Lew Moorman, Chief Marketing Officer - Rackspace Managed
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
led to the founding of Rackspace in January 1999?
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.
a marketing point of view, does describing the genesis of
the company make your job easier when signing potential customers?
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.
your focus on customer support is what makes Rackspace stand
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
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.
describe your customer support as "fanatical" What does a
customer get with fanatical support?
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
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
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?
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.
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?
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.
ad and marketing campaigns do you have in the works?
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
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.
for taking the time to share your commitment to customer support