Build vs. Buy

At Parallels Summit 2009 a couple weeks ago, one of the themes for presentations given by Parallels staff was around the concept of “Build vs. Buy.” In their presentations, as you would expect, their company’s take was that hosts should not waste time and resources building systems but rather buy/license Parallels products. They cited reasons like speed to market, focusing on core competencies, focusing on providing customer service and solutions, etc. instead of a host embarking on software development.

Whether to “build or buy” is one of the important decisions that a hosting provider must make for how they run their business.

Back in the day, a host had to build everything since there were no other options. But as the hosting industry matured, you saw a rise in the number of software vendors who developed off-the-shelf hosting automation and control panel systems. This in turn lowered the barrier to entry into the hosting business, thus making the number of hosts explode. Dedicated server companies also started selling pre-installed hosting automation software on their dedicated boxes, essentially selling a “hosting-in-a-box” solution for hosting entrepreneurs. Add third party transaction vendors to the mix, and the barrier to entry into the hosting business is reduced big time.

But despite all the logical and compelling list of reasons for “buying” a hosting solution, at DiscountASP.NET, we chose to build our own hosting automation system and control panel. Why?

From the outset, our hosting business plan was to be an early adopter of new Microsoft technologies and focus on innovating within the Windows shared hosting niche. We bet early on ASP.NET and Windows 2003. If we were to demonstrate that our team were ASP.NET experts, we felt is was important to run our business on ASP.NET technology and offer a control panel built with ASP.NET. And at that time, there were no viable off-the-shelf ASP.NET hosting control panels on the market.

We also believed that if we wanted to launch new Microsoft technologies quickly, we should not depend on a third party to perform our product development for us. While these third party vendors are certainly capable, they are focused on their product development as it pertains to ALL their hosting provider customers and possibly other partners (ISVs, Direct SME customers..etc.). So it is possible that these vendors will have different goals and different product pipeline plans than what we are trying to accomplish with our niched hosting business. We wanted control over our product development to execute on our business plan.

It is challenging, but we have no regrets about having “built” our own hosting system and control panel. We made a commitment to continuous investment into R&D and innovation and I believe that we are delivering on this effort.

Takeshi Eto
VP Marketing and Business Development

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