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      Interview: Lew Moorman, Chief Marketing Officer - Rackspace Managed Hosting  

      The people at Rackspace Managed Hosting are "fanatical" about customer support. In fact, they don't even have voice mail there. It's been turned off - another guarantee that you'll speak to a real person, 24 hours a day, 7 days a week, 365 days a year. That's just one of the things Chief Marketing Officer Lew Moorman is happy to promote about Rackspace. Find out more in his interview with HostIndex.com....  

    HostIndex.com:   What led to the founding of Rackspace in January 1999?

    Lew Moorman:   The company was founded by three highly technical college students. To raise extra money, they started doing integration and web design work. They did not have a difficult time putting together sites and applications for people, but they had a hard time deploying them. It was expensive and time consuming to bring bandwidth into an office, or to get the required servers into a colocation facility. They decided to deal with the bandwidth providers themselves, and put all their customers together. They quickly learned that this piece of the business was adding the most value to their customers. It was actually the most profitable, so they focused on that.

    Then our CEO, Graham Weston and his partner, Morris Miller met these people. Graham was looking for someone to help him wire an office building he owned. He started talking to them about the business. Morris had previously been in the software publishing business. He was the first person to put Texas case law on CD-ROM. He was trying to build a hosted application for that, and had gone through this exact same process. The two of them believed the future of deploying web sites was through a fully managed solution. 


    HostIndex.com:  From a marketing point of view, does describing the genesis of the company make your job easier when signing potential customers?  

    Lew Moorman: In the early stages, the anecdotes were very good. We believe we pioneered what has ultimately emerged as the dominant model [managed hosting services]. Today, we compete on other things, most notably customer support - both in terms of responsiveness, and knowledge of customer support personnel. It really is the biggest differentiation. I don't think there's an analyst out there who doesn't think the future is in managed hosting.

    Many small mom-and-pops don't have the network connectivity or security we have. Many of those companies are having a hard time competing today. People used to compete on things like 99.999% guaranteed uptime. I think if you don't have those things today, you're not going to be a legitimate player.

    HostIndex.com:    So your focus on customer support is what makes Rackspace stand out?  

    Lew Moorman:    It really does. There are many elements to customer support. For us it means incredible responsiveness and incredible knowledge. It starts with provisioning the server. We were the first to guarantee 24-hour setups, and we're one of the few who continue do that. We have countless stories of doubling people's capacities in 6 to 8 hours. Great support means you can get online very quickly and you can scale very quickly. All of that requires systems and people to get that done very, very efficiently.

    There are many ways to innovate in support. We've created systems to automate a number of things, and give customers choices on how they administer their servers. It's not just answering the phones; but answering the phones is the first step, and many companies aren't doing it today.  

    HostIndex.com:    You describe your customer support as "fanatical" What does a customer get with fanatical support?  

    Lew Moorman:    All our customers' calls are answered by a real person, 24/7. They can immediately get a tech who has their full customer record. The tech understands what software the customer is running and what issues they might be having. We've also invested a lot of time and energy in our portal. We've created a number of tools to manage the server. We continue to look at the latest in technology for security, storage and administration software.

    We think we have the happiest customer base out there. We get 1/3 to 40% of our customers from referrals. That's good word-of-mouth, which we think is a validation of our customer support.  

    HostIndex.com:    You operate your primary data center out of San Antonio, TX and a second data center in London, England. Are there differences in the way you market services to those using the London data center compared with the one in Texas?  

    Lew Moorman:    Yes there are. I think the market is just a little bit further behind in Europe. Some of the arguments we were making (in North America) nine months ago, we now make there. We sometimes have to explain exactly how our model is different, and how it contrasts with colocation.

    There's also greater skepticism about outsourcing in Europe. It comes back to support levels. In our experience, Europeans are less willing to trust things to outsiders. It makes them feel much better if you can prove you have great responsiveness and great tools.

    We've always given our customers root access to their machines. That means they can lock us out if they want to. That has been a very comforting fact to lot of customers. So has our offer of month-to-month contracts. If you're not happy, we want to give you the opportunity to leave.  

    HostIndex.com:    Many hosting companies say they can scale up as a customer grows. You acknowledge that some customers may also need to scale down. How does that increase customers' confidence in the services you offer?  

    Lew Moorman:    That's a huge impact. We know that customers have seasonal businesses. They have promotions. They have spike in demand. One of the big advantages to our model is that you don't own hardware. In a colocation cage, you buy it, so you might as well deploy that hardware. Here, you get exactly what you need.

    We give our customers an option to go to a lower fee and leave their servers dormant, so they can immediately kick them back up when they need to. We have created a number of programs to appeal to that need, because it absolutely exists.  

    HostIndex.com:    What ad and marketing campaigns do you have in the works?   

    Lew Moorman:    We're proud of this current campaign. Everyone plans to have 24-7 support, but it's just a bullet point. We really want to make it the focus. We think people need to know that they're going to get smart, knowledgeable technicians on the phone, and they're going to get them fast. Everyone wants uptime. It's not just about great connectivity. It's about the technical expertise to help you get through any problems you have. I'd say look for the kinds of ads that keep pushing our customers' love for us, and the kinds of promises we're going to make to customers.

    We're also continuing to expand our product offering. We've always been a strong Linux and NT shop, but we're also expanding our Sun offering. As we add more managed services, we will certainly highlight those in our advertising.  

    HostIndex.com:  Thanks for taking the time to share your commitment to customer support with us.  



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