Earlier today I held our final webcast of 2010 – in no small way it’s the biggest, most ambitious thing we’ve ever done. And we’ve spent entire 2010 to bring our organization and our relationships to the level to actually make this possible.

I’ve posted my professional thoughts on the subject as the CEO of Own Web Now here: ExchangeDefender Managed Messaging. Here is the more volatile angle:

In a nutshell: I’m tired of bitching, moaning and excuses for not building a business model around the cloud and the messaging platform. I know there are plenty of real business concerns that are hard to make but try to think back to when you started a business and the faith you had in yourself and your solution. Were you immediately profitable? No. Did you have a winning combination that was fool proof? Probably not. But over time things get perfected, details get ironed out and you build a successful business model on top of it. Yes, it took a ton of sacrifice. But look at you now!

Many are looking at the cloud right now and the margins make the sacrifice component less and less tasty. Nothing good happens while standing still in an ever changing world. Not for you, not for me. So considering how well we’ve done through the years, we owed our partners this one. Here is what it is:

Completely managed end-to-end messaging solution built and supported by one vendor with your brand name on the front. When I say completely managed, I mean it: We’ll configure it. We’ll install Outlook. We’ll migrate the mail profile. We’ll support the end user. We’ll bill them. We’ll collect money from them. We’ll cut the commission checks.

This is a culmination of all the bitching, moaning and complaints feedback we’ve gotten about the cloud. Some of it is very legitimate: It takes a lot of time to run the business side of billing, collections and accounting. It takes a lot of time to do the setup and migration but clients hate paying for it. Some of it is not.

So what did we actually do?

First of all, we changed nothing. Our packages are still the same packages with the same pricing, same offering and same specs.

We added a new tier at the top of our offering that includes everything. Everything. Trust and believe that. Because if it breaks, we don’t get paid.

It starts on January 1st.

Initial response has been amazing – and I hope we help a ton of people build a great business in the cloud. This is, pardon the self high five, huge. I don’t know of a time that someone decided to do all of the work – end to end – under your brand and even give you control of the account.

One question did stand out: “So wait, you’re going to set the price on this?* Cause I can sell it for $75/month easy.” Slow down. First, the price has to be set in order for us to actually bill the client – and it gets really messy very quickly so it’s not something we could answer right away. Second, we kept it relatively low because in order to make money in the cloud you need volume. Scratch that – in order to make any value on this as an MSP/VAR you need volume – you need a ton of clients to farm and deploy your existing MSP solutions into. If you’re looking to get rich on a few uninformed clients you’re really cheating yourself out of building a huge market presence for yourself.

I’ll explain the reasoning behind the rest of these moves throughout the holiday season. I’m sure the more cynical in the bunch would doubt the sincerity of what we’re doing and I have two things to say about that: 1) Check our track record, we’re always behind our partners and 2) Sitting around and doing nothing will always lose to us actually doing something to help.

Looking forward to a great 2011 with all of my readers and partners. Thank you for your support and attention, as always!

* I am not providing the actual pricing structure in public because this will only be available through our partners. Want to know? Sign up here.

Good headline, eh?  

I’m sure many of you who hate my guts would probably say “Vlad, your service, your people, your reliability and this blog are the reason!”

Hey, if you can’t laugh at yourself who can you laugh at?

In November, we decided to find out.

It’s no secret that cloud is a huge deal.

But how big?

Well, ExchangeDefender is primarily deployed to protect on-premise SMTP servers – Exchange, Gmail, Postfix, Lotus and Sendmail (in that order).

It is ONLY sold through our partners. We make $0 direct sales.

November.

For the first time in product history (since 2001), ExchangeDefender has lost more accounts to third-party Exchange hosting deployments than our competitors or web hosting providers.

This is significant for several reasons:

1. Typically, we lose accounts when partners go with another provider and switch their services elsewhere – this trend stopped with the launch of ExchangeDefender 5 last December.
2. Losses are to direct model Exchange resellers. Looking at the MX record directly goes to a provider that you can get Exchange with a click of a mouse.
3. These aren’t clients cutting costs of going out of business – such as moves to the likes of GoDaddy or Gmail – these are removals of the MSP from the food chain.

I’ve said it way too many times but I’ll say it again – channel is dying. You need to retool, now.

If you aren’t offering your clients Exchange – others are and statistically speaking – they are taking your clients away from you and eroding your business. Don’t worry about OWN or ExchangeDefender – we’re doing better than we ever have.

