Jeff Hardy of SmarterTools presents at the 2009 Parallels Summit
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(WEB HOST INDUSTRY REVIEW) — Though each hosting customer requires email, hosting providers can rely too much on the established providers such as Microsoft and Google and end up missing out on a very profitable channel.
Jeff Hardy, vice president of business operations for SmarterTools, says it is easier than some may think for hosting providers to leverage their experience and infrastructure to take advantage of this revenue opportunity.
SmarterTools provides a suite of productivity software including its flagship SmarterMail product, as well as SmarterTrack and SmarterStats. SmarterTools recently partnered with web hosting provider ReliableSite to provide the software to its hosting customers.
In an email interview with the WHIR, Hardy previews what he will be speaking about at HostingCon 2011: opportunities for hosting providers to profit from email, including a discussion of what Hardy calls The Ten.
WHIR: Can you briefly describe the idea behind The Ten?
Jeff Hardy: “The Ten” represents the number of stakeholders associated with a hosting account. Often, a company measures its success by the number of domains and servers. The reality is that each domain is best thought of a population of people – we use 10 per domain as a baseline. Each one of them represents an opportunity for revenue and customer satisfaction. Ultimately, it is the providing for the needs and wants of all 10 that brings stable growth and profitability.
WHIR: How are hosting companies swayed by email providers like Google and Microsoft?
JH: The pitch is easy. On the outsourced side, “free” is a powerfully seductive lure (Gmail, Hotmail, etc.). However the first thing that any economics student learns is that nothing is free except your mother’s love. The hidden costs and missed opportunities are enormous and we will be discussing those in the session.
On the software side, Microsoft has done a good job by building the perception that if you want true business-class performance you need to use Exchange or hosted Exchange. But this is simply not true – and never was.
WHIR: Why do you think web hosting providers forget about email?
JH: Email is arguably the most important part of their business; it is the most personal, it is the aspect of the business used universally by all of The Ten, it can provide additional and broad-based revenue opportunities, and it is likely the greatest opportunity to inspire loyalty in their customer base – bar none. Email is the foundation of virtually all social media outlets and the communication medium of choice for the vast majority of personal and professional users.
WHIR: Do you think that, in terms of value-added services for web hosting providers, email is the easiest to implement?
JH: It is the easiest because the business model is proven and the infrastructure is established (not to mention that it is, by far, the largest market). Email – specifically webmail – is the original cloud-based software-as-a-service. It is interesting how the industry is running to SaaS and cloud opportunities but forgetting and, at times, neglecting the one already running on their systems.
WHIR: Is it a common misperception that email accounts are expensive to set-up and manage in terms of infrastructure for hosting providers?
JH: I do think that this perception does exist in the marketplace. But I also believe that this is a false perception founded on a subset of historically difficult mail applications (low feature sets, stability issues) and successful messaging from the Googles and Microsofts of the world. We sometimes receive skeptical looks when we say that email is safe, stable, profitable, pennies per year to operate per mailbox, and an easy way to reduce customer service requests – but then we prove it.
About Nicole Henderson
Nicole Henderson writes full-time for the Web Host Industry Review where she covers daily news and features online, as well as in print. She has a bachelor of journalism from Ryerson University in Toronto, and has been writing for the WHIR since September 2010. You can find her on Twitter @NicoleHenderson.
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