executive-blog

December 14, 2007

'Tis the Season to do Tech Support

I just got off the phone with my father. Actually, I got off the phone almost 24 hours ago, and I'm just now becoming calm enough to write clearly about it. My father had a problem: he was attempting to use a computer without supervision. Now, my father is a smart man. He has a master’s degree from Harvard, he has “A Brief History of Time” on his bookshelf, and he consistently left clicks when I ask him to right click. The exact nature of the phone conversation is boring an unimportant, except for one thing. My father needed at one point to save a document in MS Word format. Since he has a Mac, he created the document in Pages. He insisted that his efforts had been wasted since (he claimed) Pages was unable to save in MS Word format. I tried to convince him that it could save not only in MS Word format, but roughly 15 others, but he was unrelenting. Finally I got him to check in the Export menu “to humor me,” and lo and behold, that’s where all his Microsoft formats were hiding. Why do people ask geeks for help, then insist that the help provided is incorrect?

I am expecting to spend at least half of my Christmas visit fixing their multiple computers, synchronizing their files, uninstalling the spyware they were tricked into installing, and generally explaining to them that no, the computer cannot just “know what you want.” And at every turn, I expect to hear dissenting opinions and accusations that I am somehow “hurting” or “confusing” the computer by what I’m doing.

My fellow computer geeks all across the country will also be making that periodic tech support pilgrimage. Just talking to the other programmers in the office I’ve discovered quite an arsenal of tools that they will be bringing with them. From special screwdrivers and thumb drives to entire operating systems and (in one case) a whole new computer, we go into the holiday season armed and ready to set ourselves up for future tech support calls.

Some of my more memorable tech support calls have been from relatives, usually helpless in the basic skills necessary to diagnose the problem over the phone. My aunt made one historic call a few years ago. They had just gotten cable internet in their small country town, and after a week or so she was having problems connecting to the internet. So after hearing about the problem I told her I was going to need her to look at the modem. We spent the next few minutes arguing about whether or not she had a modem, and whether or not the problem could have been caused by never having a modem in the first place. After concluding that she did have a modem, and it was still where the technician left it (under the sink, good one technician! bravo sir!), I asked her “what do the lights on the modem look like?” A valid question I thought, and a relatively simple one. I was expecting to hear a short list of the lights’ labels and whether or not the light was lit. What did I get? “Well, they’re about a quarter inch wide and about a sixteenth of an inch…no…make that about three thirty-seconds of an inch tall, they’re spaced about a half an inch apart…why are you laughing!?”

Another fond holiday memory is the argument I got into with my grandmother. She wanted to “get a house page on the wide world web.” I managed to correct her to “world wide web” without offending her, but then the real fun started. She claimed that “the world wide web is better than the internet!” I tried to explain to her that web pages were only a very small subset of the internet, and that the two terms really didn’t describe the same sort of thing. She decided to put it to a vote. Proudly marching into the living room she announced to the 40-so gathered people “raise your hand if you think the internet is better than the world wide web!” They all stared blankly at her for a short time. Sensing victory, she turned to me and screeched “SEE!?” and stormed out.

So this year I will gather my toolkit, my extra networking cables, my CDs with avg antivirus, firefox, spybot, hijackthis, and zone alarm, my copies of windows XP and Mac OSX, two different linux live CDs, my thumb drives, and my overworked laptop, and make the trek down to my parents house. Please, if you are reading this and you didn’t recognize the items in that list, do yourself and the geek in your life a favor: Find out what operating system you run* and go out and buy yourself the “For Dummies” book that corresponds to that operating system. That can be your gift to your geek this year. Show them that you own the book that holds most of your answers, make a promise to them to at least open the book before you pick up the phone, and you will see what it’s like when someone experiences holiday joy.

Plus, you might learn something.

*Look at the top left corner of your screen, if there’s an apple there, proceed to “Apple”. If not, look at the bottom left. If there’s a start menu, proceed to “Windows.” If there’s neither, pick up the phone and call the person who works on your computer and ask them.

Apple: Click the apple, and go down to “About this mac.” There should be an entry on the first screen called “Operating system.” That’s the operating system you have, you’re done.

Windows: Click the start menu button and look at the left side of the start menu. Your operating system may be listed along the left side. If there isn’t, hold down the windows key on your keyboard and press the “Pause” key (you never use it, it’s in the top right). A window should come up that says “system” at the top. Your operating system will be the first item under “system”

-Daniel

Categories: 
December 13, 2007

Avoid Gift Cards!

