It’s only February and already there are a couple of casualty hosting providers. A community driven hosting provider in Canberra had customers report, on its company forum and WP, downtime for over a dozen severs. We also saw reports of a Melbourne based hosting provider with servers being destroyed due to power overload. 7 servers were destroyed along with thousands of customer’s websites and emails that took over a week to recover. Can downtime be avoided? I believe it can if the right infrastructure is put in place.

When looking at this industry both here and overseas, it is flooded with thousands of small web hosting providers. The reasons why there are so many of them is due to the very low barriers of entry to set up a hosting business. You only need 3 things to start a hosting business: a cheap Dell server, a CRM system like MondernBill, and a customer control panel such as Plesk, cPanel or Ensim. Like most small businesses, they want to keep their costs low so they will start with one server and once filled with customers they will buy another one, and so on.

This model works fine if you offer a real budget service and only grow to around 10 servers. If you grow any bigger and want to offer more business grade services, you will run into trouble. The reasons are:

1. Single Dell Servers are not fully redundant. You will notice small hosting providers will talk about the ‘greatness’ of their new Dell servers but the reality is there is only a single point of failure. There is no clustering and no business continuity solution so there will always be downtime. Also, they don’t tell you the ratio between server capacity and customer numbers so you don’t know if they are cramming customers onto servers to reduce costs.
2. Third party control panels such as Plesk and cPanel are buggy and due to their proliferation are always under attack for security. Look what happened to Mdwebhosting 5 days before Christmas:
http://www.australianit.news.com.au/story/0,24897,22953634-5013044,00.html
3. Modernbill is a 3rd party CRM system which has many limitations. Firstly, you have to make this backend system available to the public through the internet (as opposed to a closed system intranet) to work correctly, with limited security features and limited flexibility to integrate innovate new products. Would you want your personal data available in a CRM system that is accessed via the web?

If you look at any large web hosting company in the USA or Australia, they do not adopt the above model. In Australia, there are only 3 web hosting companies that have built a complete customised solution that includes a fully clustered server and storage solution, their own control panels and their own CRM system. These companies include SmartyHost, NetRegistry and WebCentral.

SmartyHost built a technology which we called the Business Process Management system (BPM) which integrates and automates the entire business backend. It includes our CRM and server management. We have also built our own control panel. Our latest infrastructure is powered by Sun Microsystems (www.sun.com.au) which includes Quadcore servers, clustered and high end enterprise Storage Area Network. We have over a $1M worth of enterprise equipment located at OPTUS, main exchange data centre.

It is a real shame that customers are getting recycled in our industry. Customers are going from one small hosting provider to another. According to AusRegistry around 5,000 domains are churned every month in Australia. As customers move from one small hosting provider to another, they have great enthusiasm and hope that their website and data be safe and stay online. There is very little difference between each of these small hosting providers. They all claim to have the same cheap Dell server, they all have the same cPanel or Plesk control panel and they all manage your personal information in a CRM system called ModernBill. The only differentiation between these providers is different owners, company name, logo, prices, and hype.

As an industry we need to look beyond just MB’s of storage and price and look at what is really under the hood. Some questions to ask your provider are:
1. Do you have fully redundant servers with clustering?
2. Do you use enterprise grade servers such as SUN or IBM?
3. Do you store my website, email and information on a Storage Area Network (SAN)? Your information can only be secure and redundant if stored on a SAN.
4. Do you have an inhouse CRM system? Can it be accessed via the public internet?
5. Do you have a custom built control panel that you can support locally?
6. Where is my information stored? Is it a Carrier owned data centre or is it just a local data centre or local server room with possible power issues?
7. Do you host our DNS on the same servers that has our website data? If so then there is another single point of failure to watch out for.

Running a business doesn’t exactly give you a lot of spare time, especially if you combine it with an active 17 month old daughter. I have decided however to take the time and launch my blog to share insight into SmartyHost, tips and trick to promoting and growing your business and to provide my own industry perspectives.

We have just launched our new website which also marks a new beginning for the company. SmartyHost started with humble beginnings and has grown to be one of Australia’s largest web hosting and domain registration providers, now with over 50,000 accounts. When I incorporated SmartyHost in 2002, my ambition was to create the largest hosting company. Today, we are neither ‘the’ largest hosting company, nor thinking about becoming the largest (although this could eventuate given our current growth rate). I have learnt that goals and ambitions change and you need to adapt and embrace change in order to survive. The important thing to remember is what your core competencies are and stick to them.