If you aren’t offering Exchange and other cloud services, you need to. Join us, we’ll show you how. We’re making a killing in the cloud, and you should be as well!

In the recent months I have been talking to several of our close partners about the competition, specifically with regard to Microsoft’s BPOS product. Currently, Microsoft has the single biggest advantage in the marketplace for Hosted Exchange and that advantage is the price.

There are some nuances that can be argued over – such as liability, cost of billing, whether or not it is or is not channel friendly, features, limitations, etc – all of which have been addressed in one post or another on Vladville.

The only time I hear about BPOS is when our partners lose their clients to Microsoft.

Let me restate that: The only time partners lose business as VARs/MSPs/etc is when the clients realize that they can work directly with Microsoft and that there is no reason to even consult with the partner.

This is not the case of Microsoft not being channel un-friendly, this is the case of capitalism and Microsoft providing something that the end users and businesses demand.

In this scenario, the discussion comes down to price: Can you do it cheaper than Microsoft and remain the service provider or are you on your way out?

For a lot of people dealing with BPOS, this is their last meaningful IT project they will undertake: the migration to the cloud. Literally all the successful stories around the direct-to-user cloud are from integrators that helped the client move on up.

Can’t fight that.

If the price is the only consideration, we’ll help you keep your clients. Certainly not under the Own Web Now umbrella or our staff & service – but the time for discussion on whether the cloud is real or not is sort of a mute point when you’re losing clients and opportunities to Microsoft who is one tool (Kaseya/LPI/nAble) away from making you an unnecessary obstacle.

If Exchange is to be a commodity, you need it in your solution stack with the appropriate disclaimers – and we’ll help you deliver it. If on the other hand you expect service levels and a product suitable for business, we already help tens of thousands of you deliver it today.

If you’re interested in working with us (and details), vlad@vladville.com.

It launches in November.

If it’s easy, everyone will go for it.

Only a small fraction of people appreciate the benefits that can be realized from complexity and the true power that comes from being able to completely fine tune everything to perfection.

Most people aren’t perfectionists.

Make it simple to use and obtain.

Make it easy to understand.

Make it relate to their problems and frustrations of everything they have seen so far.

Experienced skepticism aside, people appreciate “free” beyond anything else.

. . .

These lessons, which much like any business book are just common sense, are seriously starting to make me reconsider how we manage the sales, distribution and positioning of all our products.

Question being, how quickly can you expect to see ExchangeDefender or Exchange hosting provided for free?

Earlier today I got a question that I feared answering for a long time. I have to be completely honest and admit that I didn’t think it would take this long for someone to ask it, especially considering that most of my blog posts are about the future of IT solution providers. The question is very similar to the scene where the Bob’s ask Tom to describe his job: “What would you say… you do here?”

The question posed to me was:

“With all the stuff that you guys are doing with Shockey Monkey, are you guys giving up on being a security company and moving towards becoming a CRM player?”

No, we are not.

Now, the longer part of that answer is a little more complex. You see, for the better part of the past 20+ years, Microsoft has controlled the world of small business applications. With few small distractions by IBM, Novell, Intuit and even Linux, the world of business computing has been all Microsoft and nothing but Microsoft.

Microsoft was able to extend it’s relevance by abusing it’s monopoly to blackball computer manufacturers, crushing Netscape by giving IE for free, etc. But they were not prepared for the Internet. They were not prepared for mobility.

This has opened the marketplace to the level that Microsoft is no longer a dominant platform – and very soon not even a dominant business software solution. Today Intel bought McAfee. In cash. They could have gotten them for far less in the past. Yet, they decided to go for it now. Why?

Why? Because Microsoft is no longer the defacto platform of the Internet, mobility, search and application. Which means dealing with security outbreaks will become a bigger and bigger business.

Everyone that has been reading my blog has seen what Own Web Now has been up to.

I want us to extend our footprint in security — but I now also have the opportunity to extend our applications.

So the answer to the question of if we’re changing our focus is yes. The “platform” game is pretty much set. I don’t see many people buying servers. Ever again. Yes, I’ve heard about Aurora and I’ve heard about EBS and I’ve heard about WHS. Very impressive. Except it doesn’t sell – because people buy solutions, they don’t buy hardware.

Follow what sells. Everything else is a distraction.

