Editor’s note: Each Thursday, Local Tech Wire features an emerging company in RTP. Not even a year old, Springboard Managed Hosting is growing, entrenching itself in the local market and attracting customers from large to small – a course the company says it would like to maintain.
The Web hosting company, now the largest in the Carolinas, began just last summer, when Rich Lee and Chris Hanks, former colleagues at Duro Communications in Orlando, Fla., saw an opportunity to buy Utenzi, which they renamed Springboard. Lee and Hanks paid less than a half million dollars for the bankrupt Internet company and moved in to the existing facilities in Cary.
“We were looking for opportunities and this one came about,” says Lee, chief executive officer of Springboard, in an on-site interview with Local Tech Wire. “The best thing was that it would have taken $5 million to start up something like this. There were a lot of advantages…the price was a big piece of this puzzle for us.”
Hanks, president of Springboard, chimes in: “It was a good customer base and a great facility.”
Adds Lee: “It was a short path to profitability…within six months.”
Indeed it was. Springboard, which closed 2001 with around $2 million in revenue, was turning a profit by January, as a result of its strong customer base. It retained 120 customers from Utenzi and has since added 20 more, from small local entities to one of the largest Internet media companies in the world, FortuneCity.com. Springboard has a three-year, $2.52 million contract with the New York-based company.
Other customers include the N.C. Wildlife Resources Commission, Sports Endeavors, Trailcard and iEntertainment, with another big one set to be announced in May.
Lee, who claims, “We can take a company from cradle to grave,” says some customers, such as iEntertainment, approached Springboard after becoming dissatisfied with other local providers. After a little research, iEntertainment chose to sign on with Springboard in a cost-saving move.
“Our 28 servers were at a competitive facility…we felt it was time to explore our options when we called Springboard,” Phillip Hall, general manager of iEntertainment, said in a statement at the time. “Simply put, their value proposition was too good to pass up…they are significantly reducing our monthly hosting costs, their tech staff is first rate, their ownership team is actively involved in our account and their bandwidth and facility are the best in the Triangle.”
Springboard has dual OC-3 fiber connections from different providers and a mammoth generator for power backup. Its network operations center is manned 24 hours a day, and the company announced Wednesday is its adding two more members to its engineering team.
Hosting market just getting started
The Triangle, say Lee and Hanks, is where they want to keep their focus – at least for the time being. The market is vastly underserved, they say, so Springboard is looking to fill the gap by offering hands-on service around the clock.
“We’re local, fast and flexible,” Lee says. “And we’re private, profitable and debt free. That’s a large advantage to why companies should do business with us. All things being equal, customers want their server close to them. There is a huge need for service in our market.”
Hanks adds: “We’re extremely accessible to the market, which is something you don’t see from big companies … two owners, always available to customers, at anytime.”
Like the Triangle, the worldwide market for Web hosting remains huge, especially considering that most companies do not have a Web site or are not properly equipped to handle e-commerce transactions.
“Users are not getting the message about Web hosting benefits and are often confused about what type of vendor to choose, as well as what level of service to sign up for,” Christina Kasica, senior analyst at Ovum, told CyberAtlas. “We talked to over 5,000 companies in three geographical regions and uncovered some surprising facts about this market.”
More than half of the companies contacted by Ovum last year did not have a Web site. Of those with a site, only 14 percent used Web hosting, three-quarters of which spent less than $25,000 per year on it.
“These findings indicate the market is less mature than many people think,” Kasica said, “and highlight an expectation gap that it will be easy for vendors to stumble into without careful planning.”
The Ovum study predicts that the global market for Web hosting will grow from $10.3 billion in 2001 to $46.9 billion in 2006, with the United States and Canada currently and in the future, being the biggest spenders. The most rapid growth period will peak in 2002, after which time the global market value will have increased by more than 60 percent.
‘Room to grow’
So with the Web hosting market expanding at its current rate, how will Springboard stay ahead of the game? Well, physically, it’s already there, with almost 12,000 square feet, most of which is the Data Center.
“We have a lot of room to grow here,” says Hanks. “It’s extremely scalable, and there is space to grow into and expand within this facility.”
Just how much growth and how fast it will come remains to be seen, but, “We will grow until we fill up the Data Center,” Hanks adds. “We could double our customer base and still have room to grow, from a physical standpoint.”
Not only is Springboard planning to expand its customer base but also to increase it employee count from 15 to 25 by the end of the year. Yet more growth may come geographically, but not anytime too soon.
“We may look at acquisition and enter one market at a time,” Lee says. “But not until we’ve perfected what we have here,” referring to the Triangle. “We have the perfect business model here.”
Lee and Hanks make clear, though, that Springboard is not simply Utenzi under a new name and ownership. The similarities, they say, stop with building itself.
“They were extremely excessive on growth projections,” says Hanks. “Our business sense and our customer support sense are different.”
Adds Lee: “There was a lot of excess, typical of dot-coms. Everything was in abundance, and today, we have sound business practices. This is not (Utenzi), period. We have a different corporate philosophy.”
Walking into Springboard’s administrative offices, a relatively small, plain set of rooms off the end of a long hallway, it’s clear service supercedes appearance.
“We keep it simple…we put the money into our facility,” Lee says, referring to the secure, state-of-the-art Data Center. “We’re not answering to venture capitalists, and we don’t need to raise money because we’re not looking to deepen our market. We’re looking to get rock solid right here and stay focused on that.”
For more information, check out www.springboardhosting.com