May, 2001 : Verado Holdings .. No Rest for the Redundant

📅 May 28, 2001 - It's probably the word ?complete? that makes the idea of completing a nationwide network seem like an end in itself for a Web hosting company. After all, the business-building order of operations, traditionally, is: complete the facility, then sell the goods. But Web hosting companies operate in a landscape where there are no ends in sight, in a business where it's the facility that you?re selling. With traffic on the Web doubling every hundred-or-so days, the companies that build the infrastructure that supports that traffic are in a constant race to keep up.
Which is why, when Web hosting company Verado announced in May that it had completed its nationwide, fully redundant network, the company's Senior Network Engineer Mike McNamara described the triumph as simply a step in the ongoing progress of the business. ?Is it a plateau?? he says. ?I think it's more like a stepping stone, or a stage for us to point ourselves onto expanding the network larger, faster.?
Since the beginning of the year, Verado has been working to meet the standards set out in the company's revamped vision of itself. After several months spent assembling a new executive team, the company, still operating under the name FirstWorld Communications, announced in January that its plan for the coming year was to focus on its managed and data center services. In February Firstworld Communications changed its name to Verado Holdings.
The new executive team, the new name and the refocused services are all part of a serious play by the company for a front seat in the Web hosting business. The completion of the nationwide network is a big step in that direction, and it makes a big statement. ?The message we?re trying to get across to our customers and our potential future customers,? says McNamara, ?is that Verado is a nationwide player.?
The network now includes data centers in Portland, Santa Clara, Irvine, San Diego, Salt Lake City, Denver, Dallas and Houston, as well as data exchange points in Chicago and New York City. ?Our data centers are primarily in the Western part of the United States,? says McNamara, ?which is why we tuned up the data exchange points. So that we can carry traffic from coast to coast, and keep it on our network longer, under better control.? Instead of setting its customers? traffic adrift in the public Internet, where the traffic is heaviest, Verado can carry it across the country, delivering the data with less delay. ?Once you throw the traffic to the public Internet, it's almost like a best effort traffic route,? he says. ?We?re shooting for much better.?
And the nationwide network, says McNamara, has placed the company in the same arena as some impressive company. It's a milestone. And while it may not yet compare to some of the larger Web hosting companies in size, Verado is confident in comparing its services to businesses like Exodus and Digex who have also begun to focus on the ?managed hosting? market.
Having placed the emphasis on high-end hosting services, Verado is also in the market for high-end hosting clientele. ?We target fortune 1,000 businesses,? says Kellee Johnson, a spokesperson for the company, ?and we span several industries, like e-learning, charitable organizations, financial services, health care, e-commerce and ASPs. It runs the gamut.? But emphasizing the large-scale services doesn?t mean cutting the small-scale clientele out of the operation entirely. Johnson says Verado's smaller accounts often turn into larger ones as the businesses grow. ?A customer may have a simple need in the beginning stages, and then they see how these kinds of services can help accelerate their models.?
Johnson says Verado's new services are gaining the company some attention. ?The refocus is actually putting us on the map in a big way,? she says. ?People know we?re out there, and they?re relying on our services.?
Part of the refocusing effort has involved taking the company's attention away from other services. In April, the Verado announced that it had sold its FirstWorld Internet Services dial-up subscriber base to EarthLink. And in May the company sold its subsidiary Optec Inc., a Web integration services provider it acquired in 1998, to an affiliate of JMW Capital Partners. Both sales were part of what Verado is calling the divestiture of its non-data center assets. And on May 24, the company announced that it would be streamlining its operation, cutting its non-data center workforce by 176 positions, about 58 percent, in the 60 days that followed. This last announcement was impressively well received by investors. On the day of the announcement, shares in the company jumped by 22 cents, more than 70 percent from its opening at 34 cents.
All the activity reveals the ?completion? of the network to be significantly less final than it sounds. As McNamara says, it's less of a destination than it is a stopping point along the way to further expansion. There's certainly more network to come, but according to Johnson, the path isn?t quite clear yet. ?It's probably still too early to tell,? she says.
The next step may still be uncertain, but one certainty is that connecting the network nationwide has placed Verado in an excellent position from which to operate. ?We have eight data centers around the country,? says Johnson, ?that are completely built up, paid for and they?re ramping up pretty fast. So we have not overextended ourselves. We?ve grown at a really steady pace, and now we?re all about execution.?