B10WH

Russia is a huge web hosting market and one of the countries with developed software market and IT industry. I have always been very curious about Russian web hosting market and its developments. So when I met Alexander Ovchinnikov Of Masterhost.ru I knew I was gonna interview him. And despite that I missed to see him at the Parallels Summit 2009 in Vegas where both us attended (it was my fault), I’ve finally made it. So here he is.

Hi Alexander, Can you please introduce Masterhost.ru to Daw’s readers (The interview was made for Dawhb.com blog, but I decided to published it in B10WH). How long have you been in business? What kind of hosting customers do you target?

Our Company was founded in 1999 and now it belongs to holdings.masterhost the biggest hosting provider in Russia and CIS.
We offer the wide spectrum of hosting services. Our product range includes virtual hosting based on the Unix and Windows platforms and Virtual Dedicated Server (VPS), location and lease of servers, lease of Microsoft applications (Software as a Service – SaaS), registration of domain names in different zones. Besides, we offer services of access Internet for providers of wireless and broadband access to World Wide Web to end users.

For years .Masterhost services were provided to more than 150 thousand people. Among the Corporate Clients are both private users from all regions of Russia and CIS countries and legal entities, comprising of big public and commercial companies, communication operators, Internet providers and others.

One of our foreground tasks in developing services within our hosting is integration of web-statistics from the SpyLOG Company (belonging to our Holding) with the .Masterhost hosting platform. Today all .Masterhost clients have access to free statistics services. They include reports with detailed visiting statistics by different parameters.

In 2008 the .Masterhost Company became a laureate of the RUnet Prize in nomination “Technology and Innovation”. This RUnet Prize was created in 2004 and is a national award in the sphere of high technologies stimulating companies operating in high technologies and Internet and rewarding for distinguished services in information technology and electronic communications.

Your starter shared hosting plan costs around $4/month. Is it one of the cheapest ones on the Russian Market and it offer “unlimited transfer”. How do you deal with this? Do your customer use their data transfer quotes and d you impose any restrictions on monthly traffic?

Competition among hosting providers motivates them to launch new tariffs with high functionality and minimum possible price on the market. Nevertheless, the today user choosing among hosting providers makes a reasonable decision and relies both on low price of services and stability and professionalism of the provider. These qualities help our company to be among the leading ones on the hosting market for many years.

Virtual hosting is used here not only by persons and small-size private companies but also by large enterprises if their business is not inseparably associated with Internet, i.e. the site does not generate a lot of traffic. In the hosting tariff plans traffic is offered to clients free of charge provided the following conditions are met:

• Incoming/ outgoing traffic ratio is over 1:4;
• Summary foreign incoming traffic does not exceed summary Russian incoming traffic and summary foreign outgoing traffic does not exceed summary Russian outgoing traffic.
• There are a few restrictions for virtual hosting, i.e. specific list of used software (applications, libraries and the like) and its settings which are determined by the provider administrators.

Do you offer Plesk only and if “Yes” can you please tell me what are the advantages of Plesk from your point of view?

To manage (administer) virtual or physical server we suggest our clients using a specialized program – the Plesk server control panel from Parallels. Thanks to simplicity of use the Plesk control panel server control functions can be performed by unskilled administrators. Using the control panel the administrator controls subsystems, applications, domains, users, and he or she can locate any site, create mail boxes for his or her colleagues and administer server parameters by analogy with virtual hosting services.

You are one of the very few web hosts that I know, who offer free web hosting for students? This is something people always appreciate, but does it pays… I mean  Why do you do this to support them and to increase brand’s awareness?

Education is the most important sphere of human activities providing forming and building-up of intellectual potential the need in which is growing by hyperbola. Internet must be a part of the program developing innovative education, a network for updating educational process.

Today we offer two free tariff plans within the educational program named “Student” in cooperation with Microsoft based on the Windows platform and “Education” based on the Unix platform. The “Student” tariff plan of .Masterhost offers free hosting services to students of institutions of higher professional education for educational and research purposes.

The “Education” tariff plan services are offered to both educational institutions and natural persons creating and supporting non-commercial projects associated with development and education subjects. Free platforms use conditions do not differ from the paid tariffs: professional equipment, 25 hour support, back-up copying and full range of services which the company offers to its clients under its motto “professional hosting”.