I live in America, and as any American knows, we pipe Christmas Music and Christmas TV and Christmas Movies directly into the brains of as many people as possible to attempt to keep everyone safe during this difficult shopping season.

Admit it: when you and your neighbor are running to Electronics in hope of getting the last Wii from the shelf, sometimes the only thing stopping you from dumping a bag of Skittles in front of him or knocking over a Lego display is the constant barrage of Rudolph and Frosty and other Christmas cheer over the PA.

Unfortunately, unless you are content to give everyone a copy of Dryping for Dummies (By Steve Kinman, SoftLayer Press), you will have to wade into the shopping rush to eek out your Santa sized bag 'o goodies.

Never fear, however! The Retail Industry is there to help! For those who don't want to dive head first into the excitement of Christmas Shopping (which can make even a foray to pick up some toilet paper from Wal*Mart into an exciting 2 hour adventure), nearly every retail outlet is willing to give you a 2" x 3" credit card like piece of plastic stamped with their brand. Yes, the Gift Card.

It's been said that over 60% of American adults have either bought or received a Gift Card, this year. It's a very convenient device. For example, if I figure out that Lance really likes Outback Steakhouse, I can buy a $10 gift card from Outback Steakhouse, wrap it in a $1 Hallmark card (although, sometimes the retail outlets already have such cards (stamped with their logo) available), and give it to Lance. "Merry Christmas!" Sometimes you can even get the card gift wrapped.A gift-wrapped credit card!

We're to the point, now, that simply handing somebody a plastic card is actually considered a thoughtful gift. On the way to work, I heard that any fishing lover would prefer to receive a Bass Pro Shop Gift Card over, say, that Bassomatic '76 they've been talking about.

But, lets be honest... it doesn't take much to choose a gift card. I overhear Lance say he likes steak, I see a Outback Steakhouse card, and bam! Before you can say "Impulse Purchase" I now have an instant gift! Sure, it's not as fulfilling as, say, a box of prime steaks... but this way you can give him more gift cards! And more is better, right?

But the comedy doesn't end there. Have you ever seen a gift card in a usable denomination? Usually I find cards with a value between $10-50. Can you even get a steak meal for $10 at Outback Steakhouse? (Don't forget to include the State and Federal Wallet Excise Tax.) And I'm not talking about that free bread, either. No, what happens is you end up either leaving a trifling amount of money on the card (Your balance is ... twenty five cents), or you end up wrapping your card in a sizable amount of cash. See how neat this is? I bought a $10 card, and Lance will pay the balance of the meal... AND STILL THANK ME FOR IT!

Retailers make MILLIONS of dollars off the trifling amounts that just sit, unused, on gift cards. And gift cards aren't usable at another store, so if I want to buy a $20 book, but I only have a $10 Half Priced Books gift card (and a $10 Outback Card Lance gave me as a Thank You), I'll use the card + $10. You can almost never just spend what's on the card.

Here's some friendly holiday advice: If you know what your friend wants, buy it for him. If you don't, ask people close to him. Even Aunt Myrtle's sweater contains more holiday cheer value than the sweater's monetary value in McDonalds Gift Cards.

Is there a way out of this trap of value-locked slivers of plastic? Indeed there is! If you wish to transfer value to another person without locking them into one choice, give them... CASH! Yes, greenbacks, bucks, dead presidential portraits, green... whatever you call it, United States Federal Notes are accepted by all retailers, in any denomination. Value not used by one retailer can then be spent at another. This value can also be stored up where it may earn interest and combine with more legal tender until a large item can be bought. The best solution for any gift giving problem where "Gift Cards" are suggested as a solution is CASH, such as when you absolutely can't think up something to buy. And it makes a great stocking stuffer. In Bulk. Hint, hint.

Yes, you in the back? What does this mean for SoftLayer? Just because this is a SoftLayer Blog doesn't mean it has to have a SoftLayer moral! But lucky you... I've got one right here: (this weekend only, special holiday financing available!)

Like Gift Cards, each SoftLayer server comes with a bloc of value attached: bandwidth. This valuable commodity makes the servers work. You can have all the processing power in the world, a RAID 75 array with 100 petabytes of space, 40 terabytes of onboard memory, and if you don't have any bandwidth... it's all moot.

Unlike gift cards, however, SoftLayer attaches some real value you can actually use. For many users, even touching the top of the 2 Terabyte bandwidth pipe is a real exercise.

