CEO`s Blog

Happy New Year!

I am not too good at keeping New Years Resolutions, but I do want to write on my blog more often this year. I think a modest target of 1 entry per month might be achievable. I have been doing a lot of study on management, finance and the economy over the last year so lots to write about. So bookmark this spot and visit back occasionally.

I hope you all have a prosperous 2012!

Jason Frisch

Here I am in my hotel in Bellevue after attending my first MS hosting summit. In all honesty, it wasn’t such a riveting experience. I have never really thought of Microsoft, or any other company as a threat to our business for that matter, however it seems many in the industry and the US and Europe do. The general comment from most after the closing of the summit is that the no longer think of MS as a threat, not because they don’t have good products, but because they don’t seem to know what they are doing or where they are going either! There is no doubt that MS is quickly catching up to Google with it’s online presence though. Bing is taking market share, with more relevant results, its maps tool is actually better than google maps and as a mac user and apple fan, dare I say that zune is a more attractive system than iTunes.

I think there is a lot of opportunity for expansion in Japan using Microsoft’s products for small business productivity hosted on the cloud. In particular, Hosted Exchange and sharepoint seem to be great tools that even we at Tsukaeru have not implemented yet! With our new Parallels Automation platform though, I am sure it isn’t too far off. I foresee some great costs savings for our clients, over having all this microsoft gear in-house, as long as we can convince business that it is often more secure to have your systems in a datacenter where your staff cannot gain physical access to the equipment, while also saving money on IT staff and having better backups and recovery time in the case of a failure.

Partnering with Microsoft is inevitable for Tsukaeru to provide better solutions to our ever expanding business user market, and I think it is the way of the future.

We will be having our first private seminar for customers and partners in Kasumigaseki tomorrow. What is this all about? It’s about a renewed commitment to our clients and partners to provide unrivaled cloud services in Japan.

There has been so much hype about the “cloud” but no real substance in the media as of late. A lot of large corporations have released what they call their cloud, but it is nothing more than some virtualized servers (generally on expensive vmware), using inefficient systems, almost nil automation, long registration processes and difficult upgrades. How is this any different to what was called “web hosting” or “rental servers” here in Japan? Generally speaking, it costs more. It isn’t much more flexible or available “on-demand”. The marketing hype has just made cloud services more main stream, so now companies can charge more for them.

I am naturally happy that cloud services are seen as more trustworthy than they have been over the last 10 years. However, we have offered fully automated, flexible virtualized servers for over 5 years. What I see the cloud as, is a total replacement for your internal infrastructure, which means superior service is more important than ever before.

Hopefully I will get more time to update my blog from now on, with opinions on the cloud services market and related topics.

It has been a long time between posts. We have been very busy building out our support team by more than 30% over the past 3 months, and also released two new very exiting products: Keepit Online Backup http://ww.keepit.com and Tsukaeru CloudMail http://tsukaeru.net/plans/cloudmail/

After having a short break in February, I then just last week attended the Parallels Summit 2010 in Miami Beach, Florida. I have attended this summit from the very first one which I think was 5 years ago. Every year Parallels puts on a great show, and never fails to astonish me with its success.

This year was heavily focused on offering more services to small businesses. There has been a lot of focus on “Cloud Computing”, mainly based on the Amazon offering and Google Apps. However the truth is that most businesses don’t require any such services. They want easy to use messaging (email) and hosting services. At Tsukaeru.net we are planning to focus heavily on offering services that help small businesses to become more efficient, lower operating costs and hence, succeed in the current difficult climate.

I was also very humbled to receive the “Most Inspiring Award”, voted for by Parallels partners around the world. It has been a long road over the past 5 years, but is also very, very awarding. Our team at Tsukaeru.net has expanded, sales have grown rapidly, and we have a strong following from our great customers.

2010 is going to be exciting. We are going to provide more opportunity for customers to interact with our great team, introduce many new exciting products and strive to improve all aspects of our service. Please let us know if we are (or aren’t) doing our job!

I have just arrived back in Japan after attending HostingCon 2009, in Washington DC. All the regular faces from the Parallels Summit were there, with a lot of new people from other areas of the industry also. It is always good to keep on top of what is going on in the hosting industry in other parts of the world.

As is to be expected, there was a very strong focus on “cloud” services. However, there was also a lot of debate as to what exactly a cloud service is. I tend to go with the view that cloud services have been around for a long time, in the simplest for of shared hosting, or even good old email hosting. Anything that is outsourced to a service provider on the internet, instead of having a server in house, is indeed “cloud computing”. The larger players in the market seem to be putting a lot of effort into saying that is isn’t cloud unless it is infinitely upgradable, and charged by the hour. Naturally the do this as the smaller competitors don’t have the capital backing them to invest in such infrastructure. But just how needed is this. When you look at the actual price of these instantly upgradable, hourly charged services they are quite a lot more expensive than a VPS you will find from us at Tsukaeru.net, or almost anyone else for that matter, with uptime of over 99.99%, what exactly are you paying for? Are you not just paying so you can tell your boss, or your friends that are now “on the cloud”? It is probably only the top 1% of large online services that would ever require such extreme scalability at short notice. A standard VPS can be upgraded with a few hours anyway.

I found the very last key note of HostingCon to be the most informative. It was a shame that more people didn’t turn up. It was about how to manage your business, when you start to grow to more than a family business. Nothing about what to sell, or how to sell it.

It has been my focus over a year now to bring in a strong management level, and this has allowed us to continue to have high growth without lowering the high level of service and support we are often thanked for from our customer base that now numbers over 13,000. Keeping a satisfied and focussed team of professional staff is they key to continuing to provide levels of service above what your customers expect. Naturally, we get the odd customer that won’t be satisfied no matter what we do; can’t help someone who won’t help themselves!

