November 28, 2003

Landing the “Big Fish”

By Dennis McCafferty - From Web Hosting Monthly, November 2003 edition Sure, you run a respectable Web hosting shop, filled with local and small-to-medium sized business customers. But what about bigger clients? Often times, you need a client with some sizzle - a “big fish”, so to speak - to morph from a low-key hosting operation into an industry player.

Take Raleigh, N.C.-based Hosted Solutions (hostedsolutions.com) and its successful courtship of the NHL's Carolina Hurricanes (caneshockey.com) as an example. Owned by Peter Karmanos Jr., CEO of software giant Compuware Corp., the Hurricanes have always been one of the more technologically advanced pro sports teams. Fans can access the team's Web site, for example, using wireless Internet connections in the arena. But the team was hosting its Web site in-house, and complications ensued. A closer look at how Hosted Solutions positioned itself as the Hurricanes' first outsourced host is a textbook example of maximizing opportunities once they're presented.

Because much of the Web hosting for the Hurricanes was located in Compuware's Montreal facilities, the Hurricanes faced many language issues when it came to day-to-day site management, as many employees in Montreal only spoke French. This, coupled with the fact that Compuware itself was based in Detroit, created logistical problems. By 2002, the team was struggling with site updates and support.

At this point, Hosted Solutions, which was established in 2001, had already secured 115 small and medium-sized clients. And it helped that Hosted Solutions had a luxury box at Hurricane games; while this provided no guarantee of a future business relationship, it certainly didn't hurt. This gave Hosted Solutions CEO Rich Lee and his staff an entry point to present its case. Upon getting word about the team site's hosting problems, Lee picked up the phone and called the team's sales and marketing department to ask if Hosted Solutions could make a presentation. The Hurricanes agreed, and the equivalent of that 'first job interview' was set. “[The Hurricanes] wanted to partner with a local company in the community, and clearly had a need for a stronger Web hosting presence,” Lee says (the Hurricanes are also based in Raleigh). “They were a mainframe-based company. Web hosting was not a core competency for them.”

Hosted Solutions came up with a proposal that specified their bread-and-butter offerings, detailing its service support and understanding of the intricacies, security and management abilities needed to provide Web hosting 24/7. This resulted in the second phase - having team executives tour Hosted Solutions's 12,000-square-foot headquarters in a nearby office park, where the team was impressed with a hands-on look at the NASA-like, efficient operations data center. Lee presented his staff face-to-face, and stressed to team executives that they were certified in several valued IT skill sets. Lee demonstrated the advantages the company could present by running the team site as a Web portal interface, with bandwidth reporting, increased security monitoring and other mission-critical needs.

The team execs walked away impressed with the level of detail and preparation. Shortly after, the Hurricanes signed Hosted Solutions to come aboard.

Hosted Solutions is making the most of its sporting interests, even though there's a catch. “Let me be clear about this,” Lee says. “With the luxury box, we're spending more on the Hurricanes than they're spending on us. But this has had payoffs that seem unlimited for now. This has helped us land all kinds of clients since we launched this relationship.”

The numbers demonstrate the results. Client growth at Hosted Solutions has practically doubled in the last year, and is still growing at seven to 10 percent a month. Hosted Solutions has launched joint marketing ventures with the team, and has even started using team players in its own ads. Meanwhile, the Hurricanes appear more than pleased with the company's performance thus far.

“Hosted Solutions allows us to deliver massive amounts of content in the form of text, audio, video and photography to our fans without a hitch,” says Howard Sadel, director of new media and graphic communications for the Hurricanes, adding that the company “is able to monitor our continually growing traffic and bandwidth needs and adjust as needed.”

Hosted Solutions isn't alone, however. Other stories provide revealing aspects of the importance in savvy positioning to land that crucial first 'name' client.

Melcom Copeland was looking to get his Paris, France-based BuyHipHop.com established as a Web hosting service for urban market businesses. Early this year he landed FatCap Designs, a major United Kingdom-based hip hop T-shirt designer, just by being inquisitive. “Fortunately, this market is very active in the use of discussion forums and bulletin boards, where I can register as a member and solicit prospects for hosting services pretty easily,” Copeland says. “The designer became my client in the fall of 2003 after posting a new thread asking for forum members to visit his Web site, and critique it. I threw on the professional services consultant hat and surfed my way over to his site.” Copeland offered some pro bono criticism that the designer found enlightening. He then installed and customized an open source shopping cart called OsCommerce, and applied some of this potential new client's T-shirt design into the e-catalog. “This extra effort on my part took a few hours, but resulted in landing a valuable hip hop hosting client,” he says.

Meanwhile, Santa Clara, Calif.-based OpSource (opsource.net) landed a huge client when it was a mere industry infant, as it was hired in August 2002 to provide outsourced, 24/7 tech operations management for Microsoft's major Bay area data center. According to the company, there are three critical questions that companies should be prepared for from large companies with significant requirements:

 .Who else are you doing this for?
 .How do we know you'll be in business next year?
 .How do we know you're good at what you do?

OpSource was able to secure a “big fish” client like Microsoft while in its relative infancy because it had a seasoned staff that had worked with Microsoft before and that was able to present its case to Microsoft well. “In order to make the company comfortable with our business, we opened our books to them and presented our business model in detail,” says Richard Dym, chief marketing officer of OpSource. “We demonstrated to Microsoft that we not only had the financial resources necessary to build our business, but that we were running our business in a financially prudent fashion.”

Deal done: After just three months of operation, OpSource secured Microsoft as a marquee client.