However, sometimes, like gift cards, a customer buys a server with value attached... but simply cannot use it all. Or they put the server 100% on the private network and never use the bandwidth at all (Like that $20 gift card from Sludge Emporium your Granddad gave you last year). Is there any way to salvage this value?

Indeed! The SoftLayer Secret Labs rolled out a new feature a while back: Virtual Dedicated Racks. These VDR's (as we cool SoftLayer Secret Lab Technicians like to call them, because TLAs are cool) allow you to virtually rack a group of servers behind a virtual bandwidth meter. All the attached bandwidth value of those servers are lumped together, like a good 'ol pile o' cash, and the aggregate amount attached to the rack. An example:

Each server comes with 2T bandwidth (generally).

Without VDRs, if server bassomatic.76.example.com only uses 1T of bandwidth, and server auntmyrtle.sweaters.example.com uses up 3T, you end up with a full 1T overage on Aunt Myrtle's site, even though you have a full 1T worth of value on the other server not being used!

With VDRs, the two servers pile their value together, making a 4T rack. Bassomatic.76.example.com uses 3T this month, while Aunt Myrtle's site only uses 1T. Combined, their "rack" uses 4T of 4T, so 4-4 = 0!

Like cash, but unlike gift cards, with VDRs you are able to pool your value to allow the usage of more value at one time. Now how awesome is that?

If you would like to experience the excitement of pooling your bandwidth, talk to your SPS (as we cool SoftLayer Secret Lab Technicians like to call our SoftLayer Professional SLalespersons, because an acronym is still a cool TLA as long as only three letters are capitalized), and get yourself a Virtual Dedicated Rack (make sure to call it a "VDR" when you order it to sound cool).

And let 'em know this post by Shawn got you interested. If I get enough referrals, I'll get the December SoftLayer Referral Outback Steakhouse Gift Card!

-Zoey

Categories: 
December 11, 2007

Record SLales Day

117 Servers in one day. That's right -- We sold and fully provisioned 117 servers yesterday. Words can't express how proud this makes me as we've come a long way from when I started at Softlayer just over a year and a half ago. When I got here I was the 25th employee and we were in a very small, weird office and I was always within (literally) arms reach of Lance and Steven and a good (great) day was selling and provisioning double digit servers. Now things have gotten much bigger and we are still humming along coming out with new products, new datacenters (Seattle and more to come) and innovating new and never before seen ideas and services in the hosting world.

We now have over 100 employees, nearing 15,000 servers in production, a new (bigger) office and record revenue being generated daily. Two years ago when we opened our doors for business we had zero (0) in all of the above categories. We have grown up fast while continuing to be the best out there with our innovation and services.

I'm just so proud. *tear*

-Michael

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December 7, 2007

Time for Change

As I watched the Dallas Cowboys dismantle the Green Bay Packers last Thursday night, I noticed an ever so slight – almost invisible – passing of the torch from Brett Favre to Tony Romo. It became quite clear – Football is a young man's game.

As I sat and pondered what that must feel like for Brett and his crew, I noticed frightening similarities between hosting and football. Hosting appears to be a young man's sport as well.

Now, before you guys (there I go again) pile on and beat me down – hear me out. I am not saying that Brett and his older brethren are washed up and incapable of playing football – but I am saying, their primetime has passed and any future success should be considered borrowed time on a great career coming to conclusion. Facts are facts – professional football is a very physical and mental job and the youth + skill appears to outweigh age + experience.

This leads me back to hosting. A world full of very young and extremely talented players. An industry where degrees and certifications come in a distant second behind skill and innovative thinking. I often find my thirty-something (barely) resume on-the-line with both new and old competitors. I can assure you, the young competitors terrify me, and the older ones typically bore me.

The recent interviews for potential new hires here at SL are eye-opening. Young Guns coming out of high school with Cisco Certs, college students working on cutting edge technologies and of course – the prodigy that shows up from time to time who was born to design and innovate beyond all our wildest dreams.

I often tell Mike, our CFO, that technology is changing the rules of business and how things will be done going forward. In Mike's accounting world, graduates come out of college with lots of book knowledge and very little experience and gain experience over their career. In the technology world, I would argue the younger talent holds more technical knowledge (book or real world) than the older more established crowd What I bring to the table is business and technical experience; but I find myself learning more and more technology from my younger team members everyday. It's a never ending battle to stay on the leading edge – but I wonder – how long will it be before I hand the torch?

Go Cowboys!!