I managed to sign a contract for a very exciting new service that we will release into the Japanese market in the coming months. I feel that it is a much needed service that no one has managed to provide in a way that this company has done. So watch this space for the exciting release!

There has been a lot of talk about how datacenter all over the world are wasting energy on hosting dedicated servers that are under-utilised. We estimate that the average CPU usage is somewhere in the realm of 20% or less, and available harddisk time is someone in the same range. This means that almost 80% of the energy put into a server is simply used in creating hot air, and then the large HVAC systems use even more energy to cool that hot air. If ever there was a blatent waste of resources, this is a certain on. Even a fuel-inefficient sports car has the benifit of looking good; a server inside a large datacenter just sits there with no one looking at it unless it has a hardware failure. A VPS server will use approximately 1.5 times the energy for the entire server compared to your low-end dedicated server, but will easily host 30 VPS and still only run at around 60% allowing for spikes in demand with even the most popular sites.

So what can be done? Well, to be honest we at Tsukaeru.net have been part of the problem. Even though we have offered environmentally friendly VPS that make much better use of available resources, we have also offered low-end dedicated servers (even if we provide more efficient CPUs than most of our competitors), and promoted them as an upgrade from a VPS. However, the truth is that our VPS plans blow away at least the bottom two dedicated plans in terms of performance. The problem is that the general population still thinks that they need a complete server to themselves, even if they will pay more for it with lower performance, and damage the environment while they are at it.

No more I say! Within the coming months you will see low-end dedicated servers completely removed from our service lineup. We understand that some customers will choose to go our competitors for severely limited resources just to be on a “dedicated server” due to this, but that is fine. We would prefer to provide better service to those that understand the benifits, and want to save money, while helping the environment at the same time. There is no easier way to reduce your carbon footprint. Hybrid cars will cost you more to buy, so will adding solar panels to your house, taking around 10-20 years to get any financial gains, and that’s with tax breaks. Where is the incentive in that, especially in business? Changing from a $100 (1man jpy) to a $30(3000 JPY) will not only save you money every month, you will also experience more flexiblity in managing your server, increase performance AND save the environment from excess carbon output that is simply creating hot air, literally. Our Platinum plan would actually beat more servers that cost upward of $200 (2man JPY) per month.

This is why we are campaigning hard to educate more of the online community about the benifits of virtualisation. Don’t be scared by the “shared” word. It is not shared hosting, it is a dedicated server with greater flexibility than a “pure dedicated” box. Come join the party!

I have now lived in Japan for over 11 years in total, starting with a year in highschool in Saitama. I never would have dreamed that I would end up building a house here as I had always been eager to return to Australia some day. However, with the success of Tsukaeru.net, I have gradually come to call Japan my home, or second home anyway. So…instead of worrying about the future too much, my wife and I decided to build a house in a new development a few hundred meters away from where we live now. It has taken over a year since we first started talking about it, and today the house was open to the public to see the structure before the walls go up.

Where the bath will go

Japanese style room goes here

We have a park on one side for the kids to play in, a farm in front, and a road behind so hopefully we won’t get built in for a while. Fingers crossed that a baseball won’t come flying in to break our windows. Our eldest boy will have to change schools, but the excercise from walking a bit further to school will be good for him.

If all goes to plan, we will be moving in around Golden week, the first week of May. Just in time for a nice spring BBQ!

It has been a wild few months since my last post. The economy continues to go downhill, but fortunately we continue to grow. We have seen some clients cancelling their contracts due to “lack of cashflow”, but overall we have seen an increase in users trying to save money on their current overpriced hosting.

In February was lucky enough to have the opportunity to go to Las Vegas for the 4th Parallels Hosting Summit. I have attended this summit every year from the first one in Washington DC, and each year I am suprised by the rapid pace that Parallels is becoming a large influence in the market. I chose to partner with them back in 2004 and have never regretted it once. They provide us with the most advanced systems available in the market, and recent reports suggest they now power 80% of the automated hosting market. Amazing! Las Vegas is like travelling to a different planet..

We have been in negotiations with a VC for the last few months. We have experienced rapid growth (average 200%) for the last 4 years, but to keep this up in the coming years I have decided to bring some more capital into the company. Our VC of choice doesn’t just invest and tell you good luck; they introduce clients and help with the management of the enterprise. I expect that our new partner will help with promoting our services to a new level of clientelle. You might see me in the news sometime too. My end goal is to IPO by 2012. This is our second major investor, apart from myself.

Here is my page on a great community of Web professionals http://www.tokyo2point0.net/profile/JasonF.

The global economy seems to be going pear shaped in a real hurry. Intervention by the central banks seems to have failed to boost the confidence of the market. The JPY is stronger than ever, making exports more expensive only worsening the first trade deficit in a quarter of a century.

So, how will this affect the future of JMF? Positively I think. Companies are looking to cut costs and reduce their overheads. One of the largest overheads that can be easily reduced is to remove the IT department of in-experienced staff that only slow down take up of new technology. Server management is a huge waste of money for many firms with a large online presence.

We have had a large influx of companies wanting to shutdown their “in-house” servers, generally using housing or collocation services somewhere in a big city. They have come to realize that a company that specializes in not only server management, but visualization can provide much better value for money. We have managed to reduce hosting costs for some companies by as much as 90%, while improving their uptime and website response times.

The worse the offline economy becomes, the more influence that online economy that is generally somewhat more efficient will succeed. Where do you look when you are searching for a bargain?