On Friday I actually got into an argument with one of our partners about what is causing an issue with the sudden stop of mail flow from ExchangeDefender. It immediately prompted the “My name is Vlad and I’ll bet you $100 that this will fix it” support policy for anyone that wants to argue with me and consequently, “Vlad is no longer allowed to call partners to help them with technical issues” policy.

There is this new thing in Exchange (new as in it’s been there for 4+ years) called Backpressure. It’s documented here in great detail. In a nutshell:

Exchange 2007 and beyond comes with a self-monitoring system called backpressure that will either temporarily or permanently stop the hub transport role. It monitors memory and drive space. If you start running out of either, Exchange will either temporarily or permanently stop accepting inbound mail.

Here is what it looks like from the outside:

telnet 1.2.3.4 25
Trying 1.2.3.4…
Connected to clientserver (1.2.3.4).
Escape character is ‘^]’.
220 clientserver Microsoft ESMTP MAIL Service ready at Fri, 23 Jul 2010 12:20:28 -0400
ehlo ownwebnow.com
250-clientserver Hello [65.99.255.226]
250-SIZE 10485760
250-PIPELINING
250-DSN
250-ENHANCEDSTATUSCODES
250-STARTTLS
250-AUTH
250-8BITMIME
250-BINARYMIME
250 CHUNKING
mail from: vlad@ownwebnow.com
452 4.3.1 Insufficient system resources

Note: In order to check for inbound mail problems you should be using an SMTP diag. Your Exchange will still be functioning when the backpressure brakes kick in.

If you’re an SBS user, make sure you have at least 2x RAM (or at least 10GB free) disk space free on the volume on which Exchange resides. If that is not immediately possible, turn off backpressure and restart your Exchange Hub Transport services. If you’re not on SBS and have a real Exchange setup with proper separation between your log / db / queue storage separation, make sure you take free space available on the volumes which hold your queues and your transaction logs.

Case 1: Infrequent Email Delays

Exchange clients who typically only complain about email delays during business hours, or have sporadic email delay issues are likely dealing with a low memory issue. As the server gets more and more abuse throughout the day, it is likely to exhaust all available memory and Exchange backpressure stops processing inbound mail temporarily.

When it does so, the senders are greeted with the 4.5.2 4.3.1 Insufficient System Resources error message above. The message isn’t bounced / returned, the sending mail server will attempt the delivery again in the next few minutes (depending on configuration, server software, etc). ExchangeDefender is set to pound your server every 1 minute.

Case 2: Frequent & Persistent Email Delays

This is related to the backpressure being triggered by low disk storage availability. Start nuking stuff. At best, you’ve just downloaded too much stuff and you’re physically out of space until you delete it. All mail flow will stop until you address the issue.

The more exotic event, in which you have something that temporarily stores data on your server that also holds your queues and transaction logs, find whoever hired you and have them hold your head in the toilet while they persistently flush and slam the toilet seat on your neck until you stop convulsing. Since that’s technically murder, you might have to do this on your own, make sure to put a heavy weight on a toilet seat.

The more exotic event is particularly frustrating because the delays are compounded. We had a partner whose client used the same volume for his backup jobs as well as for Exchange. At the end of the day he’d exhaust nearly all the server space, thereby shutting down Exchange – once the backups were moved to the external device the space was available again and the inbound mail resumed. Another had clients rendering software run on the server, which had a 10GB rendering scratch allocation on C:\. I’ll give you one guess where the queues were. See the toilet seat fix recommended above.

What about compounding? Well, if you have resource issues and are a heavy user of email, inbound mail itself will cause delays. There are only so many messages that Exchange hub transport can route at once so a sudden surge of mail can trigger delays all by itself.

In a nutshell

1. Don’t keep your queues and logs on the same drive.

2. If you can’t comply with #1, make sure you have a ton of ram and hard drive space.

3. Make sure to check out  Exchange 2007 Mailbox Server Role Storage Requirements Calculator: http://msexchangeteam.com/archive/2007/01/15/432207.aspx

4. If you are an MSP, and aren’t monitoring the free hard drive space on your servers if it dips below 10GB (again, Vlad’s toilet seat fix is highly recommended) at least monitor MSExchangeTransport EventId 15002.

5. For temporary relief only, turn off backpressure.

Today I’ll be joining Karl on his Cloud Services Podcast to talk a little about what has really made us successful at Own Web Now through the years. If all goes according to plan, we’ll talk a little more about the technology than business (because the business side of this is remarkably simple) when it comes to the cloud.

