosting based on the Unix and Windows platforms and Virtual Dedicated Server (VPS), location and lease of servers, lease of Microsoft applications (Software as a Service – SaaS), registration of domain names in different zones. Besides, we offer services of access Internet for providers of wireless and broadband access to World Wide Web to end users.

For years .Masterhost services were provided to more than 150 thousand people. Among the Corporate Clients are both private users from all regions of Russia and CIS countries and legal entities, comprising of big public and commercial companies, communication operators, Internet providers and others.

One of our foreground tasks in developing services within our hosting is integration of web-statistics from the SpyLOG Company (belonging to our Holding) with the .Masterhost hosting platform. Today all .Masterhost clients have access to free statistics services. They include reports with detailed visiting statistics by different parameters.

In 2008 the .Masterhost Company became a laureate of the RUnet Prize in nomination “Technology and Innovation”. This RUnet Prize was created in 2004 and is a national award in the sphere of high technologies stimulating companies operating in high technologies and Internet and rewarding for distinguished services in information technology and electronic communications.

Your starter shared hosting plan costs around $4/month. Is it one of the cheapest ones on the Russian Market and it offer “unlimited transfer”. How do you deal with this? Do your customer use their data transfer quotes and d you impose any restrictions on monthly traffic?

Competition among hosting providers motivates them to launch new tariffs with high functionality and minimum possible price on the market. Nevertheless, the today user choosing among hosting providers makes a reasonable decision and relies both on low price of services and stability and professionalism of the provider. These qualities help our company to be among the leading ones on the hosting market for many years.

Virtual hosting is used here not only by persons and small-size private companies but also by large enterprises if their business is not inseparably associated with Internet, i.e. the site does not generate a lot of traffic. In the hosting tariff plans traffic is offered to clients free of charge provided the following conditions are met:

• Incoming/ outgoing traffic ratio is over 1:4;
• Summary foreign incoming traffic does not exceed summary Russian incoming traffic and summary foreign outgoing traffic does not exceed summary Russian outgoing traffic.
• There are a few restrictions for virtual hosting, i.e. specific list of used software (applications, libraries and the like) and its settings which are determined by the provider administrators.

Do you offer Plesk only and if “Yes” can you please tell me what are the advantages of Plesk from your point of view?

To manage (administer) virtual or physical server we suggest our clients using a specialized program – the Plesk server control panel from Parallels. Thanks to simplicity of use the Plesk control panel server control functions can be performed by unskilled administrators. Using the control panel the administrator controls subsystems, applications, domains, users, and he or she can locate any site, create mail boxes for his or her colleagues and administer server parameters by analogy with virtual hosting services.

You are one of the very few web hosts that I know, who offer free web hosting for students? This is something people always appreciate, but does it pays… I mean  Why do you do this to support them and to increase brand’s awareness?

Education is the most important sphere of human activities providing forming and building-up of intellectual potential the need in which is growing by hyperbola. Internet must be a part of the program developing innovative education, a network for updating educational process.

Today we offer two free tariff plans within the educational program named “Student” in cooperation with Microsoft based on the Windows platform and “Education” based on the Unix platform. The “Student” tariff plan of .Masterhost offers free hosting services to students of institutions of higher professional education for educational and research purposes.

The “Education” tariff plan services are offered to both educational institutions and natural persons creating and supporting non-commercial projects associated with development and education subjects. Free platforms use conditions do not differ from the paid tariffs: professional equipment, 25 hour support, back-up copying and full range of services which the company offers to its clients under its motto “professional hosting”.

Do Russian site owners prefer .RU domains for primary web address for their sites? Can you rank the most popular TLD’s in Russia, or at least the ones your customers use?

In fact the users of Russian Internet prefer to register their sites on domains in the RU zones. Today the total number of registered domains in this zone amounts to 2 millions of domains.  The .Masterhost clients registered 85 000 domains in the Russian zone for the period the Company has been operating (since 1999).

The second most popular domain zone for our corporate clients is the international zone .com. Today .Masterhost  registered 10 000 domains in this zone.

