Web Hosting News

I’ve offered this explanation before, but it’s been quite a while, so I’ll reiterate it here quickly.

Every so often, in the course of interviewing a source for a website feature, I end up with far more information than could possibly fit into the feature, and often with things I’d love to discuss on the site. Rather than run two features on the same company in the space of a couple days, the best way to deal with that extra information seems to be a supplemental blog post.

This week, I wrote a feature on Mailtrust, and the company’s outlook given its not-so-long-ago acquisition by Rackspace. I spoke to president Patrick Matthews and senior manager of products Kirk Averett, both of whom were good enough to talk for quite some time and provide me with quite a bit of insight into their business - much more than made it into the article.

In particular, we discussed the company’s relationship with resellers (and that of the larger overall Rackspace organization) at length, though I didn’t have room for that material in the story. I had a chance to mention that a bit in a news story we ran yesterday about a new Mailtrust reseller offering. But I wanted to give it a little additional space here in the blog.

Resellers don’t typically spring to mind when you think about Rackspace. But resellers were a big part of Mailtrust’s business in its pre-acquisition life as Webmail.us. This was the spark for the reseller discussion - basically, I wanted to know how the reseller business fits into the Mailtrust model now that it’s under the Rackspace umbrella.

It’s still a big part of the company’s business, is the short answer.

But there’s more. Matthews and Averett had a lot to say about the company’s reseller relationships and the role of resellers at Rackspace.

According to Averett, the reseller side of the company’s business is still strong - the company has has about 500 resellers, which contribute a significant percentage of the company’s total mailbox count.

Of the company’s evolving reseller vision, he says:

“We’re perhaps more committed to the reseller side of our business now than before, because now we have an even greater appreciation of the value it adds to other people businesses. Obviously, there are hosting providers for server hosting. But what about CRM? There are a thousand other things that people either associate with email or could associate with email.”

I think for an awful lot of reseller customers, we’ve actually gotten better since we were acquired by Rackspace.

What’s more, the company is still pursuing reseller relationships actively, to the extent that the Mailtrust website conveniently includes a nicely organized list of the benefits of being a reseller of its services.

The reseller effort at Rackspace, though somewhat less evolved, or a smaller part of the overall business, than the one at Mailtrust, is nevertheless based on the same very basic principle. Averett phrases the basic reseller reality like so:

“They have a relationship with the customer for some other reason. And there’s a chance that customer was never going to be our customer without that reseller being there and having its own relationship. So we’re happy to gain customers through that kind of wholesale marketplace.”

Matthews extends that thought to the Rackspace partner program, which by the sounds of it is somewhat more of a referral-based program, whereas Mailtrust’s reseller offerings are more white-label fare. They both, however, “believe in partners.”

According to Matthews:

“The [Rackspace] solution partner program is extremely strong. We sort of look at it as the most basic kind of reselling: someone has a customer relationship where you don’t, and they bring the business and profit from it. It’s the simplest definition of kind of what a reseller is.

“If you were to look at the Mosso division of Rackspace, you’d see multiple layers to the reseller program. It’s not just the Mailtrust division that’s engaged at this higher level of reseller program.”

Averett expands on the Mosso connection to resellers:

“They offer a platform where you bring your programming on top, and of course, the programming can just be an HTML website, or PHP, MySQL and so on. There are an awful lot of small web hosters who are maybe mostly a design business but also do some hosting. They are a great fit to work with someone like Mosso. They don’t have to think about servers or scaling.

“To go to somebody like Mosso and say ‘I have 500 customer websites and I’m having a hard time keeping them running’ - in the end, that design shop is now reselling Mosso’s services to help their customers run their websites.”

Of course there are reseller synergies between divisions. For instance, that hypothetical design business that turns to Mosso for hosting could also quite easily reach out to Mailtrust to help it provide email accounts to those same customers.

Rackspace certainly isn’t going to turn away business from resellers, even if the model isn’t core to its server hosting business. But according to Averett, that basic-level reseller reseller relationship does have a place at Rackspace, and did before Mailtrust ever existed.

“In that simpler level of reseller relationship, there’s this huge network that Rackspace has established to help customers connect with each other and to bring customers on to Rackspace servers who otherwise didn’t really know about Rackspace.”