The second opening keynote at today’s Parallels Summit was delivered by Morris Miller, one of the original founders of Rackspace.
His topic, much like the previous presentation was “the cloud.”
Unlike Serguei Beloussov’s presentation, however, Miller’s focused distinctly on the business processes a company might want to employ in approaching the cloud, since the cloud is about, as he says, “focused value.”
The first of those processes is strategy. He describes the marketing strategy of “positioning,” in which you have to “own” something in your customer’s mind – the first example he gives is “what is the best selling book of all time?” The answer, as most people are aware, is the Bible. He then asked “what is number two?” Of course, nobody knows.
You have to own one thing, and only one thing, in your company’s mind. Volvo, for example, owns “safety.” FedEx owns “overnight.” Dell is “direct.” And so on.
The most important aspect of a brand, he says, is single-mindedness. A “brand” is owning a single concept in the customer’s mind.
Following up the general description, he took the audience through the beginning stages of Rackspace, and the process of building that brand to the point that the company owned the notion of “managed hosting” and, later, “fanatical support.”
Quite a marketing clinic, in the very literal sense – especially for someone who, like myself, doesn’t necessarily come from a marketing background. And while it had an obvious application for hosting providers (the example being used in the presentation was, after all, Rackspace), the presentation would have been worth seeing for anybody working to build a brand in any business.
One of the interesting things that came up, by the way, was Miller’s description of the development of the relationship between Rackspace and Microsoft. The software company’s desire to work with Rackspace, then a Linux-focused hosting provider, led to, among other things, the development of the Service Provider Licensing Agreement. Rackspace was the first company to license Windows that way.
And an interesting story, as competition for RackSpace arrived, the company had to deal with RackShack (the original name of EV1 Servers, which became part of The Planet), a much cheaper, but very different, company (discount dedicated servers) with in Miller’s estimation a “confusingly similar” name (just two letters different, actually). Rackspace, though it offered a different product, was losing business to RackShack. It launched ServerBeach then to compete in that market at a greater discount, and “ruined” the discount dedicated server market. Then it sold ServerBeach to Peer 1 in 2004.
Another major point –the law of division: over time, a category will divide and become more categories. The implication of that is that, over time, “the cloud” will evolve to include a variety of divisions. Your version of the cloud doesn’t have to be the exact same as, say, Amazon’s.
Overall, an extremely entertaining presentation – full of what you might call hosting “lore.” An amazing perspective on the web hosting business, for sure.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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