I remember reading a story about a tube manufacturer who made chairs. Every one in this organisation believed they were in the ‘chair manufacturing business’. Once they realised this was not the case and they were actually in the business of making sophisticated metal tubing due to their specialised technology they were able to move into other markets such as Defence.

When I started SmartyHost the market was controlled by a few large players. WebCentral was the largest provider and they had signed Telstra, OPTUS, AAPT and a range of ISP’s as resellers. There was no choice for individuals and businesses other than paying huge fees. MelbourneIT at the time was charging over $300 for a .com.au domain name, which had also signed all the ISP’s as resellers. Where was the ACCC? Interestingly MelbourneIT now owns WebCentral. One can only imagine the arguments in this marriage.

At the time I was running a number of technology start ups and had to use WebCentral to host our websites and found their fees to be outrageous. So I decided to launch my own hosting company but provide better prices than the big boys. I did some research and found these providers to be very inefficient. They had manual systems, support changes took a long time, and you had to contact their call centre every time you needed help. Their belly was full and they just didn’t care.

To become a serious player, I needed to be different and not just offer great prices but better user experience and more control. Also, we needed to be fully automated to save on cost, which could be passed onto customers. The automation needed to work in a way that gave customers control. Rather than launching a traditional web hosting company, I launched as a software development company with one customer – ourselves!

We created a technology that was later named Business Process Management (BPM). I am still amazed by what my staff have built and continue to build into this system. It has fully automated the entire business backend system such as billing, internal escalation procedures, staff annual leave reports, detailed sales and technical reporting, etc. Also, rather than use 3rd party control panels such as Plesk, Ensim or cPanel, which we find a real nightmare to manage due to their bugs, we created our own customer control panel that is easy to use and integrates our growing list of awesome products – giving customers control and reliability.

The impact of the BPM is amazing. For example in a particular month last year we registered 8.9% of new domain registrations in Australia, which was half of what MelbourneIT had achieved in that month. Yet we have 1/20 the number of staff as MelbourneIT. We also charge $100 less for domains!

Our core competency is our technology and products, we love building them and managing them and we get a real kick out of launching easy to use products with great prices.

We have been looking to launch an affiliate program for our customers for some time. We found quite a few programs available including commission junction which I think is a good model for most websites. But we wanted a model that rewarded both our customers and their friends. We discovered the web hosting CRM system WHMCS has an Affiliate Program built into it but then we discovered the WHMCS, just like ModernBill, has had its fair share of problems. UK’s largest web hosting provider had a massive security breach with customer’s passwords being accessed: http://www.theregister.co.uk/2007/11/30/fasthost_hack_update/. Imagine running an entire hosting company on WHMCS that costs less than $16 per month. You really do get what you pay for.

Oh and we also found the personal letter sent by the founder and developer of WHMCS regarding a separate issue:
-------------------------------------------------------------------------
Dear WHMCS User,

Matt
Founder / Developer
WHMCS Ltd
www.whmcs.com
-------------------------------------------------------------------------

We have always found big problems with third party hosting management software. This is why we always build our own to be reliable, scalable and secure.

Our affiliate program is no different; our only option was to build it ourselves. Our in house development team has recently released our own affiliate program that fully integrates into your customer control panel. The program is called ‘Mates Rates’ and here is how it works:
1. Simply go to your customer control panel and you will find your Mates Rates Discount Code.
2. Simply send your Mates Rates Discount Code to your mates, post it on your website, newsletters, etc.
3. Your mates can simply come to the SmartyHost website and in the order form add the Mates Rates Discount Code and receive 10% discount on the order.
4. You will also find in your customer control panel a special voucher. As your mates purchase services from SmartyHost using your Discount Code we will credit you 5% of the purchase value every time.
5. There is no limit or cap on how much money you can accumulate in your voucher.

The SmartyHost Mates Rates program was only recently launched and we have already paid out $13,388.95 as of today in discounts and vouchers to our customers.

If you are not an existing customer and want to try the Mates Rats feature, simply place an order on our website using the discount code 123 and you will get 10% off the order. I will only keep this discount code open for short time so if you want the discount you need to hurry.