Do Russian site owners prefer .RU domains for primary web address for their sites? Can you rank the most popular TLD’s in Russia, or at least the ones your customers use?

In fact the users of Russian Internet prefer to register their sites on domains in the RU zones. Today the total number of registered domains in this zone amounts to 2 millions of domains.  The .Masterhost clients registered 85 000 domains in the Russian zone for the period the Company has been operating (since 1999).

The second most popular domain zone for our corporate clients is the international zone .com. Today .Masterhost  registered 10 000 domains in this zone.

Is .EU gaining popularity in Russia?

There are geographic restrictions in registering domains in the EU zone. The company must have its office or the main place of business in the territory of the European Union and the natural person must reside in EU. Russia does not belong to the European Union yet, that’s why domestic companies and citizens of our country can not register their sites in the EU zone for the time being.

I saw on your website you had at least 8 different seminars in 2008. Did they helped participants to better understand the topics you discussed and do you think that conferences help web companies to attract new customers?

Under present-day conditions of strong competition any telecommunication company must not only provide its clients with services but also show how to use these services most efficiently. At seminars held by our company our clients not only obtain theoretical knowledge but also get practical recommendations on service management, answers to questions on technical problems occurred in their business and unique methodical materials extracted from reports. Participation at seminars gives opportunity to exchange experience and make more balanced and sound decisions in choosing services of our company.

You have nice priced VPS hosting plans. I saw you use Virtuozzo Containers as virtualization technology? Why did you choose Parallel’s virtualization technology?

To realize VPS services we focused on reliable and regularly updated software which is easy to use and optimal in distributing resources of physical server among users of virtual dedicated servers. All virtualization systems have their advantages and disadvantages. Among virtual dedicated server support environments which we considered the Virtuozzo technology is the universally recognized leader.

This technology allows setting dynamic division of resources, creation of functionalities like parameters of physical server and combines flexibility in setting and control. Besides, use of this technology allows to minimize costs of the company spent on hosting services (compared to lease of physical server).

A few percents of resources of physical server are spent on virtualization using this technology, the others are to users. The used percents of resources are taken into account in filling physical server with VPS. These few percents include reserve for losses in virtualization and server control system.

Do you think that OS virtualization offers more advantages to consumers than WMware’s Virtual machines, which are based on full virtualization techniques?

These are different technologies and each has its drawbacks and advantages.

What kind of web hosting Russian site owners want much – Shared, VPS or Dedicated. Which one of these do grow faster?

According to statistics of our company more than 50% of clients choose virtual hosting being the cheapest and most popular. To administer its site the client does not need any specific knowledge, all support is given by the hosting provider.
Among our corporate clients the next most popular is lease and location of server (collocation and dedicated hosting).

The users of collocation administer their servers by themselves. The reasons are availability of a technical specialist in a company and sometimes a corporate procedure according to which access to internal resources is given only to insiders.
The most active users of dedicated and collocation services, as we think, are our operators, advertisement agencies, internet shops and suppliers of goods (dealers and distributors), game servers and the like. Ti sum up, they are representatives of the corporate market (mainly medium and big size business).

The “Virtual Dedicated Server” service is rather promising from the point of view of its functionality. The companies which “outgrew” usual virtual hosting but are still not ready to switch to “dedicated” server involving more financial expenses  for lease of equipment, support and administration, choose VPS. VPS in its essence is the intermediate option between virtual hosting and dedicated physical server.

We can point out that about 25% of users of “Virtual Dedicated Server” service of.masterhost “overgrew” virtual hosting.
VPS service is given to our clients on the Unix and Windows platforms. This technology is based on virtualization from the Parallels Company.

What is your projection for Russian hosting market and for web hosting market in general?

The main development trends of hosting market today are that conventional methods of hosting when advantages of a hosting provider are in tariff parameters (disc or mail space, number of mail boxes, address to data bases and the like) “fade” into the background.

At present potential clients choose tariffs to solve specific tasks including business ones in choosing among hosting providers.
Thus, hosting is often being considered in combination with suggested software or preset services by this or that tariff. First, we speak about ready decisions integrated into the hosting platform: professional scripts , modules, and systems.  They range from guest books, chats, forums to contents control systems for creation of online projects, for example, internet shops.
Thus, users of our company can install favorite CMS directly from the control panel by one key. And this option is active both for tariffs of virtual Unix hosting and for a new specially developed CMS Profi tariff.