-@lavosby

December 7, 2007

Why I Love Working in SoftLayer SLales

SoftLayer is a very unique company. It is a rare find and it is a pleasure to be associated with this company. I certainly hope our customers feel the same way (and if you don’t, please talk to us so we can make our service with you more valuable). I am a Senior Sales Representative at SL and I would like to give you more of a behind the scenes feel for why we are the best sales staff in the industry.

I am a people pleaser, and I truly love to help people find satisfaction. I have had several sales positions since I graduated from college many years ago. The thing those previous sales positions had in common was that the salesman was incented to take his own needs into consideration first and foremost. This directly conflicts with what I want to accomplish in business. It is understood that everyone goes into business not to play Barbie dolls, but to earn a profit. Still, this seems fundamentally wrong to me. I have direct experience (even in this industry) where sales positions are incented to put their own needs and wants before those of the customer, or even the company they are working for. This misappropriation of incentive or motivation can cause any number of scenarios that are bad for business on both sides. Luckily this is not how things are done at Softlayer. The customer’s needs come first, as it should be.

The main reason why I came to SoftLayer was because of the way that its sales staff is designed. We are put together as a team, for the customer's benefit. Customers do not need to worry about working with a single individual sales person unless they simply prefer to. I know that I prefer to build up business relationships because this makes for a good understanding of what the main goals are for each customer, and I can have a better grasp of what I can personally do to help. We are not individually commissioned so customers can rest assured knowing that we are doing everything possible to put them in the best situation imaginable. This allows us to avidly search for those “win – win” situations that are positive for everyone involved.

The SoftLayer Sales staff is also very diverse in the styles and talents that we offer. Everyone here has had several years of industry experience and is quite knowledgeable about not only product lines, but also the businesses of our customers. I would go so far as to say that we have the most knowledgeable staff in the industry.

The bottom line is that an intelligent sales staff working for the right reasons ends up with satisfied customers. Satisfied customers are inclined to do more business with a company, and a positive culture between the company and customer is created as opposed to a negative one where it seems that there is always a disparity between the two.

Because of the culture we have created here, it makes me happy to come to work each day.

-Doug

December 4, 2007

Team SoftLayer

When we first opened our doors, Jeaves and Josh used to split 24-hour shifts in the DC to provide 24x7 support coverage, and there was a “napping couch” in the office for the occasional overnight work shift up in Plano. Most of us had a toothbrush if not a change of clothes in our desk drawer, and a fun Friday night entailed sitting around a whiteboard talking numbers, and coming up with new ideas for the datacenter.

Team SoftLayer is much much larger now, but the spirit is much the same. This picture is from a swingin’ SL party we had a few Thursdays ago, where the office got together to label power cables for the new Seattle DC. There are members of Dev, Sales, Accounting, Marketing, & Management here working together. It makes me so proud.

November 21, 2007

Smells Like SoftLayer

Seattle baby! That's what's next. With that being said I thought I would blog about Tom Hanks. I know you wish you had thought of this one too. I chose him because I figure he has done enough movies and other things that I can actually have enough content and he did do "Sleepless in Seattle" and "You've Got Mail" and they are both closely related to our expansion. Why, you ask? Right now we have a few guys in Seattle installing cage nuts -- 17,280 to be exact. That is 1 cage nut installed every 5 seconds for 24 hours straight (Sleepless!). I hate that I am missing out on that fun. Writing blogs is nice too I suppose.
So here we go Tom Hanks and SoftLayer!

SoftLayer works because we are all "Bosom Buddies". We all get along. Hopefully all of us will continue to be famous afterwards and not just half of us. That would make for a lot of "Happy Days" in the future. We also have quite a few "Family Ties" as we have a brother/sister pair (Fleitman), and 3 brother pairs (Kinman/Laude/Guerra/Harris) and we can't forget the Father/Son set (Rushe) family keeps things fun and busy! If we continue to grow at this rate we will all be making a "Splash" soon when we leave our competitors in the dust. When that happens we will have a party to rival the likes of the "Bachelor Party" and we can invite "The Man with One Red Shoe" and will need some "Volunteers" to serve the Hors D'oeuvres.

I bet most of you didn't know that Tom Hanks was in "Real Genius" but I will use it anyway because we really do have some real geniuses here (Everyone take a bow). This keeps us from turning into a "Money Pit" and on the top of our game. I could say that before SoftLayer all of us would have been just a bunch of guys with "Nothing in Common" but it seems that "Every Time We Say Goodbye" we seem to end up back together. Even having to go through the "Dragnet" is worth it, because we all want to be "Big" and have the last laugh in the "Punchline".