Here are a few concepts that are slightly more difficult to visualize so I will outline them here:

LiveArchive – Everything fails. Every time you read something covering the cloud you will undoubtedly read about stuff going down. That’s a given, there is no amount of marketing fluff that can cover it up. However, this is a problem that we solve with technology.

Each ExchangeDefender subscriber is enrolled in LiveArchive, an Exchange 2010 powered failover system that is always on. Because we scan all inbound and all outbound mail, we create a seamless copy of the message that gets delivered to our Exchange 2010 infrastructure spread across our data centers. This way when there is an emergency maintenance or downtime or a scheduled maintenance window smack in the middle of your critical business event, you can just open up a browser and open Outlook Web App from any PC or any mobile phone (yes, Microsoft has made OWA seamless across devices in 2010, no more “light” versions)

You can read more about it at ExchangeDefender LiveArchive. This feature is a part of our ExchangeDefender product, so it doesn’t matter if you have your own Exchange server or any other mail server for that matter – it will work.

Split MX Migration – There are a ton of ways to migrate between Exchange deployments – and nearly all of them suck. The Microsoft method will upload the mail from your Exchange server but once you setup your BPOS profile, it will download all that mail right back down. Other providers have different methods, all of which fail in one way or another – some only sync mail and forget about the calendars and contacts, others do it one way, some have a time restriction. Let’s face it, Exchange is an enterprise product that was not designed to be portable.

With ExchangeDefender, we have a seamless delivery protocol called Split MX Migration. You point your domains MX record at one of our ExchangeDefender servers and we simultaneously deliver mail to your old system and to the new Exchange 2010 mailboxes in our data centers. This way you don’t “lose” mail between the time you start the migration or decide to export mail… which leads me to the next component

PST Seeding – If you have a lot of users, you have a lot of mail. Uploading tons and tons of mail over a DSL or Cable connection found at most small businesses can take hours or days. It’s much easier to just dump it to a USB drive and overnight to us. What’s even more impressive is that our import speed on the server side is 7x faster than the Outlook MAPI/RPC. Can’t beat that.

Split Domains – With ExchangeDefender, you get the enterprise product. But not everyone needs an enterprise product. Or more importantly, not everyone is willing to pay for it. Well, we have two options.

For partners who have clients that need to control their costs, we can split the domain between Exchange and POP3/IMAP/Webmail/SSL hosting. The mailboxes on Exchange cost more (10 times more) than the regular mailboxes due to Microsoft licensing fees and the hardware requirements – but if the users aren’t going to be using SharePoint, Public Folders or shared calendars, should they be paying 10x more? Probably not. So we can fix that problem with Split Domains.

Some partners are washing their hands of the email infrastructure all together. We can help there too. In August of 2010, one of our partners will be launching a new Exchange 2010 offering focused on the consumer space (think Google Apps experience in self service and self management) at a far, far, far lower rate than even the BPOS. More details on that later though

FailPOP – Finally, as everything fails, sometimes ExchangeDefender LiveArchive isn’t the best solution. We’ve been involved in a ton of disaster scenarios with our partners and sometimes connectivity is an issue.

FailPOP is a built-in ExchangeDefender process that allows us to stand up a secure POP3 infrastructure in place of your existing server if you know you’ll be down for a while. This way mobile phones and laptops can be configured with a more permanent server on the Internet that allows for free collaboration without being tied to an Internet connection.

If you have any questions, please forward them to vlad@vladville.com. If you have a technical question as an Own Web Now partner, please use https://support.ownwebnow.com. If you’re not one, go to http://www.ownwebnow.com/partners and check us out.

Finally, register for Karl’s podcast http://dld.bz/k94T and listen to it free (in about ten minutes) or buy a subscription and listen to it anywhere anytime.

I recently got a challenge to build a solution that could be price comparable to what cloud storage services charge, except with the performance being key.

The challenge: You can’t build a $3 Exchange 2010 Mailbox!

Vlad: “Sure I can! Just not one you’d ever want to put data on.”

So I set out to prove myself wrong and create a PoC (proof of concept) redundant system that could do random read/writes in the very high double digit MB/Sec, possibly even triple digits. Mission accomplished, here is how I did it:

Storage Server Contents

Below is a list of components, all available as a retail package (ie, 3 year warranty when it explodes) all accessible to everyone. Due to the pricing constraints I’ve had to make some significant sacrifices (particularly with the consumer-level drives, processor and motherboard) but mostly in the areas where I wish I had server-grade components but could not justify the cost differential based on performance.

