Yesterday I held a big webcast to announce our big plans for 2011. To say it went well is an understatement. But in January we start offering all of these services and I want to make sure we are completely on record with everything that we are doing.
If you missed the webcast and would like to check our the official announcements check this out:
Did you miss the webinar? Here is the recording:
So what’s CloudBlock, Vlad?
It’s three different things:
1. It’s not a solution designed for the channel. It’s a solution designed for the end users that want the bare bones commodity email solution.
2. It’s “Mail” solution starts at $2.99/month and includes Exchange 2010 mailbox (5GB Mailbox, upgrade to 25GB available), optional mobility, built-in security. It’s your typical Exchange hosting available from tons of vendors around the world.
3. It’s “Security” solution that starts at $0.35/month and includes SPAM filtering, Virus filtering, malware scans, DDoS protection, address harvesting protection and business continuity (mail queuing). Unlike the hosting product, this solution is designed to protect your existing email server on-premise.
Most importantly, CloudBlock is not Own Web Now. It’s not ExchangeDefender. It’s not my people. We have licensed pieces of our solution stack for a project that we believe can be profitable.
How does it make sense?
Let me Vlad-ize it for you.
Customer: I want a Ferrari.
Vlad: Fantastic. I have a few!
Customer: So I spoke to a guy at a Hyundai dealership, what kind of a Ferrari can you sell me for $8,999?
Vlad: I can sell you a 1:43 scale model along with an F1 poster signed by Michael Schumacher.
Customer: But I won’t be able to drive it at 180 mph?
Vlad: Relative to the ground? Only if you’re driving it on your tray while an airplane is taking off. Which is against the FAA safety policies.
Customer: So I can’t understand why a Hyundai is $8,999 and a Ferrari starts at over $200,000?
Vlad: [ 2 hour speach ]
Customer: I get all of that with Hyundai according to their sales people.
Vlad: Guess I’m going to lose this sale.
Translate the above to all the conversations you’ve had and all the deals you’ve lost to Google Apps and Microsoft BPOS. In light of all the outages they have had, you lost. In light of all the inconsistencies among the products and Microsoft’s inability to even roll out their latest Exchange and SharePoint releases, you’ve lost. In light of endless fears about the privacy and security, you still lost!
Why? Because when the client is making a decision on the price alone there is no amount of features or business fit that you can talk about, they only care about the lowest cost.
Emphasized enough? It’s true. While you can excuse some of it on clients just not understanding what they truly need – or your inability to explain it, when something is seen as a commodity it’s only compensated and valued as a commodity. Which means cheapest thing wins.
So why did you do it Vlad?
Because I’m a CEO of a for profit business, not a CEO of a religion. Look, it’s obvious from all the pain out there that there is demand for this type of a solution. If people are willing to pay for the bare essentials, who am I not to take their money?
That said, this is another weapon in our partners arsenal. If you are facing a stubborn client that is not willing to listen to your recommendation for what they really need, and they want the cheapest damn thing out there – you now have something to recommend. And when they need more, you should be there to deliver it. We partnered in CloudBlock because we felt it had a unique value that doesn’t exist with BPOS or Google Apps – it doesn’t have a VIP partner list or another business model. So you don’t have to worry about your customers being introduced to the competitors of yours that we like more or being gamed to sell more advertising.
You now have a competitive chip in the commodity space.
Won’t this kill OWN, ExchangeDefender, etc?
There is a certain kind of client that only looks at the cost. So yes, that kind of client wouldn’t consider OWN or ExchangeDefender anyhow.
Will some of the existing clients/partners go to this? Yes. And we’ll make slightly less margin on them. But what’s our margin if they switch to a competitor? Now does it make sense?
If you can’t explain the difference between a Ferrari and a Hyundai then let them buy a Hyundai and when they become to depend on it and want to drive it at 180mph – you’re right there.
Remember: If you don’t have alternatives, your clients will find them on their own. Not everyone is looking for a Ferrari, either.
More details on this in January. We think this is huge for the channel even though it wasn’t built for it. Differentiate, differentiate, differentiate.