Hosting Companies and CEOs 06 Feb 2014

A lot of people have asked me today, what my opinion is on BurstNet getting a new CEO. This is not unusual for me, a lot of people ask my opinion every time one of these things happens. Especially now days because I have significant involvement in one of Dallas's truly independent datacenters, which apparently makes me an expert on the hosting industry.

Until now, I haven't really thought much about CEOs coming in and changing things up. But really, thinking about it, it seems like a trend that should be concerning a little.

Is a hosting company's success really the result of a great CEO or instead a great engineer?

Every time I read about one of these established "industry standard" companies getting a new CEO, they always mention that they came from a startup that was outside the hosting industry (usually a startup that nobody heard about), but was acquired by some tech industry juggernaut:

Prior to joining BurstNET, JW Ray was the co-founder and Chief Operating officer of Learn.com, a world-wide leader in cloud based Learning Management Systems. Learn.com was acquired by Taleo, an Oracle company, in October of 2010. Mr. Ray also currently serves as the Managing Member of Backlog Capital, a venture debt fund, that focuses on the cloud industry.

As a systems engineer who has worked in hosting full-time since 2009, this seems foreign to me. And it's not because he came from a startup, before working on my own projects (in hosting), I used to work full time for several startups... so I totally get what startups are about.

From my perspective, the hosting industry is something where having an outsider CEO could potentially have bad effects on the organization. There's a certain art to running a business in this sector, and to do it well, you have to learn it from the bottom up.

Call me crazy, but I seriously doubt that BurstNET's new CEO has ever had to do any of these things:

These experiences are, in my opinion, what drives excellent leadership in a hosting business. Because then, you're not just barking orders and discussing pointless metrics -- instead, you actually understand realistically what your staff are capable of doing, and give them the right tools to get the job done.

But what about strategizing?

The key thing about strategy is determining what the market wants and then figuring out how to sell it. An outsider CEO isn't going to know necessarily what the market is looking for.

The best strategy is one that is built from the bottom up. Involve your support and sales teams... find out what is hot on the market and bring your dev team in to make it a reality. If you're using prebaked software from some vendor, you've already lost this game. The serious customers want to see that your organization has the engineering skill to build a platform. This is why OpenStack and Cloudware are big deals.

I'm not convinced that the hosting industry cannot produce good CEOs. If you look at Steadfast, I would say that Karl is doing a pretty good job with it.

In my opinion, putting a new CEO from some startup in at BurstNET isn't going to shake things up, because he doesn't know the hosting industry like an experienced person would. But then again, nobody has really thought of BurstNET as an innovative brand for quite some time...