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Rich
01-21-1999, 12:06 AM
The following is not intended as a critique of FQuest but rather just one person's opinion of some disturbing trends in the hosting industry in general:

Disturbing trend #1: Provide unlimited space, unlimited bandwidth, and unlimited processing to each subscriber for $1 per month.

While I have exagerated the current practice, one only has to notice the hosting advertisements as one traverses the Web to notice that the trend is to offer more for less. While most hosts will state that this is due to "stiff competitive pressure", I have yet to find a hosting company that isn't getting its fair share of requests and signups for new service. It's almost as if every host believes it must have *all* the business right now.

The majority of a hosts new customers are 1st, 2nd, or 3rd time site owners. Many are hopping around from site to site because "my last site [which they joined a month ago] went down for 30 minutes yesterday." Most customers are searching for the Holy
Grail and, unfortunately, most hosts are trying to provide it to them!

Ironically, the end result of trying to offer too much for too little is exactly what people don't want--slowdowns and downtime.

Disturbing Trend #2: When business is growing faster than procurement/setup/installation can keep up with it the current practice is to continue to overload already overloaded systems with new customers.

This trend is also self-defeating because it sends the message that the customers who have been with the host for a long time are not as important as that "next new customer."

Disturbing trend #3: Most hosts believe (and I have found most "admins" share this belief) that the next new technology or level of implementation will resolve the current problems.

This "grass is greener" type of attitude keeps the current trends (and its resulting problems) in place. The three trends become a self-fulfilling prophecy. The real truth is that the same practices/policies are required rather you want to maintain high-reliablity for one server or one hundred.

I have written all this just to go on the record that I believe that most customers that are (or will be) long-term customers (as opposed to the jumper-around-ers and the flash-in-the-pan-ers) are willing to pay a reasonable price for a reasonable amount of resources. Most would be willing to pay a "little more" to a host that practiced freezing new additions when resources reached a high water mark. And they should be willing to pay a "little more" for processing intensive services like SSL and "medium" scripts plus a "little more" for extensive services like databases/shopping carts, chat, or search capability. Unfortunately, in the current marketplace, it doesn't really matter rather you pay $100 per month or $10 per month, the same three disturbing trends are in place at all hosting companies.

Customers must come to understand that you get what you pay for and hosting companies must stop trying to sell the Holly Grail for $1 per month and instead sell their historical uptime/response time charts for whatever the market will bear. The customers will come--and stay.

--I hate when I learn that the minority view means just me--
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Rich

"What time is it in _____?"
www.timezoneconverter.com (http://www.timezoneconverter.com)


[This message has been edited by Rich (edited 01-20-99).]

[This message has been edited by Rich (edited 01-20-99).]

Deb
01-21-1999, 12:29 AM
--I hate when I learn that the minority view means just me--

The minority is not "just you" anymore Rich...

Terra and I talked about it all week long today while watching the current system and the accounting.

The result was quite a few accounts de-activated for non-payment, stop trying to let them continue to run with "the checks in the mail stories" because we simply can't afford to expend ourselves and the paying customers for them anylonger.... it's been 'quite the topic' with another reseller of FQuest and myself.

Then today -- Terra and I watched and spoke for hours about the current load -- How can we continue to promise our current customers what they are supposed to be getting yet continue to earn enough to provide it....

Need new customers to pay for the old -- the end result was coming up with much the same info you have given above... I'm actually glad you posted it. You saved me much time.

We received quite a few new accounts today, and Terra stated quite boldly -- "If we get one more, shut down the order form at midnight, freeze it until the new server is online".... about 30 mins later (5mins ago) we received 5 new accounts.

As of this moment

FutureQuest is on a freeze with exception to our resellers....

The order form is being replaced once I finish this post.

Once the new server is on-line... we'll re-open and just pray that the freeze does not hurt the finances too much.

Side Note] It's hard to find people willing to pay for it when there are 10,000 other hosts to choose from.... We've been bombarded with emails concerning our current price structure saying "it costs too much" I'd hate to see what would happen if we actually charged what it should cost http://www.aota.net/ubb/frown.gif

I 100% agree with your post Rich!! 200%!!

