Ensim ServerXchange

Hosted operation platform makes entering the Webhosting trade as easy as flipping a switch. Learn how Ensim could help you turn on the profits at your ISP.

by Jeff Goldman [January 15, 2001]

ServerXchange, a popular hosted operations platform from Ensim Corporation, provides ISPs a centralized, automatic platform from which to offer Webhosting services. In concert with ServerXchange, Ensim's AppXchange gives users access to a library of Web enabled software, which could serve as a persuasive tool in customer retention for ISP businesses.

The company was founded in the spring of 1998, when Cornell University professors Rosen Sharma and S. Keshav departed academia and, along with graduate students Xun Wilson Huang, Snorri Gylfason and Samir Mathur, founded Ensim Corporation. In October of 1999, Ensim introduced the ServerXchange platform. Currently headquartered in Sunnyvale, CA, the company has 165 employees, with offices in Europe and Asia, as well as in five locations across the U.S.

Net endowments
The company recently closed a funding round that netted Ensim $64 million. James Phillips, Ensim vice president of product marketing and business development, suggests that this kind of financial backing indicates a rare degree of stability in an embattled Internet marketplace.

"We raised more money last month than all three tech IPOs," Phillips said. "Each of the IPOs that went out to the public market raised less money that we raised in the private equity market. That's very high valuation," Phillips added. "So we're grateful that we're able to do that, but it's just further validation that we've got some good stuff going on."

Flip a switch
Phillips contends that Ensim is to ISPs and Webhosting firms, what the automated telephone switch was to telephone service providers. Initially, an operator connected each phone call, but as call volumes grew, something had to give. The answer came in the form of the automated telephone switch, which allowed customers to connect their own calls, thereby removing the burden from the service providers.

"Hosting service providers today are facing exactly the same situation," Phillips said. "You've got a bunch of smart IT guys that are effectively like operators, fielding phone calls, setting up new customers, doing a lot of manual operations that are begging to be automated—we automate them."

Automation also allowed the telephone service providers to offer additional services like Caller ID and voicemail. Similarly, Phillips sees ServerXchange and AppXchange as linked offerings.

"It's not just for web hosting," Phillips said. "It's a platform for running a hosting operation, turning ISPs into ASPs, and really allowing them not only to cut costs, but to grow their revenue opportunities on a per-subscriber basis."

Virtually pliable
ServerXchange is delivered as a rack-mountable appliance that can manage up to a hundred servers. Administrators, resellers and end users all access the platform solution through an intuitive Web-based interface. Drag-and-drop capabilities allow for enormous flexibility in making changes to accommodate specific customer needs, and the application interacts easily with billing systems and other management platforms to facilitate all areas of administration.

A key selling point for prospective users is the flexibility of ServerXchange's instantServer technology that divides each physical server into a set of virtual "private servers," which look the same as dedicated servers to ISP customers.

ISPs can guarantee clients resource allocation in terms of memory, disk space, CPU and bandwidth for each customer, while adjusting resources through a drag-and-drop interface to match each customer's changing needs. As a result, server space is used much more efficiently and economically.

Using the ServerXchange platform, AppXchange offers ISPs a range of application services for their customers, attaching each application to a service plan on a pay-as-you-go basis. Ensim's partners for application deployment include Miva Merchant's e-commerce solution and HP's OpenMail e-mail suite, among others. Ensim also offers what it calls the Incredible Instant Incentives, or I3, customer-marketing program. The program offers rebates and rewards as each customer's volume grows, ranging from online marketing campaigns to a trip to Hawaii.

Advantage, scalability
Founded in 1996, Advanced Web Hosting and Design, Inc. currently supports about eight hundred customers. Rob Greenawalt, the Webhosting firm's chief executive officer, explained why the company now offers hosting services exclusively.

"Primarily, our focus right now is on small to medium business," Greenawalt said. "We do a lot of virtual hosting, but our primary focus is on dedicated servers."

A few months ago, Advanced Web Hosting and Design switched to ServerXchange. Greenawalt said the company is very happy with the results. "Since we got the Ensim system, it's been welcomed with open arms," Greenawalt said. "Our customers have been incredibly happy about it, and we've started seeing a significantly larger profit margin now, that initially wasn't available to us. Within a month to two months after we went on board with Ensim, we probably tripled our dedicated server base."

In justifying the company's rapid growth, Greenawalt credits the easy scalability of the Ensim ServerXchange offering.

"What Ensim has given people is flexibility beyond belief," Greenawalt said. "Just the pure ability to be able to allow them to grow. If someone just needs 1GB of space, an additional 5GB, they need more memory, they need more CPU, it's a matter of a few clicks and it's done. That's what they've given, and it's definitely the first that I've seen in the industry."

Price tag and rivals
Ensim will be releasing a high-end version of ServerXchange in this year, targeted to larger, enterprise clients. Phillips notes that Ensim's customers over the past couple of years have covered the full range from mom-and-pop hosting providers to international telecoms.

"What we've learned over the course of the last part of 2000, not a big surprise, is that those segments have their own unique needs and willingness to pay for the products," Phillips said. "So we're going to tune the products that target the different segments we're serving right now, and have a couple of products that are substantially better suited for the segments we're targeting today."

As a result, ServerXchange's pricing plans are currently undergoing a revision. Regardless of specifics, the result will be a pricing model based on the number of subscribers served.

"It's comparable to the competition," Phillips said. "Everyone pretty much is moving in this model. If you look at software vendors, and we are in effect a software vendor-even though we deliver our product in the form of an appliance, we're selling software-pretty much everyone that's servicing that space is pricing based on subscribers downstream."

And there definitely are others servicing Ensim's space. The company is in a tight market with close competitors Sphera and Systemsfusion. In responding to the challenge, Phillips notes that Ensim entered the market first.

"I am a happy guy when we go into an account and, say, Sphera is present," Phillips said. "Because it means the account is serious, they're checking out their options, and they're probably going to buy-and we absolutely never, ever lose.

"Customers are seeing in a comparison situation the value of our product, and have told us literally, you guys are twelve to eighteen months ahead of the competition from a product perspective."

— End  

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