Microsoft, the good, the bad, and the ugly…

Ok, I can almost feel Deven (My buddy at Microsoft) cringing as this blog entry starts. Lets get to the point. Bluehost is big enough now and has enough medium sized businesses that use Microsoft Exchange that we are considering adding it to our list of services. Bluehost has made its mark in the hosting industry by offering low cost hosting with an emphasis on customer service. This isn’t exactly the market Exchange is going after, but we have had enough customers come to us asking after Exchange that it is something we are looking at offering. Here is the problem…

Microsoft is a lot of things, but stupid isn’t one of them, or is it? Microsoft exists in its current form by having mediocre software (In my not so humble opinion) that has always started off at ridiculously low prices. As the customer base grows and competition diminishes the prices go up and the quality of the software goes down (Internet Explorer is a PERFECT example of this). The quandary that Microsoft is in is how to make more money from a product that almost everyone already has (Office, and Windows OS). The answer is services. I don’t think Microsoft likes the answer, but it doesn’t change the fact that everything in our massively networked world is going online and most of the apps we use today will be run on or over the web sometime in the not so distant future.

So what to do, what to do? Microsoft needs users of its services for a lasting and recurring revenue stream and so of course the first thing they decided to do was shoot itself in the foot. Hear my out on this one – Microsoft is competing in a world where it will NEVER be the low price leader again. Linux is an incredible server operating system, but in my opinion still has a way to go to be viable on the desktop (Start the email flames now please). However, in applications running over the web Linux is the best option out there. The best part is that everyone using Windows at home would never know they were even using a Linux server. Our customers don’t care if they are on Linux or Windows for our hosting, they just want it to work. Exchange hosting is the same, or very close. This doesn’t mean I think open source Exchange solutions are better. In fact I don’t believe that at all, what I KNOW is that Microsoft still acts as if they are the only game in town, which clearly isn’t the case anymore. Let me give you some examples that make me scratch my head at what the “brains” at Microsoft have come up with to “dazzle” the potential client.

1 – Microsoft refuses to give you any price guarantee on server licenses or Msql licenses. The price is “x” today and in 12 months it could be “y”. It could stay the same or it could double. I was “assured” that they were working for “us” the clients to make sure costs were kept down. Thats like asking a Lion to guard a pile of steaks for you. Come on?!?!?!?

2 – Microsoft has decided their “partners” are idiots and so are building their own Exchange Hosting solution that comes out in less than a year. What does this mean? Lets look at this logically for a minute (Not my strong point :) ). The company that builds and licenses Windows Server (Not cheap), and Msql, and Exchange is going to to sell/license all that software to me and then promote their own product to compete with me for the business that I just gave a ton of money to license. I don’t think so! And many Exchange providers will agree with me, much to the chagrin of Microsoft. My costs are only a little bit higher right?

3 – Its expensive. Its really expensive for what you get. The alternatives provide almost all the same functionality for literally 1/20th the cost. That isn’t a recipe for success in anyones book and Microsoft knows it. Again, how to respond? As fast as possible. I would do the same. I would get as many clients as I could as fast as I could and give them a quality product with service like no other to keep them on board. Unfortunately for Microsoft they don’t excel (Good pun huh??) at either of those and their marketing doesn’t suggest they are cognisant of any of the issues I have mentioned above.

Clearly we are just another fish in the Microsoft pond. I would love to offer Exchange services to our clients in one form or another. I am just having trouble giving my money and clients over to a company that I think has a COMPLETELY different vision and direction from how I run my own business. In the end its what our customers want and demand from us, but that may or may not be the Microsoft solution…

Thanks,
Matt Heaton / President Bluehost.com

10 Responses to “Microsoft, the good, the bad, and the ugly…”

  1. I’m glad not to be the only one having ‘troubles’ with MSFT. Knowledge should be available for everyone, as this is the only solution to improve. We have already seen several proofs of projects being written in Open Source, with excellent quality. BTW, your services are running on some part of them (Linux). For our development we use Open Source products to create rather complicated systems for financial transactions. The funny thing is that we also did the same using MSFT products. Guess what, what do you think where the stablest platforms ? Another example, as to improve quality and deliver quickly a POC to the customer, we use virtual technology as such the customer does not need to configure anything. Hmmm, but what about the license if the OS used is MSFT. You can’t do it !!! So, what is the advantage. Sure, I know many people are bashing about MSFT, but we have to face it, MSFT has a very good marketing strategy, but from a quality point of view and used technology…there is a long way to go. They always complicate things by changing standards to their own benefit, of course, because they don’t have any advantage in creating consolidated systems. The more solutions and options we have … the more money. And , this is their vision…MONEY. Of course, this should be the primary concern of every firm, but this is exactly the problem. MSFT will earn money….but what about you, because your expenses are going to grow. And how many examples do we still need from firms being bankrupt after having switched to MSFT technology….I hope it is not you. Run your business….not MSFT !