So let it be known -- To the best of my knowledge -- FutureQuest is the first to freeze.

Deb

Deb
01-21-1999, 12:44 AM
ROFL!!!

I just took the order form down... and checked my email... guess what... ANOTHER new account came in LOL... they must have been typing as I was hehe... geee "thinking about freezing" seemed to generate orders lol

At any rate... the order form is gone...

Deb
(to the resellers -- contact me if/as needed for your clients.. )

Terra
01-21-1999, 12:46 AM
Unfortunately, the hosting market is being driven by K-Mart hosting...

It's a dog-eat-dog world with pricing structures, and we thought long and hard what margins (razor thin) would provide us enough revenue to keep our virtual doors open...

We are about medium level on pricing, and you would not believe some of the Sales emails we get - asking us to reply to over 30 (***very***) detailed questions... You think we write novels here - Eeesshhhh...

As far as the equipment, we are not in a position to purchase the $45,000+ high-end server equipment - and I do my absolute best as to what is available to me (hardware cost)...

Our operational status is not good at the moment, and I'm only gaining inches now as I tweak every last part of the servers operation as I can...

FQuest's configuration is solid and well designed... I spent a large amount of my time optimizing for maximum performance bounded by the resources that are available to me...

In conclusion: Hosting has become Blue-Light specials - where everyone wants ***everything*** for next to nothing... How does a small department store compete when WalMart moves in right next door???

There are no easy answers to this current dilema... I'm sure that we are going to take a lot of heat (and possibly pulled) from the 'Hosting Review Sites' e.g. Host Investigator - over cutting off new customers... But in light of current server operations, it's just something we will just have to deal with and absorb the backlashes...

I agree with you as well Rich, not much more I can say than that...

--
Andrew Gillespie
CO-Owner/Systems Administrator
FutureQuest Virtual Hosting

Rich
01-21-1999, 01:57 AM
Bravo on you bold decision. While I know it will be painful in the short term I believe you will gain exponentially in the medium term.

FQuest has a tremendous potential. Although the world may not know it (yet), your customer service is unmatched in this industry and most others. It is currently your shining star.

Also, having worked with some of the best admins associated with the world's largest systems integrator, I am completely honest when I say that Andrew's technical capabilities are among the best in the world. It is rare to find "deep-skilled" knowledge in all aspects of the business including networking, systems architecture, OS, and applications. Unfortunately, technical expertise rarely acquires new customers but it is required to keep existing ones. There are a *bunch* of hosting companies that have no idea what they are doing. Your biggest technical challenge will be to figure out how to transfer these skills to others since you will reach a point where one person can't do everything.

If you keep applying your excellent philosophies and fresh approach to this business, you will continue to have more business than you know what to do with (well, o.k., no one ever has that much business http://www.aota.net/ubb/smile.gif Matching current demand to existing resources while maintaining quality will always be the hardest balancing act for any business.

Two years from now when the inevitable hosting industry shakeout occurs, you'll be glad you made some of the trend-setting decisions you're making today.

Keep up the good work.


------------------
Rich

"What time is it in _____?"
www.timezoneconverter.com (http://www.timezoneconverter.com)

Tom
01-21-1999, 09:58 AM
Fascinating observing your struggles from the sidelines. We all struggle with the same issues no matter what business we're in. My business is in aviation fuel and services and we decided not to compete on the deep discount bargain end.

If you compete on price alone, the customers you will get are the most fickle, and will leave you for the next deal. They're also the most, ahem, vocal. But if you compete on quality and service at a fair price that earns a profit, you get loyal customers. Somebody can always beat you on price, but can they beat you on quality and service?

In between reading your CGI scripts, Hub manuals and load FAQ's, pick up a copy of Carl Sewell's "Customers for Life : How to Turn That One-Time Buyer into a lifetime customer". You won't be able to put it down. It's a very highly regarded book in the management industry and an enjoyable read. It's about 11 bucks at Amazon.