Showing Signs of Aging

By Sean Branagan, NaviSite

April 2, 2003 -- (WEB HOST INDUSTRY REVIEW) -- In the business world, consolidation is considered a sign of maturity, and in the hosting and managed services industry, it has been downright ugly. Bankruptcies, restructurings, facility closings, personnel changes and other major business events have often left customers unsure, questioning, and sometimes in the lurch.

But growing pains happen in every industry, and our industry's providers and customers have a role to play in the maturation process to encourage positive growth and create a bright future.

As providers figure out what services they can adequately (and profitably) provide, customers should also take the opportunity to look seriously at their online business needs. Even when faced with a provider undergoing a major transition, customers should put aside their knee-jerk reactions and seek out a best-fit service partner that meets their needs in a more mature marketplace.

As part of this process, customers should consider the following areas when reviewing their current or prospective provider(s):

Focus

Does your current or prospective provider truly focus on your kind of business and the services you need? You should be a good match for your provider's best customer type (business size, industry, etc.), and your provider should be able to tell you about other customers that sound a lot like you. Also determine if your provider focuses on the key services that you need; it is important to ensure these services are not just a side offering or add-on.

Business Size and Coverage

Is your provider a large, mid-sized, or small company; local, regional, or national? These factors can positively and negatively affect your service. If they are a big, national player, they may be a good fit because they have depth and breadth of services you need. On the other hand, the size and importance of your account might not be significant enough to command attention with a large, national provider. Conversely, a smaller, regional provider may provide more personal attention to your account, but not provide the full-range of services you require now and in the future.

Direction and Vision

It may sound like a thing of the past, but vision still counts in business, especially in a tough market. A company with a clear vision and sense of direction can provide you with a better sense of direction about a critical part of your business. Managed service providers live this part of your business everyday and ought to have a clear view of the future. Plus, the best way to test their belief in that vision is to see how they are tangibly building toward and investing in it: are they expanding or contracting operations, services, and markets?

Range of Services

Your provider should offer you services you need today, as well as things you will likely need in the future. Determine if your provider's spectrum of services is too broad or too narrow to support you fully. A big part of the maturation process in this industry will be about defining the meaning of "full-service."

Support

The best providers are excited to talk about how they monitor and support your systems. Test them: call their support line in the middle of the night and be the "dumb customer" with a problem and see how they handle it. If your current provider is going through major changes and mergers, find out how they are planning to handle customer support through the transition. Get specifics. If reviewing prospective providers, ask for a copy of their standard service level agreement and see how they regularly back their commitments. Also ask for references - then call them. Also call some of their other customers and ask about their experiences.

Management and Leadership

A seasoned business team knows how to succeed, especially in hard times. Become familiar with the senior management team and their track record. Have they been successful? Also see if you can easily get access to top management. This is a good indication of the importance of your account.

Years in Business

No doubt, your provider has been through tough times lately. Find out how they handled it and survived it. Find out what they learned and how they have changed, adjusted, and grown. This old line also holds true in business: what doesn't kill us can make us stronger - but only if we learn from our experience.

Even if you have recently reviewed your provider (or migrated to a new provider), appraising service compatibility and fit is the ongoing responsibility of a customer. Since the industry continues to mature and change almost daily, customers who know what they want and need and who can best provider it are in the best position to handle the jolting shifts still to come.

The hosting and managed services industry is still growing up and consolidating. Sometimes the process can be ugly, but in the end, we all have a role to play in building a bright future of an online business world that is as dependable as running water. And with the current business climate, it has never been more important to find a provider who offers services that are reliable, secure and cost-controlled, designed for your kind of business.

About the Author

Sean Branagan is Senior Director of Marketing for NaviSite, Inc. (Nasdaq: NAVI), the leader in Managed Applications and Managed Infrastructure for the Mid-Market. After owning and operating his own interactive marketing and Web development firm for a decade, Sean sold his business to managed services company AppliedTheory in 1999. ClearBlue Technologies acquired AppliedTheory out of bankruptcy in June 2002, which was then acquired this past December by NaviSite, which has restructured and added new services through acquisitions. Find out more at navisite.com.