The list of CMS for automated installation includes CMS systems being most popular among Russian users and is constantly being enlarged. Installation of CMS by certain tariff depends on technical characteristics of the tariff plan and software.

One of the world’s leading server producers Dell released new line of servers, storage and system management products this week. The It giant said that its new products ease configuration and management of data center infrastructures.

Dell expects that IT companies that have tight budget budgets due to the economic slowdown will benefit from its new servers and will be able to carry out more tasks through virtualized environments. The company already said that it expects lowered hardware acquisition costs for those businesses who will use the new servers. The hardware producer also aims to equip servers and storage products with features that will help its clients to reduce power and cooling costs.

The Dell’s main objective however is to help businesses to reduce system administration costs. According to the hardware producer up to 70% of IT budgets go for maintenance. The company says that its new servers make easier to configure, standardize and virtualize IT environments.

Competitors Also Announced Cost-Efficient Hardware

Dell’s competitors have taken a similar approach to server management. Cisco has already announced the launch of Unified Computing System, which includes virtualization technology, services and blade servers. This was the company’s entrance in the server market. Like Dell, Cisco said it aims to help enterprises to develop and manage server installations in data centers. Besides the new player Cisco, Dell also competes to HP and IBM in the server market

Its new PowerEdge 11g servers will be powered by Intel’s Nehalem design. They will use Intel’s next-generation Xeon processors, designed to increase servers speed and performance per watt, compared to prior Intel processors. Dell did not released more details about the new servers. the company is expected to reveal more about the new servers shortly after Intel officially launches its Nehalem-based Xeon processor.

According to the hosting industry analysts the new processors will deliver between 20% and 30% increased performance on certain applications compared to past Xeon processors.

Dell is also said it plans the release of other power-efficient storage solutions. The company has said it adds features to the EqualLogic PS6000 Series arrays, including the new SSD (solid-state disk) option, which is promoted as a device that processes data more quickly while consuming less power. The new disk-based systems are expected to have starting price at $17,000.

Dell also launches a Management Console, which brings all device and task management controls under one application. This makes much more easier the management of hardware and software resources in a virtualized environments. The company has also stopped to ship CDs and DVDs with its servers, embedding system management capabilities and diagnostic capabilities directly into the new hardware.

Pictures of the new PowerEdge 11G Server Family can be found in Flikr.

The model that web companies implement to organize their customer service and support is a key to their business success. this is not discovery. See what Douglas Hanna said in an interview for B10WH.com about the process of organizing business relationships with customers.  Doug is a popular specialist in customer service affairs and owner of the blog Service Untitled.

Hi Doug, Good to talk to you again. Let’s start with this… There is a very interesting advice in your latest article “The Angriest Customers”, published in Service Untitled. You said “Lower your voice. This will force the customer to lower his or her voice to hear you.” Do you think that this might work with a really angry customer?

It all depends on the customer. Some customers will continue to yell and be unreasonable, no matter what a customer service representative does or how skilled he or she is at getting customers to calm down and lower their voices. Most customers, however, will respond to a representative lowering his or her voice and will quiet down themselves.

In another article of yours “Make it easy for everyone” you urge your readers to ask themselves the question “What processes at your company could you make easier?”. Do you think that standardization is one of the keys for businesses to provide a quality customer service?

I really do. Customer service is a very process-driven aspect of business. Without understanding the processes and then working consciously to improve the processes, a customer service department won’t be able to execute well. Standardization is a result of being process-driven and is essential to customer service success. Without a dedicated focus to the processes involved with providing service, companies are going to have a hard time delivering consistently great customer service experience.

Would tell me which are the best Customer Relationship Management (CRM) systems and customer support applications you have seen? Do you recommend any Open source application that small businesses can use?

I have seen everything from custom solutions that were developed by one or two programmers to major solutions used in Fortune 500 companies. There isn’t really a “best” CRM system because different companies have different needs. What works really well for one company could easily be worthless to another company.

The wide array of needs makes it tough to pick just one CRM system that would work for everyone and in every situation. The best thing companies can do to successfully choose a CRM system is to test it out, examine their current and future needs, and see talk to others in the industry about what they’re using and what their experiences have been like.