Intel Core 2 Duo E7400 2.8GHz

G.SKILL 4 GB DDR2 800 (PC2 6400)

Gigabyte GA-G31 MicroATX Intel Motherboard

SuperMicro CSE-825TQ 2U Rackmount Server Case

8x HITACHI Deskstar 2TB 7200 RPM SATA 3.0Gb/s

areca ARC-1220 PCIe x8 SATA II RAID

So to sum it up: 8x 2 TB hard drives ($149), Intel C2D Processor ($124), 4 GB DDR2 Memory ($93), Intel G31 Motherboard ($47), 2U Server Chasis with Rails ($339) and a RAID 6 SATA Controller ($454) all for the grand total of $2,249 or approximately $0.16 cents / gigabyte.

In RAID5 configuration this system delivers 14 TB of space at a bottom line cost of $0.16/GB. The overall system draws almost 2 AMPs and takes up 2U with included rack rails. It took roughly 30 minutes to put together the whole thing, most of the time having gone to taking 3.5” plastic fillers from hotswap trays.

Opinions

Before I show you the actual performance thats relevant to Exchange 2010 servers, do you have any recommendations,  suggestions or questions? Anything I could have further skimped on?

I considered Western Digital Green series, since they were significantly cheaper, but they run at 5400 RPMs and I had serious concerns about their ability to withstand a beatdown of an Exchange mailbox role. I didn’t consider any other RAID controllers and software RAID is a bit out of the question considering that every time we tried software RAID in a high performance server the motherboard melted down – also without battery in high performance situations things tend to smoke. What I wish I could find is a more efficient power supply that didn’t cost thousands of dollars.

Update: Specifically, what I’m after is if anyone out there knows how to get similar performance at a similar price/GB. Are there better controller, drives and motherboard choices?

I get this question all the time so here it is, the mythical SMTP headers.

1. Right click anywhere in the ribbon and select Customize Quick Access Toolbar. The Quick Access Toolbar are the commands immediately next to the Outlook icon in your upper left hand corner, right above the File Ribbon.

2. Select Quick Access Toolbar. Under Choose commands from select Commands Not in the Ribbon. Locate Message Options and click Add.

3. You will see the new icon in your QAT, click it for SMTP headers:

Enjoy.

What a fantastic few days it has been playing a host to the cloud of MSP providers the ConnectWise and HTG conferences have brought to Orlando. I have three quick thoughts I have to share with you all, but given the extent of NDAs and confidentiality agreements I have to be a bit vague:

1. Thank you all for coming to Orlando. Having spent most of the time in hotels and on the road (vs. my new house) I am truly glad that I can drive ten minutes back to Windermere and just sink into my own bed.

2. It’s tough out there for a pimp. Most of the owners and managers I’ve been talking to are not doing well. As a matter of fact, a few percentage points of growth seem to be good news. Sales of hardware are down. Adoption of managed services is down. Overall climate seems to be decidedly down. People are making money but they want more. That’s capitalism.

3. Our new pitch of “cloud direct” is going well. The “ExchangeDefender 75 Cent Cut Throat Special” has been amazingly received by everyone I’ve talked to and the market share we will gain on the back of this is amazing. We are really going all out here because even a blind man sees the end of this tunnel: everything shall soon be free. That’s not good news for people that had hoped to make money selling software but the true definition of a business success is in the amount of the profits it generates, not how it goes about doing so (within law and reason of course).

The conversations I’ve had today, even with the rabid fans of other products, makes it clear that business people make business decisions. They don’t buy it on personal intangibles over how much they like the guy, we’re not Hannah Montana fans running around with glitter in our hair – bottom line is.. well.. what contributes to that bottom line. Profits.

And as I said in the previous post – game on folks. This isn’t the IT sector of the 90’s or 2000’s, fighting for every dollar and every penny is going to get harder. It’s your call whether you’re going to do it, or watch from the sidelines as others take it all over. Not sure what you’re going to be doing but I’m not stopping. Google isn’t stopping. Microsoft isn’t stopping. Yahoo isn’t stopping. Opportunity is yours for the taking.

One thing I heard the most this week: “Well, I’d love to work with you on that” when talking about the direct model. Looks like all the partner feedback built something good, eh? We’ll be at CW and HTG all week, track me or Shannon down and find out what it means for you.