Web Hosting Interview - The Planet July 2007

Web Hosting Interview - The Planet July 2007

Doug Erwin, Chairman and CEO of The Planet

This month we interview Doug Erwin, Chairman and CEO for dedicated hosting provider, The Planet. The Planet enjoys the status of being the world's largest privately held dedicated hosting company, and a key stepping-stone to this position was probably the biggest news in the company's recent history - a merger with EV1 Servers. We ask Doug about life post merger, whether the company is on target to meet its objectives, and we ask where we can expect The Planet to be in the future.

  • HOSTSEARCH: Doug, thanks a million for the opportunity to interview you. I realize you have a very busy schedule so taking time out like this is much appreciated. It would be great if you could kick off with an outline of The Planet and your role in the organization.
    DOUG ERWIN: Sure, my role is to be "The President" of The Planet.  How's that for a title?  It's a great one-liner that gets some terrific comments from people.  But seriously, our company provides small- and medium-sized businesses with an IT infrastructure that really is the great equalizer, allowing companies to compete with the Big Boys who can afford to build huge data centers and staffs.  It's expensive to build a small IT operation when you think about the investment in conditioned or dedicated space, servers, bandwidth, the network and applications, along with 24x7x365 support.  That's what we do.  It's a significant value for customers who don't want to take a risky and costly do-it-yourself approach.  It's approximately 75 percent cheaper to use us vs. building it in-house, and they get a far better product from The Planet.
  • HOSTSEARCH: It seems you are seldom out of the news recently - and I guess that all started with what was one of the biggest news stories around at the time, the EV1 Servers - The Planet merger. As someone who has never been part of anything like that, what was it like being a part of a union of such large entities and what has life been like post merger.
    DOUG ERWIN: We've just marked the one-year anniversary of the merger, and it's been quite a year.  We're pleased with our success, and that's not to say we haven't experienced our fair share of bumps.  Integrating two companies the size of these two is no small feat, particularly since it makes us the world's largest privately held dedicated hosting company. And pre-merger, remember they viewed each other as the enemy.  Blending management teams, financial systems, operating models and data center operations are among the challenges.  We've made great headway because of our passionate teams.  
  • HOSTSEARCH: Are there any plans for another merger or acquisition to create an even bigger company, or is being the biggest good enough just now? Post-merger, who are your biggest competitors? Can you name a few?
    DOUG ERWIN: We regularly evaluate opportunities for expansion through acquisitions, but they have to be for the right reasons and the right price. Organic growth is Goal #1.  Working with our current customers -- and the incredible opportunities in the small and medium business arena to provide additional services they need -- fuels plenty of growth.  I'd prefer not to mention competitors by name -- they know who they are.  Some are smaller and some are larger.  Our goal is to distinguish The Planet as the best service provider so that customers select our company based on a reputation for tremendous quality and world-class support.
  • HOSTSEARCH: How many customers do you cater for and how many servers do you have? What growth rate is the company experiencing and what are your targets?
    DOUG ERWIN: We are proud of the 22,000+ global customers we serve.  Our six world-class data centers house more than 48,000 dedicated servers.  We're growing faster than the market rate, and I expect that to continue.
  • HOSTSEARCH: What are the new company's objectives and where will it be in the next 2-3 years?
    DOUG ERWIN: We have five strategic objectives:  three are revenue-based, one is customer-focused and the last two are internally focused.  As I mentioned in the last answer, we expect to continue to grow faster than the market. We will continue to dominate the dedicated self-managed server hosting market.  We will provide a world-class customer experience through our services and offerings.  The Planet's logo will stand for a customer-driven company that provides great services at a great price.  Our success comes when our customers are successful. We also plan to provide more advanced hardware services to the SMB market, leading us into the managed services business. Retention and recruitment of passionate and customer-driven employees comes next.  You can't become the best without a team of folks who take ownership and have pride in everything they do. We will invest millions toward internal systems, tools and training to help us become the most efficient and effective company in our space.  
  • HOSTSEARCH: Around the time of the merger, there was news of the newly combined company moving in a new direction for 2007. You suggested, "We've got some grand and glorious plans" and also said, "I believe that we can become a quarter-of-a-billion-dollar business in four years without any acquisitions." Are you on target as far as these plans are concerned?
    DOUG ERWIN: Our plans are on track, and I am confident we'll hit the financial mark.  What we've done to get there is what's even more critical.  As I mentioned earlier, we're building a world-class customer service organization that matches the quality and reliability of our network and data centers.  We're expanding our data centers to meet our growth requirements and are investing heavily in systems that provide great insight and analytics to support the business.  We're definitely on target to meet our goals.
  • HOSTSEARCH: Over the last few months you have also been very active in terms of upgrading equipment and facilities - expanded data centers, the launch of PowerEdge Servers, the introduction of "economy-level" Dell PowerEdge 840 servers, and promotions on Dell PowerEdge 1435 Dual Opteron Servers, RAM promotions - the list is endless. It looks as though you are sticking firmly to a successful "dedicated" formula, but I have to ask, do you have any plans to enter into the shared hosting market? If not, are there any other areas of web hosting you might be heading towards?
    DOUG ERWIN: We have a tremendous group of resellers who focus their business exclusively on the shared market, so our goal is help them grow their businesses - we don't want to compete with them.  We have plans to expand our reseller programs to help them accommodate their growth goals.  They rely on our data centers and network to support their operations, so they can focus on what's important to their own customers.  We expect some will also move into the dedicated arena as they grow, so we're here and can help them make that leap.  

