“How’s your hosting business doing in the economic downturn?”

Everyone is asking me this question lately. It’s understandable as the economic meltdown is reaching every part of the globe.

To see the impact of the current economic situation, we plotted the daily close of the Dow and NASDAQ against our daily sales for about a 5.5 week period (9/2/2008-10/13/2008), which covers the time we saw the worst drop in the market. Here are the resulting plots. We took out the actual sales number scale from the Y-axis and the bottom of the sales scale is not zero.

In general, our sales are following the recent major drops in the market and you can see a trend downward in the sales averages. However, we also see an upswing in sales with the rise in the market as well.

So, are we going down in flames? No, not at all. We may expect growth to be a little slower but we will ride this out and our business will be fine. And Microsoft is rapidly moving forward with more innovation. They just released Silverlight 2.0, for example. There is a lot of excitement among the ASP.NET developer community for all the new technologies that are on the horizon. I believe that we are in a hosting niche with a lot of potential.

Internally, we will review all our projects, pipelines, and budgets and maybe do some reprioritization, but this strategy review is something we do at the end of the every year anyway.

I can assure you that one of our top priorities will be to continue to innovate on top of the Windows stack. We will not slow down there. We just launched a new suite of FTP management tools for the Windows 2008 platform this week and we have some other very cool stuff in the works, which you will be hearing about soon.

Takeshi Eto
VP Marketing and Business Development

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