Corporations spend millions in staff training and have access to different knowledge about customer support and customer care. Why do we continue to see messages like “We will respond within 1 business day”? A messages like this can be seen even within the websites of some of the major U.S. service providers…?

The idea of responding within one business day frightens customers and businesses alike. Customers expect faster responses and businesses don’t always understand why customers need a response faster than that. I don’t feel as if there is anything fundamentally wrong with replying to a message within one business day.

If companies can exceed expectations and reply faster, great. If they constantly and consistently fail to reply within the promised time frame, that presents a problem that companies have to address. A large part of customer service is about under-promising and over-delivering and the idea of beating estimated response times is a quintessential example of that.

If you need to make a decision about building a customer support department in a middle-sized or large company that provides web services (web hosting, domains, software service, or any other web based services) would you outsource your customer support in other country in order to decrease the business costs?

That is a tough question and something that many people have written books on. I don’t think companies should outsource if it jeopardizes service quality. If companies can outsource “back of the house” operations and save money that way, great. It works because customers likely won’t notice a difference. However, customers are a lot more likely to notice a difference if the “front of the house” operations are outsourced and service quality starts to diminish.

You say in another article of yours that “It is important to try and motivate encourage people outside of the customer service department to provide great service”. OK, is there a magic formula which could be implemented in any service area?

I don’t think there are any magic formulas in customer service. If there were any, you’d see me writing a book about it. In all seriousness, though, I think customer service success requires discipline, dedication, personality, and creativity. Companies need to approach their customer service and business challenges in a creative way, execute with personality, act consistently, and then be committed to continuing to do the other three things at all times. So, in terms of a formula: discipline + dedication + personality + creativity = customer service success.

Do you think that the economic slowdown would force companies to be more innovative in searching ways to improve customer satisfaction? Do you think that in times of economic crisis companies that can afford to lower their service prices should do this and to make their customers life easier?

That is a great question. A majority of customers value quality customer service, but when money is tight, they might be more likely to tolerate poorer customer service in favor of lower prices. I still think that customer service can continue to be a great and a powerful differentiator, regardless of the current economic situation.

The companies that continue to plan to differentiate themselves on customer service (as opposed to price) need to make sure their service is delivering an experience and making a difference that justifies the price disparity. If anything, a bad economy encourages people to watch their money more closely and think more carefully about to whom they give their money. If great customer service providers are providing a service that customers value, they will be a lot more likely to remain loyal.

Do you think that companies have to show to their customers profiles of customer support operators who are serving them?

Not really. For some companies, it can make the service experience seem personal, but I don’t think it is ever necessary. Even companies with very formal and focused account management processes don’t always share any profiles on their account managers.

The companies that do show profiles of their individual customer service Representatives tend to be relatively small. When these companies use profiles, it can emphasize a more personalized service experience when compared to an experience the customer might encounter with a larger company.

Final question. How many times a year, any service provider should ask its customers to participate to surveys?

It depends on the business and the relationship the business has with its customers. For a standard, consumer/SMB web host, a particular customer shouldn’t be surveyed about his or her overall perceptions of a company more than two or three times per year, at most. A lot of companies will survey customers after each interaction, which is fine, but no single customer should get an overall customer satisfaction survey more than two or three times a year.

B10WH.com brings you to WebhostingDay 2009 conference and expo, that took place in Cologne between March 17 and march 20, 2009. Web Hosting Day is the Europe’s premier web hosting industry gathering. This year it was a very busy and perfectly organized. But let’s see the pictures.

A Slot Machine By Parallels

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Intel’s Enterprise Marketing Director Shannon Poulin speaking during the keynote “Energy Efficient Servers For Evolving Hosting Architectures”.

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“Virtualization Revolution”

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Intel’s Vision

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InternetX, one of the biggest Domain registrars in Europe came u with a very nice commercial.

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Outsourced customer support services with Server Bees

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AntispamEurope

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Parallels Booth

We are going to WebhostingDay, next week so I decided to send an email to Kirsten Nothbaum of PlusServer, one of the organizers of the show.  According to the German hosts of the conference, this year participants can expect to see about 50 well-known companies as exhibitors. “People will be able to listen to interesting talks and learn many new things which currently affect the industry”, said Kirsten. Here is the whole interview.