We all drive in from "The Burbs" almost daily just to make sure we make our customers happy and we let the kids watch "Turner and Hooch" on the in-car DVD on the way to daycare. Once we get here we keep the "Joe Versus the Volcano" attitude and will take on any problem and get it solved.

To keep it light, once a year we go play in Muenster and Sam cooks up the BBQ on "The Bonfire of the Vanities" and we pig out and have a blast. There are some great "Tales from the Crypt" after those parties. Sam and his cooking crew won 3rd place last year and that puts them truly in "A League of Their Own".

Meanwhile the guys are still "Sleepless in Seattle" and Lance is spending his nights thinking of the next location. I really doubt it will be "Philadelphia" at least I hope not, too many Eagles up there. Go Cowboys!

Note: I am pretty sure I am the "Forrest Gump" of SoftLayer. I think Gump had ADHD like me and that is why he wanted to be and do so many things in his life. I take pride in that! You can always tell by my blogs.

Back to being the best -- in "Apollo 13" the most famous line in the movie (true story too) was "Houston, we have a problem" I bet there are some competitors to SoftLayer out there that are saying that same thing right about now with our continued growth and that isn't some kid's "Toy Story" that is the honest truth. We do it with customer service and the best product. Why? We just like hearing our customers say over and over, keep doing "That thing you do" and we will keep buying your service. That hurts the competition sometimes. We aren't sorry about that. We will go "From the Earth to the Moon" to continue to make our customers happy and we will make sure "You've got Mail" when something important is coming and it will not be just another "Toy Story 2". Even if it is like "Saving Private Ryan" we do anything we can to make it happen. All while walking "The Green Mile" because taking care of our environment is very important to us. (You didn't think I was going to talk about the death penalty did you?)

Some people like to look at us as a "Castaway", but we truly are a "Band of Brothers" on the road to fruition instead of the "Road to Perdition" like so many others. I welcome all readers to try and "Catch me if you can" in this blog and let me know of the movies I have missed so far. I will admit I have skipped a few TV appearances so you have to let me slide on those.

One of these days I might have to blog on "Freedom: A History of Us" and let you know where we all came from and what got us here. It is a long list of "Great Performances" that would impress you. Some of us were the smart geeky type and some of us were "The Ladykillers" and could have fun at an airport in "The Terminal".

I am getting close to the end now so the Narrator would now say, "Elvis has left the Building" on the "Polar Express" or was it in a pack of "Cars", oh well either way. I hope reading this blog has been an enjoyable experience and not like trying to "Crack the Da Vinci Code".

-Skinman

November 21, 2007

There's Too Much Blood in my Caffeine System

I've never been one to do things in half measures. Growing up, my tree-house had 3 stories, a deck and indoor plumbing- if you can call a garden hose run up a tree "plumbing".

Softlayer has been a good fit for me because we're not used to doing things in half measures here either. Within the last two months we've announced the addition of Passmark certification, Rescuelayer, Urchin, StorageLayer, EVault Backups, Load Balancing, KnowledgeLayer and even a new datacenter.

All of these things require countless hours to implement. There's development to be done, as well as testing, building, re-testing, documenting, and then some more testing. These things can stack up on you pretty fast if you're not giving them your full attention.

In this 100mph lifestyle, I have found that there is one friend that I can count on to never let me down. My friend will always be there when I need him to get me through the hard times.

That friend is caffeine.

In previous blogs we've seen how dependant our Sales team is on their caffeine fix, and it's no different for the Support team. However, we're much more versatile with our means of intake, and it's important to keep a well stocked fridge to keep everyone happy. Nothing can ruin your morning faster than coming to work to find that the supply of caffeine has been depleted overnight. The vast emptiness of the refrigerator echoes your cries of despair, and your mind scrabbles for a contingency plan. Wasn't there a 7-11 close by? Does Starbucks deliver?

There are as many methods of caffeine delivery as there are species of beetle, but here are some of our favorite ways to curb the insanity:

Monster – The undisputed king of the castle. Monsters disappear faster than we can chill them, and it doesn't matter what flavor we've got.

Upshot – These little guys will pick you up and shake you, and in a serious way. They've got a lot of kick for being as small as they are, which means that you can down 3 or 4 of them without knowing what you've just done to yourself. Plus, they're easy to hide from your caffeine deprived co-workers when they're on the hunt.

Coffee – Believe it or not, we're not big coffee drinkers in the Support department. Still, there's nothing quite like a hot cup of joe to get you going.