    You've seen us announce new storage options, firewalls and backup.  We believe there's an opportunity to help customers evaluate services they don't currently buy from us.  You will see more products from us this year all aimed at helping our customers and prospects have the best IT hardware infrastructure when they need it.  We scale for them as their business grows, and we can offer attractive pricing that makes working with The Planet an easy decision.
  • HOSTSEARCH: Very recently, you launched what you called a "Peer Pressure" program - basically getting your customers involved in a referral campaign and offering prizes. You have also recently run an unmetered bandwidth promotion, and a couple of other things. For some of the people visiting HostSearch who might be considering entering hosting, how important is running campaigns and promotions such as these to the success of a company like The Planet?
    DOUG ERWIN: The hosting market is highly competitive, so our marketing team looks at creative promotions that will draw customers to look at our products and services.  We watch the market and listen to find the products that would drive them to evaluate The Planet when they're looking for a provider.
  • HOSTSEARCH: Yet another recent development for The Planet - you entered "the blogosphere" with "theplanetdotcom.wordpress.com". There is a lot said about blogs these days, and although it is early days for you, how have people taken to your blog? Is it proving a useful tool and how is it benefiting you the most.
    DOUG ERWIN: The blogosphere is new territory for me, and I went into it with a lot of resistance.  I'm more accustomed to talking with customers one-on-one or through direct conversation, even in large groups.  I'm not as prolific with the written word.  On the other hand, I am surrounded by people who love this new idea are much better at it than I.  They're doing a great job, and we're finding more who want to participate.    

    This has been a great learning experience for me.  Many people have written personal notes supporting and coaching me.  They've said it gives them insight into The Planet so they better understand our company, and I'm all for that one. We also hear from people who may not have had an outlet to communicate directly, so I'm glad we're out there now.  It's really interesting to me to see what they write about.
  • HOSTSEARCH: Crystal ball time. What is the future of web hosting? Where's it going and what will it be when it gets there?
    DOUG ERWIN: Hosting took a slide during the tech boom, and a lot of people were left high and dry when companies didn't deliver on what they promised.  Memories are long standing when you've been hosed.  With the growth of e-commerce, streaming media and Web-based applications, small companies can't afford the sheer infrastructure to manage their businesses, let alone the required 24x7x365 support.  That's where hosting will continue to grow, with companies like The Planet adding meaningful services to support IT operations.  There's plenty of room for growth, and we plan to be in the thick of it.
  • HOSTSEARCH: On a similar theme, here is our de facto question - one we ask just about everyone, and its interesting to get a number of points of view - What is the next big thing to hit the Internet - not just hosting - and how will it impact people's lives?
    DOUG ERWIN: Social networking gets a lot of visibility.  Between blogs and sites like MySpace, FaceBook and Second Life, there's a lot of user-driven content that continues to emerge.  New storage options like we see from Cleversafe are interesting and could easily help companies like ours with the vast storage required to run our business.  I don't think we've even hit the tip of the iceberg on grid computing, but we're getting there.  It will have a significant impact on our business.
  • HOSTSEARCH: Just on a personal note, when you aren't helping take care of the world's biggest dedicated hosting organization, what do you do in your spare time?
    DOUG ERWIN: My wife and I are lucky to have four great sons, three daughters-in-law and a very cute granddaughter.  We enjoy spending time with them and their families.  I also serve on several community boards, including Target Hunger, Make-A-Wish Foundation, YES Preparatory High Schools and the Houston Technology Center.   And if there are any ticks left on the clock I love to snow ski, fly, work out with free weights and play in the garden.  I'm one tired guy when I lay down at night.

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