The second dumbest thing I ever did

ExchangeDefender, IT Business
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One of the biggest failures you can have as a software business is not offering a product that the market demands. This is quite possibly one of my biggest mistakes and I’ve written and deleted thousands of words in this blog post to sum it up simply with: I was wrong. It was stupid not to offer an affordable product. But fixin’ stupid is what I do:


We have been offering ExchangeDefender since roughly 2001 and we’ve kept a pretty simple goal in mind: keep the users secure. My mistake was in the difference between the users and the business owners. Users are stupid, they will click on anything that comes into their email, provide sensitive/private information to a complete stranger and at times demand to be placed in danger (“I absolutely must receive .exe attachments, we ship everything through UPS and they would never send me anything dangerous!”). Users need a shutgun when they could be easily defended with a toothpick. Business decision makers, however, only consider business factors and try to guesstimate the cost of a security breach and data loss based on prior experience (which is typically none as most companies without a security plan tend to be gone within a few months of the catastrophic loss).

For years I refused to compromise on the price and features, for years I had one product and that one product was at times more expensive than the market competitors although the depth of the offering was far greater – but in realistic terms only the invoice amounts matter.

Last year, after we have gone through our growth pains, I approved the creation of ExchangeDefender Essentials and licensing of our technology (primarily through CloudBlock).

We built a good product that matched base offerings in the marketplace – spam filtering, virus protection, 1 week of realtime email archiving and business continuity, DDoS protection, partner branding and so on – and absolutely crushed our competitors on the price – At $0.50 per user per month it’s by far the most affordable mature email security solution.

This brings me to the other thing I was wrong about.. I assumed this would be a sideshow product that would only appeal to budget conscious providers that did not want to profit from ExchangeDefender’s immense solution stack. Wrong again. It’s the most popular product we have today. While this is in part due to our partners migrating from other solutions, it’s also the reality that marketplace is always right – people would rather buy what they want than what they need. I confused the two and I’m sorry.


Revisionist history – While I do wish I wasn’t stupid.. live and learn. Looking back though, we couldn’t have provided this product years ago. Not with the level of infrastructure, not with the product maturity, not with the technology we had at our disposal and certainly not with the organization as it was structured back then. Today, we do. What’s even more relevant is that this is the first and only product that anyone can buy at any time for whatever purpose directly at – and we’ll even help support it over the phone, web, support portal and live chat.. around the clock. With reduced complexity come easier deployments, with easier deployments comes less support and when my partners looked at Essentials, they looked at something they did not want to be on hook to bill or manage.

Fragmentation – So now that anyone can purchase ExchangeDefender Essentials, how soon are Exchange + SharePoint, Offsite Backups and Web Hosting coming along? They aren’t. We have a phenomenal amount of data on who sells what and how – thanks to Shockey Monkey and our ridiculously successful partner program. I think the MSP and VAR community is at an interesting injunction. You can either sell a commodity product and make it up on the volume or associated sales or you can make a killing on an implementation.

When I talk to partners I always ask this question: Are you making money with our stuff?

If the answer is no then why are you doing it? If the answer is yes, pimp on player. Pimp on. Because here is what I know about my partners – nobody charges less than $5/month for ExchangeDefender and most make far more when they integrate things along with it. Don’t forget that ExchangeDefender comes with web filtering, web file sharing, encryption, and a year worth of business archiving. Top that off with compliance archiving for 10 years (at under $4 a month) and you can pull revenues off the flat fee product in dozens of ways. I have partners that have built entire business lines off what we do and storage and social enhancements we’re building into the product are going to knock your socks off this year!

The biggest development in 2011 is flexibility – can you offer multiple things at multiple price points and make money? You can no longer go to clients and offer them ultimatums. You need partners that give you the edge.

To those of you reading this, I hope you choose us as we’re undoubtedly giving you plenty of options on how to best reach the massive marketplace out there that may not fit a simple filter. I have built the company on the premise that you can have any color you want so long as it’s black. Now we’re adding a rainbow.

The game of IT monopoly is picking up and large manufacturers and software companies are done with buying properties – now they are buying houses and hotels and patents and SonicWall’s and MSPs. You have to make a decision now if you’re going to walk away from your business for 3 months of rolling revenues or build something that can sustain itself for years.

Take it from my stupidity – and luck – even when you’re wrong you do get rewarded for making the right choice in the end.