Soda – We keep a well stocked supply of various kinds of sodas for when we're all out of serious caffeine. They're usually the last to go, but they get the job done.

Caffeine has helped me through so many late nights and pressing deadlines that I can't even look at it as a vice anymore. It's evolved from a crutch to an extra set of legs.

Now if you'll excuse me, I think I hear the coffee pot percolating.

-Jeaves

Categories: 
November 19, 2007

A Feature Too Far

I just finished the best Software Project Management book I have ever read. It covered proper planning, requirements gathering, resource management, inter-organizational communication, and even discussed the immeasurable factor of individual effort. The book's title is 'A Bridge too Far' by Cornelius Ryan. The book is actually a historical account of "Operation Market-Garden" which was an attack by the Allied forces against Nazi Germany in World War II.

First let me say that I am not comparing Software Development to War. I do appreciate the difference between losing one's job and losing one's life. But as I was reading the book, the parallels between the job of a project manager preparing for, managing, and executing a large project are not unlike that of the job of a General's planning staff preparing for a major offensive.

Operation Market-Garden was a combined ground and paratrooper attack into The Netherlands by the Allies a few months after the invasion of Normandy. Things seemed to be going well for the Allies in the months after D-Day and the Allied Generals became confident that they could launch a lightening strike that would end the war sooner rather than later. The operation seemed simple, Airborne paratroopers would be dropped deep in Nazi territory and would capture key bridges along a route into The Netherlands. A ground offensive would quickly follow using the bridges that were captured by the paratroopers to get almost all the way to Germany's borders. The short version of the story is that the ground offensive never caught up to the paratroopers and the offensive didn't succeed.

Reading the historical account, with the benefit of hindsight, it became obvious that the Allied Generals underestimated the difficulty of the task. The offensive scope was too big for the resources on hand and perfect execution of all the individual engagements was required. The schedule the Generals developed was impossible to keep and schedule slips meant death for many of the soldiers. Communications between elements of the units involved was critical but did not occur. However, because of heroic actions of some individuals and personal sacrifice of many, the offensive almost succeeded.

In the early stages of a project, setting realistic goals, and not putting on blinders as to the quantity and quality of your resources are key to a projects success. Going on the assumptions that the 'development weather' will always be perfect, communications will always work, and that all tasks will be completed on schedule is a recipe for disaster. And you can't always plan on individual heroics to save a project.

I usually try to inject some levity into my posts, but not this one. 17,000 Allied soldiers, 13,000 German soldiers, and 10,000 civilians were killed, missing, or wounded as a result of this failed offensive.

-@nday91

November 16, 2007

The Value of a Customer

For the two people who actually read my posts, you know that I blogged about how I look at the value of a server. Basically, it should be valued by the cash flow it produces. Without a customer to use the server, the cash flow it generates is negative, i.e., less than $0 due to the costs of keeping it racked up, powered up, and connected.

So, how do you place a value on a customer? Customers and servers are not a one-to-one connection because many customers have more than one server. They also buy more than just servers, such as additional software and/or backup services.

Like most of us in the industry, I spend a few minutes each day scrolling through the customer forums, both ours and 3rd party sites – you probably know which ones :). I look at the customer comments and sometimes I wonder if the folks in our industry understand the value of these customers judging from the way some customers are treated.

Granted, some customers are abusive and need to be fired, so to speak. Others appear to be high value customers with multiple servers and solid business models where someone has dropped the ball and caused them to seek greener hosting pastures. If companies understood the dollar figure valuation of each customer, they might think twice about their next course of action with a particular customer.

To value a customer, I look at the statistical expectation of how long that customer will stay with the company, how much the customer currently buys with us, the statistical expectation of how much additional business they will place with us, the gross profit generated by the customer, and that old stand-by -- the minimum acceptable rate of return for an investor in the company. From these data points, I do a simple Present Value calculation and arrive at the value of the customer, which is the amount of cash that would have to be invested to yield the economic equivalent of the expected gross profit that the customer will produce. I'd give you a sample calculation, but a) it would make this post even more boring, and 2) some things we like to keep secret :).

This is important because it can make the growth of a hosting company less "slippery" -- sort of like when Eric takes off from a red light in this:

For example, if you sell 100 new servers but customers release 90 back to you during the same period, your growth doesn't have the traction it would have if only 10 servers were released back to you. By retaining valuable customers, you don't spin your wheels as much. Spinning the tires at a hosting company is not nearly as much fun as watching Eric drive.

-Gary

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