Is .EU gaining popularity in Russia?

There are geographic restrictions in registering domains in the EU zone. The company must have its office or the main place of business in the territory of the European Union and the natural person must reside in EU. Russia does not belong to the European Union yet, that’s why domestic companies and citizens of our country can not register their sites in the EU zone for the time being.

I saw on your website you had at least 8 different seminars in 2008. Did they helped participants to better understand the topics you discussed and do you think that conferences help web companies to attract new customers?

Under present-day conditions of strong competition any telecommunication company must not only provide its clients with services but also show how to use these services most efficiently. At seminars held by our company our clients not only obtain theoretical knowledge but also get practical recommendations on service management, answers to questions on technical problems occurred in their business and unique methodical materials extracted from reports. Participation at seminars gives opportunity to exchange experience and make more balanced and sound decisions in choosing services of our company.

You have nice priced VPS hosting plans. I saw you use Virtuozzo Containers as virtualization technology? Why did you choose Parallel’s virtualization technology?

To realize VPS services we focused on reliable and regularly updated software which is easy to use and optimal in distributing resources of physical server among users of virtual dedicated servers. All virtualization systems have their advantages and disadvantages. Among virtual dedicated server support environments which we considered the Virtuozzo technology is the universally recognized leader.

This technology allows setting dynamic division of resources, creation of functionalities like parameters of physical server and combines flexibility in setting and control. Besides, use of this technology allows to minimize costs of the company spent on hosting services (compared to lease of physical server).

A few percents of resources of physical server are spent on virtualization using this technology, the others are to users. The used percents of resources are taken into account in filling physical server with VPS. These few percents include reserve for losses in virtualization and server control system.

Do you think that OS virtualization offers more advantages to consumers than WMware’s Virtual machines, which are based on full virtualization techniques?

These are different technologies and each has its drawbacks and advantages.

What kind of web hosting Russian site owners want much - Shared, VPS or Dedicated. Which one of these do grow faster?

According to statistics of our company more than 50% of clients choose virtual hosting being the cheapest and most popular. To administer its site the client does not need any specific knowledge, all support is given by the hosting provider.
Among our corporate clients the next most popular is lease and location of server (collocation and dedicated hosting).

The users of collocation administer their servers by themselves. The reasons are availability of a technical specialist in a company and sometimes a corporate procedure according to which access to internal resources is given only to insiders.
The most active users of dedicated and collocation services, as we think, are our operators, advertisement agencies, internet shops and suppliers of goods (dealers and distributors), game servers and the like. Ti sum up, they are representatives of the corporate market (mainly medium and big size business).

The “Virtual Dedicated Server” service is rather promising from the point of view of its functionality. The companies which “outgrew” usual virtual hosting but are still not ready to switch to “dedicated” server involving more financial expenses  for lease of equipment, support and administration, choose VPS. VPS in its essence is the intermediate option between virtual hosting and dedicated physical server.

We can point out that about 25% of users of “Virtual Dedicated Server” service of.masterhost “overgrew” virtual hosting.
VPS service is given to our clients on the Unix and Windows platforms. This technology is based on virtualization from the Parallels Company.

What is your projection for Russian hosting market and for web hosting market in general?

The main development trends of hosting market today are that conventional methods of hosting when advantages of a hosting provider are in tariff parameters (disc or mail space, number of mail boxes, address to data bases and the like) “fade” into the background.

At present potential clients choose tariffs to solve specific tasks including business ones in choosing among hosting providers.
Thus, hosting is often being considered in combination with suggested software or preset services by this or that tariff. First, we speak about ready decisions integrated into the hosting platform: professional scripts , modules, and systems.  They range from guest books, chats, forums to contents control systems for creation of online projects, for example, internet shops.
Thus, users of our company can install favorite CMS directly from the control panel by one key. And this option is active both for tariffs of virtual Unix hosting and for a new specially developed CMS Profi tariff.

The list of CMS for automated installation includes CMS systems being most popular among Russian users and is constantly being enlarged. Installation of CMS by certain tariff depends on technical characteristics of the tariff plan and software.