Following my last post I thought to clarify our position regarding Dell. I think they make great products which are cheap particularly in the desktop market. I think their servers are fine too. We did deploy a large Dell solution a couple of years ago and Dell contacted us from the US and consequently did an international case study: http://www.dell.com/downloads/global/casestudies/2006_smartyhost.pdf

The total solution cost us a few hundred thousand dollars. Importantly, not only did we deploy large servers but also an EMC SAN. A SAN is a Storage Area Network with a high-speed network of storage devices. The SAN contains only Fibre storage (not SATA). The benefit of the SAN is our customers’ information is stored and replicated across hundreds of redundant fibre disks. We don’t store any customer information on servers! You will find most of our competitors keep customer information on the same server they host on. Yes, they all use RAID but there is a single point of failure if the server fails or if there is corruption in the disks. The SAN can also perform round-the-clock data backup and restore tasks at high speeds without involving servers which is another real benefit. It should be noted that what we have done is nothing new. If you ask any Infrastructure Manager or CTO of large companies they will all be using SAN to manage and protect their data.

So why leave Dell? It is not that Dell is neither bad nor good. It is about matching the application to the right vendor. We wanted to keep our model of clustered servers connected to SAN but needed a more enterprise solution. We wanted more redundancy, more fibre, more clustering and we found SUN Microsystems’ (www.sun.com) solution was a better fit for us at this moment in time. One area where it has proved to be very beneficial is our new Vigabyte solution. I am still amazed by our competitors who offer virtual servers crammed onto a single server with no SAN storage. Some of the limitations of not having a SAN are:
1. Single point of failure - with no clustering of physical servers means if the server dies then so does your data.
2. With no SAN there will be disk I/O issues which will affect performance.
3. You cannot scale the storage as you are limited by the amount of storage crammed into the single physical server. SmartyHost has two SAN’s with capacity of one quarter of a petabyte! (1 petabyte = 1,000,000,000,000,000 bytes)

Oh, and if you are wondering what F5 BIGIP’s are in the DELL case study these are load balancers which we still use. We purchased two of these at $45,000 each. They also have a compression module which means we are able to load our customer’s website faster (up to 8 times) and save you on bandwidth at the same time. Qantas has the same model BIGIP as SmartyHost and has an interesting use for it other than clustering. Depending on your Qantas membership level BIGIP will direct you to either the slow or fast network to access information on their website.

Smartyhost has signed an agreement with Google. The deal provides every new web hosting customer and every existing customer that renews their web hosting account and a $50 Google AdWords advertising voucher free. Customers can find the voucher inside their SmartyHost web hosting control panel.

The $50 Google Adwords voucher is also available to all of SmartyHost reseller’s customers as well. SmartyHost expects to give away a few million dollars worth of free advertising credits over the next 12 months.

For more information:
http://www.smartyhost.com.au/googleadwords.php

We about to launch our new TV commercial on Channel 7, 10 and Sky News nationwide. Let us know what you think.

SmartyHost is only a few companies in Australia participating in the new .asia domain extension established for individuals and companies in the Asia-Pacific region, which includes Australia and New Zealand. The Asia-Pacific region has the largest internet population in the world.

The DotAsia Registry was launched late last year and only open to government & trademark holders which resulted in over 30,000 registrations.

The DotAsia Registry will go live on March 26 and available to everyone to register.
However you do have an opportunity to secure your .asia domain name before March 26!

Between February 20th 2008 on 12:00 Noon UTC and ending on March 12th 2008 on 24:00 Midnight UTC you can apply for your .asia domain name. However all .asia domain names receiving more than one application will be auctioned between the applicants in an equitable process handled by the DotAsia Registry.

If your application is uncontested, your .asia domain name will appear in your SmartyHost account with no further action required on your part. If, however, there are other applicants for the same .asia domain name, you will be invited to participate in an auction for the domain.

If you are outbid or do not wish to participate in the auction and thus do not successfully register the .asia domain name, then your registration fee will be fully refunded.

To secure your place we recommend applying for as many .asia domain names as possible. We will refund the .asia domain names not registering.

SmartyHost is charging $80 per 2 years (MelbourneIT is charging $519.50)

To register your .asia domain name please go to:
http://www.smartyhost.com.au/dotasia.php