NetMart.Com Looks Forward to Continued Success in Hosting and E-commerce

It’s 1994 - a business idea is born at a local pub - an idea that takes advantage of the dot.com craze brewing on the horizon, and builds the foundation for a successful hosting and E-commerce company called NetMart.Com.

An Idea Is Born

It’s 1994 - the Internet is in its infancy stage and the dot.com craze is on the horizon. A couple of friends are enjoying a few pints at a local pub, fresh out of University and looking forward to a bright future. It is here where a business idea is born – an idea that forms the foundation for a successful company called NetMart.Com.

Beginning with a mere $15,000 in capital, and built in a home basement, NetMart.Com is a successful hosting and E-commerce company with two-office locations - one in Florida and one in Montreal, serving thousands of customers. Approximately 80 percent of the company’s business is from the United States, 10 percent of its clients are from Canada and the remaining 10 percent represent customers in regions such as Saudi Arabia, Jordan, Italy, Israel, France, and the United Kingdom.

In The Beginning

In its early stages, NetMart.Com’s focus was in hosting. Its success in this area initiated a move into a co-location facility with UUNet in 1997. As the business expanded, it became difficult maintaining control over its servers.

Jack Edery, co-founder of NetMart.Com says, “We moved to a co-located facility and then started to find that the co-located facility didn’t really give us the ability to have direct access to the machines, so then we moved to the regional AT&T Network Operations Centre. We are the only non AT&T personnel in the building. We got our own offices here, our own machines and our own facilities so we could have direct control over the network. We wanted more control, faster connections, and a more affordable solution. Plus, there were just too many machines at that point to stick them in a co-located facility.”

Using AT&T’s centre provides the company with advantages that spread to its customers. Edery comments, “We have the advantage of being in a tier one facility that basically runs all AT&T’s operation in this area. We have an unlimited, direct connection to the AT&T backbone two stories below us. They have spent lots of money to build this centre to be a very secure location. We get the benefits of what they spend without having to spend the money ourselves….and we have the advantage to offer this security at prices that are low because we don’t actually have to pay for this. We didn’t build it -we just use it.”

With its hosting business going strong, NetMart.Com soon began to offer E-commerce services. The company found that many of its clients were looking for development services in addition to hosting. As a result, the company worked with clients to “build, host and manage the application for them.”

Hosting And E-commerce Challenges

According to Edery, one of the biggest challenges in hosting and E-commerce is customer demand. He comments that customer demand has an effect on the systems they offer and equipment they use.

Edery states, “The consumer is constantly demanding new applications, more bandwidth, more speed, more reliability and more space. A couple of years ago, even one gig of space was insane. Back then we would have had to string together five machines to give them that. People are asking you to be hosted on a 1.6 gigahertz processor - people are asking for dual processors, which a few years ago wasn’t even available.”

This customer demand is supplemented by the fact that consumers are more knowledgeable. From Edery’s perspective, this is a good thing. He says, “We don’t have to explain difference in quality to somebody. A lot of people we deal with are programmers, and some are web site designers.”

The Economy And Its Impact

With the downturn in the information technology sector it is difficult to ignore the potential impact on the hosting and E-commerce industries. According to Edery, “The dot.com craze is over but the dot.com industry is alive and well.”

He states, “The dot.com crash is more about the ‘hype’ companies than the ‘real’ companies. I think there was a shakeout between what the real companies did and the hype companies did. Hype companies raised IPO money, spent it like it was going out of style…without the possibility of a return. The real companies kept in mind what the business models were and grew in a steady and constant manner. And they kept in mind that they had to stay profitable and that they had to spend less than they were making. That’s what we stuck to.”

Furthermore, Edery believes the hosting industry is not greatly affected by the downturn in the economy. According to Edery, “Hosting is the consistent client base - you build a client base, you keep clients happy and they keep coming back. It keeps growing. I think the last thing to go is hosting. Hosting is a lower cost element and a last line element. Companies are more likely to cancel their online advertising and updates to the site before they cancel their web hosting. From NetMart.Com’s perspective, it’s very non-human intense. Once we’ve built the system, we can add another three thousand clients without having to worry about staffing problems.”

Opportunities In Hosting And E-commerce

In the past, fancy web pages and applications were the norm. According to Edery, these times are gone.

“People are getting back to basics, as far as development and hosting is concerned. They say ‘I don’t want anything flashy, I just want something that showcases my products and allows me to sell.’ They’re not looking for a lot of bells and whistles - people want quality, they want clarity and they want it all for a reasonable price. People are more likely to spend if it affects their bottom line.”

A Competitive Advantage

NetMart.Com offers a number of competitive advantages to its customers. As a company that has been around for almost ten years, Edery states, “Experience is something that sets us apart. We’ve been around for a long time, we’re not a fly by night operation.”

From a hosting standpoint, the company offers both high-end and low-end solutions. Edery says, “We have a no limit hosting package for only $ 9.95/month. We will give you what you need without any pre-set bandwidth, no pre-set drive space limitations and all the software you need to do your development.”

Moreover, Edery continues, “Another thing that we do is we have a unique program for a dedicated hard drive, so customers purchase a hard drive, whatever kind they want and the client can put as much or as little data as he or she wants on that hard drive for only $49/month. It’s a shared machine but a dedicated hard drive where they can load up on whatever they want. It’s very popular because it gives the client a lot of space but at a cost much lower than that of a dedicated machine.”

Strategy

NetMart.Com’s success is also a reflection of how the company operates. It is a private company that grows steadily and slowly, enabling it to save money and make a profit. Edery says, “We are run very efficiently - we run a very tight ship. Because the money we spend is our money, not investors’ money.”

In addition, the business also focuses on cutting edge, large-scale projects. Edery comments, “We deal with small web sites – but we prefer to create something that is new – we build and push the limits of the envelope.”