Got Connection? Get Hosting!











 

 

"By the time small businesses write a check each month for their Internet connection, they've stopped thinking about what they can really do with it beyond surfing and E-mailing."

Dear Internet Service Salesman,

Thank you for trying to sell your service to our customers. It was not my intention to rake you over the coals. Who am I to criticize your services?

Well, I'm the customer's counsel, and I'm saying what they don't know how to articulate: "Empower me to get my message out to my customers. Give me control. Don't take it away from me. Don't open a door for the world to dump pitches on my porch. I want to give my pitch to the world."

So in the end it comes down to price. Granted you showed that your technology is better, but I can't sell my customers even a slightly more expensive service when they are so happy with what they have.

On reflection, I see an inherent conflict between our businesses. We both provide the man power needed to test, order, and then install fast Internet connections. As they say, two cooks spoil the soup.

I'm not afraid you would steal my business. My concern is that you are not 100% focused on providing Internet service. You have overhead that dictates your rates. We offer high level service for half your price because we don't pay rent on a whole floor downtown. Yes, yes, we may not be the fastest, but that doesn't matter. Our customers have been running a battery of self-hosted services (i.e. web, E-mail, database, FTP, etc.) without a complaint.

Which raises the deeper conflict; your business model is not geared toward end user self-hosting. Our partners aren't against it either, but they do make self-hosting possible because their price is so low. So our customers not only save money, they have control and that makes them feel good.

Take one customer for example: You lost them because they turned to us to help them host their own web and E-mail server. Although you proved your service was a few milliseconds faster, that's an incremental improvement that isn't justified by the increased cost of your service.

The value to the customer is that there's no more web-hosting middle man to slow down support issues. We've reduced the players to the most simple basic configuration that still provides amazing results for so little.

Which, I might add, makes it easier for us to sell other solutions that the customer needs.

Which, in turn, leads to the real challenges faced by the broadband industry and account managers like yourself: Greed and conflicted services.

By the time small businesses write a check each month for the connection, they've stopped thinking about what they can really do with that connection beyond surfing and E-mailing.

That's why all bandwidth options have higher download speeds than the upload speeds. It should be the other way around! Business would get more from their service if they could give information faster than they get it. I cannot stress that enough.

The broadband industry is shooting itself in the foot, missing the pot of gold, and hurting customers in the long run.

You and the telcos and AOL Time Warner want to be everything to every customer. You want broadband subscriptions but you also want to be domain hosts, support providers, and web designers.

In the end the customer pays a lot and gets relatively little because each of those services is watered down by "package" deals and compromised proficiency in each area.

INS is no AOL, but we are positioning ourselves to offer the market custom-class, self-hosting solutions that reduce network and server infrastructure costs to an
amount that will fit comfortably within small office budgets.

That's 90% of the nation's businesses. Less than 1% of that segment is enjoying self-hosted services. That's a wide open market.

INS can vest itself to penetrate this market. What we are waiting for is the broadband industry to stabilize and then reduce it's pricing. It may never stabilize and prices may never go down.

The telco and cable giants may have already cornered the market and locked customers into sub-standard service and non-expert consulting.

After all, their mission is to keep customers ignorant so they can get paid for not giving customers what they really want and need.

So be it.

Even at the current prices we can convince potential customers that they would get an acceptable ROI - if they self-host.

If customers only knew. They are willing to learn. Which is why you should educate the market on the benefits of self-hosting and send them to support outfits like us who can work within small business budgets. You get the subscriptions, we get the end users, end users get the best of both worlds and everyone wins.

Here's how we do it:

1) Customer replies to our advertising promising that they can

a) Host multiple domains for only the the cost of domain registration.

b) Run multiple full-featured web and ftp services on each of those domains.

c) Run an E-mail server that supports unlimited accounts on each of those domains, blocks spam, reports staff usage, and all of the other features such as account mirroring, auto replies, web interface, etc., for free.

d) Sell their products using secure credit card authorization and back-end, cross-platform inventory update and sales reporting.

e) Be wide open to any custom database or web development.

f) Customize and activate one website enabled to sell products and distribute information.


2) We sell that server system for $3,000 with E-commerce, or for $2,000 for non E-commerce.

3) We sign them up for ADSL service from our partners so one of their recurring charges is $1,200 annually.

4) The other recurring charges are $250/year for the credit card verification provider if using E-commerce.

5) The other recurring charge is $15.00/year per domain.

6) We sell them a support contract for the Internet server or their whole system at a price determined by the level of server customization or the size of their business. They can forego support if that is their choice.

All of this is contradiction to the trend toward outsourcing web hosting services. But that trend is not applicable to the small business marke t- the market we support - the market with the most total dollars.

Outsourcing web sites is too costly and unstable for small businesses. It is only a matter of time until the outsourcing provider either goes belly up, or raises it's prices, or changes it's policies, or gets bought out.

One instance of that kind of upset wreaks havoc on a small business. When that kind of thing happens, small businesses, even indivduals, can only wish they already had their own servers.

The worst thing that can happen to an in-house hosting setup is the connection provider goes belly up. Fixing that is a matter of changing an IP address, nothing more.

There hasn't been a provider yet that fits our needs 100%. Which may mean we stand alone, but I think we will stand the test of time. Actually, I know of a few other consultants like me who are setting up customers with their own in-house servers. Those customers are looking at us to get them set up with our partners just to save $600.00 a year.

Anyway, I hope I gave you food for thought. Please share my concerns with your boss.

Aloha,
Kent Roller
President, Island Network Solutions, LLC

 

Top