Start-ups without millions in venture capital have to make their dreams a reality by operating on a shoestring. But they can’t do without computers, applications or the people to run them.
A good way to make that dream happen is becoming a customer of Everdream, a Fremont, California company. The Application Service Provider (ASP) specializes in small business subscription computing by outsourcing a small company’s IT department. After signing an outsourcing contract, the postman rings twice with the requisite hardware -Pentium powered computers. The ASP has them configured for Internet access and the appropriate business software. Then it provides the expertise to make them work.
“No one wants to build their own system,” says Russ Rive, chief technology officer and founder. He reports his customers don’t want to spend their own resources on non-core functions because “it doesn’t increase their competitive advantage.”
An attorney, for example, needs a paralegal that can help grow the practice, not an IT professional proficient at backing up the database. “But when you hand over your database management to us, you have the world’s best technologists working for your business,” he continues.
The psychology is powerful, since Rive notes most people are technophobes. They really don’t want to know how to accurately back up and recover lost data. Yet they stay awake at night worrying that mission critical data will vaporize for a reason they can’t understand. The ASP allows them to let their provider do the worrying, since nightly back up is part of Everdream’s service.
Access to an Expert
Everdream’s customers feel comfortable knowing there will be a person at the other end of the phone to tell them why their computer won’t boot up, even if they call at 3 a.m. or on Christmas Eve. “When you contact us with a problem, we own it until it is resolved. You will never be passed on to another vendor or service provider,” informs Rive.
Buyers pay a monthly fee; the basic service costs $150 per month per desktop. Customers can cancel within the first 30 days if they are unhappy. Rive says that’s a fairly strong guarantee because “the first 30 days are usually the roughest.”
Customers range from a lone ranger working out of a spare bedroom needing just one machine to growing companies with more than 100 seats. These are typically small businesses or satellite offices for large corporations. Rive says Everdream is spending its marketing dollars targeting buyers who need between two and 20 machines.
Currently Everdream has customers in 18 states. Its market area is not geographically limited because it can service its computers using a 56K modem. Customers don’t have to worry about whether they have to have a DSL line if it’s not available in their area yet. The company hosts the applications on its machines, which is why it can offer its services at such a low bandwidth.
The two-year-old ASP has formed strategic alliances with major technology providers to offer these high-powered solutions to its customers. For example, it uses Critical Path for email and Connected Corp. for back up capabilities, among others. Everdream brands their services so its ASP buyers just have to deal with one company.
Everdream’s service level agreements (SLA) are so simple customers can recite them in their sleep. “We guarantee things will work,” says Rive. He likes SLAs because he believes it helps newcomers cross the line into outsourcing. SLAs “take some of the risk away,” he points out.
Deciding to Outsource Itself
For example, if an Everdream staffer doesn’t answer the phone in 90 seconds, the ASP will take it upon itself to make it up to the customer. For example, it will allow the customer to enjoy the next month’s services free. “Our customer service has to be immaculate,” says Rive.
It can offer top level customer service because of its extensive database. “If a customer called yesterday with a problem and then called today with the same complaint, we need to know that,” he explains.
Because this database is so important, Everdream originally considered handling database management in-house. But after careful study, its staffers recommended outsourcing that task. The company began a search and narrowed the short list to StrataSource, another Freemont company specializing in ecommerce infrastructure and database management.
Before selecting StrataSource, Rive talked to StrataSource customers who had suffered a disaster and had to live through the terrors of data recovery. “We had to know what happened when things went wrong,” he explains. StrataSource received rave reviews under the worst of all possible conditions. “Customers told us they really came through,” he continues.
Rive proffers the same advice concerning selection of an outsourcing provider to Everdream’s potential buyers. Do the research, he opines. Make sure you know what you need and understand how it will be delivered. Moreover, it’s important to have a clear understanding of the service level agreements (SLA)s up front. If the provider promises to back up your data every night, monitor their performance and have penalties if they can’t deliver.
Subscribing to a Solution
He says his customers refuse to deal with another computer problem. That’s because they have subscribed to a solution.
Lessons from the Outsourcing Primer:
- If disaster recovery is part of the outsourced process, talk to other customers who have experienced data recovery to learn how the ASP provider operates under combat conditions.
- Even small companies with just one employee need to outsource their IT needs.
- Outsourcing IT skills allows the industry’s best to work for you.
- You don’t need a DSL line to work with top flight ASPs. A 56K modem is fast enough.