Rob Belgrave, CEO of hosting company Wirehive has fundamentally changed his business in the eight years of its existence. It has moved from being a hosting business to a consultancy as it recognised the increasing commoditisation of managed services and sought to focus its efforts on a key market..
“We feel that our business is about helping business transform the way they do business. If you are going to be in a business like hosting, you have to be focused - it is a race to the bottom otherwise. So in the beginning, we focused on an ecosystem of digital agencies,” he told the audience at the Managed Services and Hosting Summit in London on September 19.
“We could see that agencies would become dependent on technology, they started in marketing but it is built on technology. We wanted them to be able to do something different, and the market was changing as advertising revenues have been falling. A key part to the strategy was to saturate the market and make it hard for the larger players like Rackspace to displace us. This was built on a 'circle of trust' so we set out to build a brand and proposition with a sincere story, and this worked; we are now 40 people and scaling out rapidly.”
This model will become increasingly important in a commoditised market, he says, soon there will be just three big players left soon, so players need to select a focus.
“Coming from hosting, we found increasingly that clients were pulled towards Azure and AWS, so we launched a consulting business some 18 months ago, adding skill and value to the use of the big three cloud players. The big cloud providers and very complex and hard to work with, so there is a lot for us to get out teeth into. And it has worked, we are cash-positive, growing faster than ever, and positioning as a consultant and offering managed services on the back of that has been very good for us. We are finding that we can charge for a lot of stuff we used to give away for free, which is amazing.”
The chart shows the current split of his business
By getting involved that much sooner, at the design and discovery phase with clients, he says it can keep the annuity renewal rate higher, with a much deeper engagement. It did this in response to what the agencies were doing – they were having to think about their services other than advertising, so he aimed to be a step ahead.
It is all about thinking digital and being able to engage technology properly, he concluded.
