Crazy Little Thing Called Fanatical Support

Rackspace Managed Hosting continues to accelerate and keep a leg up on the competition. The company’s European division announced, on May 14, that it has added 100 new customers in the first quarter of 2002 and increased revenues by 34 per cent since the fourth quarter of 2001.

That’s quite an accomplishment considering that market analyst groups such as IDC have forecasted a dramatic slowdown in the web hosting market for 2002. According to IDC, the hosting market, which had approached $4 billion in 2000 - a 100 per cent growth over 1999 - grew only 25.5 per cent from 2000 to 2001. IDC research still indicates revenue in the web hosting services market will start to gain momentum in 2002 eventually reaching $20.8 billion by 2006.

Also on May 14, Rackspace was selected as one of the top 50 private companies by Red Herring Magazine, publisher of the annual Red Herring 100, which recognizes companies “whose services, business models and products define business innovation and entrepreneurial capitalism.” Several weeks earlier, market research group Frost & Sullivan awarded Rackspace its Engineering Award for Customer Service Innovation in web hosting.

This award and the several others the company has garnered recently, stems directly from what Graham Weston, Rackspaces’s CEO has said all along, “We’ve made a commitment from the very beginning to make an amazing customer experience the cornerstone of this company. There is no reason for customers to wait weeks to get a server online or to spend hours on hold, trying to get technical support to ensure that their platform is running smoothly.”

Rackspace is unrivalled so far, in its ability to deliver extremely fast customer response rates. A live person answers all calls to Rackspace, technical support experts are on standby 24/7 and every customer is assigned a dedicated account manager and Fanatical Support team for the duration of their relationship with Rackspace.

While Rackspace has good reason to revel in its success, the company has to be on guard for stiff competition especially from industry heavy hitter Interland. Interland’s acquisition of Fort Lauderdale-based Dialtone Internet on May 7 - its fourth take over in six months - effectively places a total of 7,000 dedicated servers under the company’s management. Interestingly, Interland also received the 2002 Merger and Acquisition Strategy award within the SME hosting market from Frost & Sullivan in mid-April 2002.

Rackspace, poised for aggressive growth, has already started the ball rolling by increasing its server capacity to 2,500 in Europe in conjunction with its contract with IXEurope, a leading Pan-European provider of data center facilities.