Web Hosting Interview - InterServer December 2006

JOHN QUAGLIERI: Thanks for the opportunity. InterSever's main focus is managed services where we build, administrate and maintain the hosting infrastructure of our clients. We operate out of two facilities in Secaucus, New Jersey with a third under construction. The new facility is 75% complete now and expected to open in late January 2007.

My role at InterServer as Chief Technical Officer is to create and maintain the hosting specifications our customers require, to develop new products and services as well as overseeing our technical support team. I spend much of my time focusing on the quality of our technical support in order to meet our customer's expectations.

JOHN QUAGLIERI: I have been involved since day one. InterServer was founded by myself and CEO Michael Lavrik in April 1999. We originally began as resellers of shared hosting through another web hosting company and built the company from there creating additional solutions for our clients. In June 2003 we moved operations from Clifton, NJ to Secaucus, NJ and took 90% of the colocation space available at the then Allegiance Telecom Secaucus Datacenter. Since the move our client base has increased exponentially. Due to space contraints in 2005 we opened our second 2500 sq ft datacenter. Now one year later we are completing a 6000 sq ft datacenter. All these facilities are located in the same building in Secaucus, NJ.

JOHN QUAGLIERI: I'm sure this will not be the first time you heard this. Our inspiration to start the company was the inability to find a good web hosting provider. At the time I ran a fairly successful website by 1999 standards and was running into the classic issue of using too many server resources. I went through three web hosts, and got shut down at each one before I decided I could do it better myself. I modeled the company through experiences with web hosting companies and with what I felt corrected the problems that I experienced.

JOHN QUAGLIERI: InterServer is focused on the individual clients needs, which is why we now offer such a vast array of services. Since the beginning we have offered shared/reseller hosting and continue to offer this but to a much lesser extent than before. Our core focus is managed services, especially focusing on dedicated servers and collocation. Our other services like remote backups and security solutions build upon our core business and offer our clients
a way to fit all their needs through one company. In the past people may have bought a dedicated server at one company, and backups and security from two separate companies. It's easier for the customer to be able to get all their solutions through one company.

In the past year we have began offering new services through our existing infrastructure. In order to provide the best possible service we began expanding our network to different carrier hotels in the area leasing dark fiber. This was done to get into locations where it's easy to add additional network providers quickly. One of the reasons we left our Clifton NJ location was the difficultly we faced in attempting to add additional providers. Now we have a large network in the NY/NJ Metro area and have begun to sell additional products like IP Transport between buildings and IP Transit.

JOHN QUAGLIERI: From my perspective our products and services tie in together and often share similarities. Hosting companies sell internet services - we have just moved into many services others do not offer - but it's still at its core, the Internet. Our company also has experience in all the products and services we offer. Many of them began as in house projects for ourselves, such as remote backups and VoIP, which we then began offering to our clients. When people come to us they require custom solutions. As CTO I take a look at exactly what is needed and see if our company is capable of offering it. Many of our customers are referred to us through word of mouth for our ability to fit custom needs. Not all the services we offer are advertised directly on our website.

JOHN QUAGLIERI: When I originally started InterServer I never thought it would ever lead to phone services. You are correct that VOIP is different from the traditional services of a web host. Now looking back in hindsight it is a logical next step due to better available (and free) technology. Two years ago we set up our own phone system using Asterix which fit our needs perfectly and we model our VoIP offerings off of what we use ourselves. We are not a VoIP in the traditional sense as a company like Vonage. Our VoIP offerings are managed towards companies wishing to sell VoIP services or require a phone system that can be managed and hosted remotely. Our network has been expanded to carrier hotels where it's easy to pick up phone services.

Traditional web hosts are certainly able to move into some markets that were generally dominated by Telco's. I don't see any web host going head to head with the likes of Verizon or Sprint in the traditional telco market, however, it is a large market and there are people who are looking for better and lower cost services and are in the position where they do not need to go direct with a large telco. Those are the types of customers that smaller VoIP companies can gain.

JOHN QUAGLIERI: Back in late 2004 I sat down with our lead network engineer and came up with a plan to expand InterServer's network globally. The idea behind the plan was to expand into large Internet hub's in order to peer with other networks as well as gain more available IP Transit options. In February 2005 we finally finished the first step of our plan with a fiber connection from Secaucus to 111 8th Ave. in NYC. After picking up 3 additional transit providers and PAIX peering we connected from our POP in 111 8th to 25 Broadway and to 60 Hudson in NYC.

The peering was more successful than I anticipated so I pushed for a much larger peering point right after NYIIX was added. London was chosen to get a different time zone in addition to being one of the largest peering points in the world. The next expansion point will be to Virginia which I expect some time in mid 2007. After Virginia we will expand to Amsterdam and California.

JOHN QUAGLIERI: Web hosting will continue to evolve in the long term. When I look back to 1999 and 2000 our company as a whole has changed greatly and moved into different products and services. In the long term I see more web hosting companies leveraging their network to offer additional services. Our network has been expanded from New Jersey through out major points in NYC and now to London. It was built out to fit the current needs of our clients but now can be used to offer new services like IP Transit, Transport, T1s and even VoIP. Technology will also improve to the benefit of the customer. Shared hosting will
move into more reliable clustered solutions   reducing the chances of downtime and prices will continue to fall. The Internet is an entertainment and shopping center - it also is obviously a communications hub. TV networks are beginning to put some of their shows online and expect to see full fledged IPTV in the coming years.

JOHN QUAGLIERI: I wish I did know this, but there are so many possibilities no one knows. My focus is on the day to day operations and I feel everything else will work itself out. My customers will let me know the next big thing on the Internet soon and I will work on providing that service for them.

JOHN QUAGLIERI: I listen to what our customers are saying. They are the ones who in the end rate our service. If someone is not happy I look with great detail to see where the problem is and what can be done to improve our service. InterServer depends mostly on word of mouth advertising so the customer's degree of happiness is very important to the success of our company. I personally work longs hours to solve problems for our customers and pride myself on satisfying the customer's needs.