Hi Kirsten, good to meet you. How much time does it take to organize an event like WebHostingday? Is it a huge effort?

Hi Dimitar. Yes, it definitely is. Actually, we already started shortly after the last WebhostingDay to make plans for the next one, and about mid 2008 we began with gaining partners and preparing all necessary information for them. At the same time we started to draw the attention of potential visitors to the event. Considering that we organize everything alongside our core business (Intergenia AG) is a supplier of professional web hosting and server solutions), we can be proud of what we accomplished so far.

Please explain for those that never heard of WHD… What is WebhostingDay – more are trade show or an event where anyone can come to share knowledge and to learn something about the hosting industry trends?

Web Hosting Day is both: a gathering for the international web hosting industry including a hosting trade fair with about 50 well-known companies as exhibitors. People can listen to interesting talks and learn many new things which currently affect the industry. And during the exciting social events, the attendees can form and maintain relationships with colleagues from the hosting sector.

… you’ve been organizing WHD for the fifth consecutive year. Which one the the last four was the best?

This is hard to say. Every year had its own special challenges and it was always a success to gain more partners and visitors from year to year. This was partially possible because of the good impression the event made on the former partners and visitors, who told other people about it, who then registered in the next year.

Why a comercial provider like Integenia AG decided to organize a industry show. Isn’t it waste of time for you guys. You would make more money if you are focused in producing and selling web hosting services only.

Well, you may call us enthusiasts if you like. We do not organize the show for the sake of making money. It is our intention to bring together the brightest minds of the industry for the benefit of all web hosting professionals, so that they can exchange about experiences, news, challenges and solutions. You see, it is crucial for our sector to interact and network with other companies, and WebhostingDay gives an ideal opportunity for it.

Do you have a funny story from any of the last events to tell?

Sorry, I cannot think of one at the moment.

OK. WHD will pay attention to cloud computing, as any other con that takes place in 2009. Do you expect a cloud hosting software producers to present their platforms during the show?

Yes, we have many experts and early adopters of cloud computing coming together at the CloudCamp, which takes place on March 19 parallel to WebhostingDay. Moreover, there will be some interesting talks dealing with the topic of cloud computing. For example, Serguei Belloussov, CEO of Parallels, will help to clear the foggy realm of cloud computing for service providers and businesses.

Let me ask you another question… Is it now time for web host and data storage providers to invest in new cloud generation (cluster and grid hosting) platforms? And don’t you think that the economic slowdown would make businesses cautious about new technology investments?

That question will certainly be discussed during WebhostingDay within the scope of the main.FORUM or CloudCamp. Companies, who are currently wondering about investing or not, should come and get some answers from the experts.

I’ve been on Parallels Summit in Vegas and the company’s CEO Serguei Bellousov gave a very interesting speech about the perspectives in IT market and web hosting in particular. What do you expect him to talk about at WHT?

He will talk about “The Next Generation of Optimized Computing”, focussing on cloud computing and how businesses can take advantage of it.

Which day of WHD do you expect to be the most interesting one? What does anyone must not miss?

Both days are fully packed with talks and sessions about different topics, so it is difficult to say which one to prefer. If somebody only wants to come for one day (which for the stated reason we cannot recommend), it depends on the attendee’s main focus of interest which day would suit him best. People should not miss the opportunity, however, to join the great ConneXion party on March 19 in the evening, where everybody comes together to celebrate and have fun.

I’ve seen there are some promising social events! A very important question about them. Do you offer, or at least is there around a something like “You drink, we drive” service ;) I’m asking you this on behalf those who missed to book a hotel, next to the event… like me :) … and will need a drive from Cologne to come to the conference…

We offered a shuttle service to Cologne last year, but for whatever reason it was not made use of so much by the attendees. Therefore, we do not offer something similar this time, and people will have to take taxis (or if they prefer, public transport in the mornings) if they want to go to Cologne and back.

And finally one serious question. There are many people who are coming to the event from overseas. What do they have to see in Cologne, besides the Cathedral. Are there any sightseens, which people should go to see?

They have to visit one of the famous brewpubs, of course, where the traditional Cologne beer called Koelsch is served. Additionally, typical Cologne specialities can be eaten there. And, for instance, they may want to visit the parent house of 4711, the famous Eau de Cologne. It is a beautiful old building and souvenirs for the family can be bought there.