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Interview: Rackspace Co-chairman Morris Miller
Q: Rackspace is rolling out a new virtual hosting platform as part of an effort to attract more hosting resellers. What’s new, and how will this differ from the options available to resellers through your current offerings?
A: This reseller offering was born from our roots in the SME market. As Rackspace grew and matured, our managed hosting offering became more robust than the need of the traditional reseller. We’ve spoken with many of our reseller customers and involved them in the development of the ideal turnkey reseller engine. We believe we have come up with a customized offering that better suits the needs of our reseller customers. Look for a launch of our reseller offering in Q2 2004.
Q: Resellers offering shared hosting are grappling with tough competition on pricing. What do you see happening with hosting prices going forward? And how are these trends affecting your reseller customers?
A: Rackspace’s core managed hosting offer is a service differentiated by our Fanatical Support philosophy. Our customers realize the value of service and are willing to pay a fair price for it. So, overall we have not seen price erosion that we’ve heard about in the commodity spaces. We believe the same thing will happen in the shared hosting space. Customers will always pay a fair price premium for a better or richer service experience.
Q: Rackspace has one of the largest concentrations of machines running Red Hat Linux anywhere on the Internet. What is your plan with respect to Red Hat’s changes in support and licensing?
A: In July of 2003, Rackspace became the first hosting provider to offer Red
Hat Enterprise Server and Advanced Server. We view Red Hat as the standard
on Linux and their new strategy does not appear to change any of the benefits provided ...
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Go Daddy's Parsons Sees Lower Hosting Prices Ahead
“We develop our own technology and our own software,” said Parsons. “That’s one of the reasons we can have a low-cost model. It’s a formula that works, and once you hit critical mass, there are certain cost economies you can realize. We pass those savings along to our customers, and keep our prices about as skinny as we can.”
Thirty five of Go Daddy Group’s 317 employees are developers with Starfield Technologies, which was spun off as a separate company earlier this year. “When you’re using someone else’s software, you’re beholden to someone else’s schedule (on upgrades and improvements),” said Parsons. “We’re the masters of our own destiny, and we can turn on a dime. If you own the technology, you don’t have to pay licensing fees, and you have greater flexibility on pricing because you own all the margin.”
Low pricing is a bedrock business value for Parsons, who got his start in technology in 1984 when he founded Parsons Technology in his basement. The company, whose breakout product was the Logos Bible study software, grew to more than 1,000 employees and $90 million in annual sales before Parsons sold it to Intuit in 1996. He founded Go Daddy the following year in Scottsdale, Arizona.
A former Marine who received the Purple Heart in Vietnam, Parsons doesn’t seem to do anything halfway. He’s run with the bulls in Pamplona, completed two 26.2-mile marathons and gone bungee jumping in New Zealand. But Parsons’ appetite for adventure is balanced by the discipline of a CPA – which he is, having earned an accounting degree from the University of Baltimore.
From the outset, Go Daddy was engineered to manage high volume and tight margins, allowing it to undercut the $35 domain fees at Network Solutions and Register.com. That low overhead positions ...