Application Service Provider makes pigs fly
Hostopia handles all technology and its clients share in profits
By Risha Gotlieb
Special to the Star
Although conceived a mere 17 months ago, today Hostopia.com boasts some 150 wholesale clients around the globe, and has become one of the most closely watched companies in the burgeoning Application Service Provider (ASP) industry.
The Toronto-based ASP introduced a revolutionary technology that allows telephone companies, cable companies and Internet Service Providers to automate and run a private-label hosting, email, and applications business without any investment in technical staff or equipment.
To date, the company has acquired customers in North America, the United Kingdom, Israel, Australia, Mexico, Saudi Arabia and Egypt.
Indeed, Hostopia has emerged as one of the fastest growing, most innovative companies in an industry that is expected to skyrocket in the next several years. Industry analysts estimate the market for Web hosting alone to reach $20 billion (U.S.) by the year 2004.
The driving force behind Hostopia.com is its president, Franc Nemanic, who co-founded Internet Direct.?? The other two founders of iDirect, now known as Look Communications, Bill Campbell and Colin Campbell, are also part of the Hostopia team.
When Nemanic was searching for venture capital, Nemanic found many investors thought the concept behind Hostopia was great but technically impossible. During one meeting, a technical analyst retorted that Hostopia.com would be able to deliver on its conceptual technology when ?pigs could fly?.
Nemanic took that as a challenge, and today Hostopia uses the image of a winged pig as their logo. It seems to symbolize the tenacity of the people behind the company.
Vice-president of R&D;, Todd Burroughs, says one of Hostopia? s strengths is its breakthrough proprietary technologies, which have allowed the company to unify Windows NT and UNIX hosting seamlessly into one platform.
In addition, their programming drastically reduces operating costs by simplifying and automating many of the tasks that at one time could only be performed by highly trained technical support staff.
?With the use of templates and an easily navigated format, end users can get their Web sites and email solutions up and running with little or no technical experience,? says Burroughs.
In short, Hostopia.com allows Web hosting companies to side step what has become the major stumbling block in the industry ? staggering start-up costs. Hostopia takes care of all the technical aspects of hosting, from the servers and bandwidth to the infrastructure and administration.
?We?ve built a system that eliminates the need for technical su ort staff which is the Number 1 cost of Web hosting,? Nemanic points out.
Furthermore, their technology is such that as their customer base grows they virtually need only flick a switch to increase the system?s capacity ? without any additional fixed costs to either their customers or themselves. ?This makes the potential for growth extraordinary,? notes Nemanic.
Hostopia?s sales pitch offers a 50/50 profit-sharing pricing formula whereby the costs of servers, bandwidth and programming is borne by Hostopia.com. In turn, the customer ? or partner ? shares its Web hosting profits.
At the same time, Hostopian customers retain full ownership and control of their customer base and brand identity. This means that the Hostopian name is invisible to the end user. The end user sees only the name, logo and colours of the Hostopian customer.
The Hostopian model isn?t exactly revolutionary in the business world. A parallel in the automotive industry is Magna, which supplies parts and components to various auto makers. Buyers of a Ford or Chrysler don?t see the Magna name on their car ? although half the car might have been made by them.
It?s precisely the ability to provide technology and applications in a specialized fashion, while creating substantial cost savings for users that industry analysts say makes the ASP model the most promising of the new Internet business models. The model also suits today?s outsourcing philosophy.
Both large and small Web hosting companies are turning to companies like Hostopia because they can experience savings as high as 80 percent, according to a study conducted by the Gartner Group.
Indeed, Hostopia?s customers can?t say enough good things about them.
Tim Rignold, president of WebHost, Australia?s leading Web hosting company, talks about the ?true partnership? he has with Hostopia. ?We know that they are committed to helping us aggressively grow our business, and the input and customer information we provide helps them grow theirs.?
And Matthew Guiste, director of business development for eNIC Corp., the largest registry and registrar of country code top-level domains in the United States, says Hostopia offered a solution that ?fit readily into our existing technical infrastructure.?
Nemanic says that while the majority of his clients are currently in North America, he expects that in the near future Europe and Asia will contribute upwards of 60 per cent of the company?s revenues. According to his projections, Hostopia will be a billion-dollar company within five years.
|Contact Info:||Anton James
Director of Marketing
(416) 239-6987 ext. 7604