  2. Gilbert says:

    Yep, I agree with you – I would never tie my ability to provide services to MS.

  3. [...] Matt Heaton writes a well-thought post about dealing with Microsoft in the ISP space. I worked for an ISP in Seattle that would never have considered adding Microsoft software to our data center. It was considered too insecure and too expensive. But that was 10 years ago. [...]

  4. Interesting post. Stick to your guns and continue to provide excellent customer service and you’ll continue to grow. You are right that we don’t care what’s on the backend. We just want it to work. I used a hosted Exchange Service before I came to Bluehost and it was nice….when it worked. But there wasn’t enough there to continue the price premium.

    One suggestion. Where Exchange has POP solutions beat is webmail. The Exchange solution is elegant. Horde or Squirrel are pretty terrible if the user is used to OWA. But Roundcube is elegant and very fast. Installing that for the user would be a big improvement for those who rely on webmail.

    Keep up the good work.

  5. Duane Malcolm says:

    I also think it’s funny Microsoft can charge for mediocre software and then charge for anti-virus software for to secure their unsecure software. It’s like going to a restaurant, getting food poisoning and getting charged to see the in-restaurant doctor.

    BTW, I just put in a help request asking for a new feature. That is to automatically upgrade cutomers to you new features, for example, more disk space, bandwidth and unlimited domain hosting. It would be great if I didn’t have to wait 1 year (or two) to renew my account to get the latest upgrades.

    I think I missed out on these upgrades by tens of days. Cheers Matt. I have certainly been impressed with Bluehosts service.

  6. Paul C. says:

    I agree with you 100%. We are currently looking for something to replace our (extremely) old Netscape Enterprise Messaging email servers. Many of our customers and employees use Outlook, so I looked at Exchange. I just couldn’t believe the price point they wanted per mailbox. A company with a few employees may be able to stomach that, but ugh, not a small company that provides services to a small industry.
    We are looking at @mail (atmail.com) for our mail services. It can sync with outlook and has some really awesome features. No I don’t work for them either, they were recommended to me by Steve at FSL.com. :) (another great linux service provider!)

  7. [...] mattheaton.com » Blog Archive » Microsoft, the good, the bad, and the ugly… Microsoft really needs to get its act together on its channel for communications products. This is an interesting post. I didn’t know Microsoft was going to host Exchange itself. whooaaa! (tags: Microsoft Exchange) [...]

  8. Sam Freedom says:

    Hey Matt, first of all, I like the way you write. It’s really straightforward and knowledgeable while, at the same time, really simple – enough for an intelligent, but non-technical, guy like me to understand. It gives me a clear window into another world.

    You described me perfectly when you said most don’t care whether you’re running MSFT or Linux as long as it works. I’m not a customer yet but I’m thinking about it and believe me, what I need most is to make sure things work, period.

    I also need to know what, if any, are the cons to not running Windows Exchange. What does that mean to me on a daily basis?

    MOST IMPORTANTLY – As a potential customer, 2 things matter to me most:

    1) That you’ve got someone willing to bend over backwards to make sure my sites will be up and running 24/7 and

    2) That you take a calm and reasonable approach to unusual things such as if on any given day I run a huge campaign that brings a million people flooding through my site. I can’t stand webhosts that feel as if they are supercop and treat such inconsistencies as if something bad is happening and I am guilty immediately.

    It hasn’t happened yet but I’m developing some big joint ventures and it could easily begin happening at some point. I just want a stable place to hang my hat…

    Thanks, and keep up the fine writing,
    Sam

  9. [...] HOW TO: Send as alternate email address Share this post: email it! | bookmark it! | digg it! | live it! Posted: Friday, April 13, 2007 6:08 PM by Rui Silva Filed under: Coolreading [...]

  10. Ian says:

    There is only one Exchange equivelent for linux that is truely compatible without connectors that provide half the functionality. http://www.postpath.com I don’t use it as waiting to find a host that offers real email space. I use Exchange hosting and have to juggle with 1G email box while hotmail offers 5G and wow if I could have your virualy unlited storage with and exchange altenative and a reasonable per seat licence it would be great.

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