SherWeb Puts the Service in Hosted Service

Cover Story

SherWeb Puts the Service in Hosted Service

By Paula Bernier, Executive Editor, TMC  |  April 25, 2012

This article originally appeared in the April 2012 issue of INTERNET TELEPHONY magazine.

Many of the best companies are founded by people who themselves discovered the need for a solution, and then went on to establish businesses to deliver a product or service to meet that need. Such was the case with SherWeb, a Canadian company founded by brothers Peter and Matthew Cassar in 1998.

Back in the late 1990s Matthew had created a website for a personal project and was looking for someone to host that website. But he couldn’t find many good options, especially in Quebec, at the time. So Matthew and Peter decided to launch SherWeb.

The company got its start as a traditional web hosting business, offering dedicated servers and the like. But, over time, SherWeb evolved into the hosted services provider it is today.

SherWeb now offers hosted Microsoft (News - Alert) Exchange 2010, hosted SharePoint Foundation 2010, cloud-based e-mail archiving, and hosted CRM, as well as its traditional web hosting solutions.

The company in 2005 embraced the SaaS (News - Alert) model, began its partnership with Microsoft, and started aggressively marketing its services via the web. That enabled it to move to the next level – becoming a rapidly-growing enterprise, and expanding from 12 to close to 150 employees, says Matthew.

He adds that the SherWeb was among the first companies in the world to offer the various versions of hosted Exchange and SharePoint. For example, in November of 2010 SherWeb announced the release of hosted SharePoint Foundation 2010, the latest version of Microsoft's web-based collaboration solution, and one of its fastest growing products with over 100 million licenses sold worldwide. This solution enables teams to communicate easily and more effectively and collaborate through a central location accessible from anywhere.

SherWeb’s pioneering work was recently noted through its selection as the winner in the Hosting Partner of the Year category at the 2011 Microsoft Partner Network IMPACT Awards. “Our annual IMPACT Awards celebrate the great work done in the partner community to help customers respond to their business challenges through the benefits of technology,” says Eric Gales, president of Microsoft Canada Inc. “Technology partners like SherWeb are always finding new and exciting ways to develop and deliver innovative technology solutions,  making them true leaders in their respective fields.”But SherWeb is not relying on Microsoft technology exclusively. SherWeb has a homegrown archiving solution that’s an option of its e-mail offering. The company in January introduced the SkyNox cloud data backup solution, which allows seamless backup operations and fast recovery for both workstations and servers. It features round-the-clock support, flexible storage, and three data recovery options. SkyNox employs 448-bit Blowfish encryption, transferred via a proprietary protocol, and stored in SherWeb's Tier 3+ data center.

“We are thrilled to add online backup to our cloud portfolio,” says Peter. “The launch of SkyNox further expands our decade-long commitment to providing innovative high-end hosting solutions to SMBs.”

While small and medium businesses with between one and 1,000 users have been SherWeb’s sweet spot, and continue to contribute most heavily to the company’s business and growth, the company is gaining traction with large enterprise customers as well.

Matthew attributes that to several factors, including the recent acceptance of SaaS and cloud models by enterprise customers; the economy, which has more companies looking for savings and ways to free up their balance sheets via opex vs. capex spending; and the fact that SaaS and cloud models have now been proven. The fact that major software companies such as Microsoft and Oracle (News - Alert) have recently gotten behind the cloud and are promoting its benefits has played a key role in enterprise customers’ embrace of this new model, he adds.

SherWeb reaches out to potential customers via the web and channel partners. The company has an aggressive SEO strategy and an affiliate program, through which affiliated websites that direct traffic that results in sales on the SherWeb site get a cut of the business. And while the channel, which includes resellers and large distributors, generates less than 25 percent of SherWeb’s business, Matthew says that’s definitely the go-to-market channel that’s growing the fastest.

In all, SherWeb serves more than 20,000 business customers in at least 100 countries. More than 65 percent of those customers are in the U.S. While SherWeb has done one acquisition in its life (the April 2011 purchase of the DNAmail division of Ikano) in an effort to expand its customer base, M&A is not key to the company’s strategy.

“We don’t want to lose focus,” says Matthew. “We really believe in focus at SherWeb.”

And he adds: “We’re growing quite rapidly organically.”

Matthew declined to provide specific financial details of SherWeb, which remains a privately-owned business held exclusively by him and his brother. But Matthew did say the company has been profitable since the early days and that margins in this kind of business are strong. SherWeb, he says, has gross margins around 60 percent-plus, and profit margins at around 20 percent.

That helped SherWeb grow 1332 percent from 2006 to 2010, leading to its appearance last year on the North American Technology Fast 500 list from Deloitte (News - Alert).

“We are living proof that Canadian technology companies with high added value can be competitive in the North American market and our entry into the Technology Fast 500 demonstrates how SherWeb can claim its place among the most important hosted services providers in the world,” says Peter.

SherWeb attributes its success to delivering a product line of messaging and collaboration and related solutions that all companies need, and to providing exceptional customer service relating to that product portfolio.

SherWeb is also very competitive on price, adds Matthew.

“We don’t try to be the cheapest around, but we understand in today’s world that price is important,” he says.

Matthew says that SherWeb customer service is available 24x7, and that customers can reach the company for assistance via any medium they like – whether it be the phone, e-mail or chat. SherWeb makes sure customer onboarding is as quick and effective as possible. Noting that e-mail has become mission critical for business, Matthew adds that SherWeb guarantees 24x7 uptime on its services, and offers strong SLAs to back that up.

Customers of SherWeb also have at their disposal a web-based control panel through which they can control, configure, and set policies for their accounts.

“We want to make this easy to use, easy to adopt,” says Matthew of all of SherWeb’s hosted and cloud-based solutions. “We really believe cloud is an important model, and an important trend that is here to stay, but it needs to be easy to use and very reliable.”

Edited by Jennifer Russell


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