hostopia, political spin or lying?

I would appreciate hearing fellow hosts opinions about; Hostopia's non-competetion statements on their website, are they (1)flagrant lies or (2)politcal spins on the truth.

-Hostopia.com(Wholesale); owns, operates and actively markets their retail site "Bluegenesis.com".
I am sure most of you have seen their advertisments (Hot Construction Girl with tools).

-Prices on Bluegensis.com are less than Hostopia's recommenned MINIMUM retail prices.

Hostopia states on their website:

(a)
"Hostopia.com is not an ISP
We will never compete against you.
There is no need to fear being at the mercy of a competitor who is both a technology provider and has access to many aspects of your company's operational, technological, and marketing strategies.
Hostopia.com's unique "Risk/Reward" pricing strategy and financial partnerships mean that our success is directly contingent upon the success of our partners. We only succeed when our customers succeed. "
http://www.hostopia.com/presence.phtml

(b)
"Competition
Unlike our competitors, our core business is wholesale web hosting. We maintain a limited retail laboratory for research and development purposes only. This means that we will not compete against Hostopian partners for their end customers!"
http://www.hostopia.com/what.phtml

Why does Hostopia not openly disclose the fact that it operates its own discount host company.

I know Opensrs also owns and operates domaindirect.com but at least they charge the maximum prices they can; to be fair to their reseller customers.

I would say a little of each... Just my personal opinion.

On the same note, I know other of another large private label reseller host that run not one but up to three of their own hosting companies too. It just seems to make business sense when you can sell the product to yourself at a discounted rate.

There is nothing unethical about it, but they are competing against their own customers. I guess it all depends on the marketing spiel, I don't think there is anything wrong with it as long as you are not hiding it.

Nice poll - Should they be shot or hanged?

Maybe there is a good reason for the competition.

Who knows

Well, wouldn't "We maintain a limited retail laboratory for research" mean that they do in fact offer other hosting?

*Note: Didn't vote because . . . . . . well it just doesn't seem in good flavor.

I looked at the pricing and for the most part it seems they aren't going below their own minimum recommended pricing (which by the way means very little), though if paid yearly, there is sometimes a $1-$5 of a discount below that suggested price. As I said, really it is meaningless (just a suggested number they posted).

As for not competing against you, some could take that to mean that they do not contact your customers and try to sell direct to them, or try to sell them other services. I'm just bringing up some other points, not trying to discredit your opinions or points.

Wow!

Talk about a conversation getting out of hand.

I hesitated to respond originally to "pc0l" because I generally do not respond to anonymous posters. Although he claimed to be my customer, he could just as easily be a competitor up to mischief so I was afraid to give credence to what could be a questionable source.

However, as usual I am compelled to offer a response. My goal is not to hurt anyone's feelings or put a spin on anything as that goes against our corporate and my ethical standards.

First off, being called a liar is not the ideal starting point for a civil conversation, however, I accept that perhaps emotions are running high on my customer's end. I ask a simple question: If you are so unhappy with the situation, why not pick up the phone and call me?

For the record, if anyone does want to speak with me they can call me directly at 416.234.7608.

Now on to the business at hand.

For those that don't care, there is no need to read beyond this point, however, if you are a customer or potential customer this info is for you.

First off, most if not all of our Hostopians know about BG before they sign on-board with our services, and once they understand the reasons behind why it exists, they usually set aside all their reservations about it.

Why does BlueGenesis exist?

BG is our live Research and Development Laboratory and has been responsible for developing and testing all of our phenomenal technical innovations, as well as providing us with a live marketing and business practise to help our customers to learn the techniques to sell more websites.

BG is the guinea pig for all new product innovations, and as a consequence, it has to deal with all of the potential problems that arise from releasing a new software or technical application for the first time in a live environment. This means that before we ever release a solution to our wholesale partners they can be confident in knowing that the solution is virtually bullet-proof, and consequently, they won't get bombarded with technical support calls for an issue beyond their control. This is why about 99% of our Hostopian product launches are bug free.

As far as the business end is concerned, BG has enabled us to build out our Business Success Practise which provides customers with proven marketing tools and concepts to help them sell more business. For example, we know from experience both ours and our partners that approximately 15% of parked domains will eventually buy hosting services and up to 40% will buy some form of web service (email, forwarding, etc). So therefore we recommend that everyone of our partners sell domains to build inventory. This is just one of many ideas we share with our partners that come from the invaluable experience of running a company.

Who would you rather work with: a doctor who has performed 100 brain surgeries or the doctor fresh out of college who has only read about it?

On the issue of materiality of the BG business, aside from the fact that most people have never heard of it, it represents a very small portion of our hosted domains. Less than 3500 out of over 150,000 or about 2.5%. When I started the company this percentage was in excess of 90%, so clearly we have held true to our vision of becoming the world's premier wholesale hosting company. Based upon current projections this will fall to less than 1% during our current fiscal period.

The real competition out there isn't BG it's Verio, Interland, XO, and everyone else. BG is a small fish in a huge pond.

As far as competing with partners, as others have correctly noted we do not undercut our partners, rather we have found that some of our partners sell for a lot more than BG does and others for a lot less. It all depends upon their brand strength and their positioning in the market.

Most of our customers sell access services and BG does not, and never will, while it is a part of Hostopia. This is the more important issue to our partners and frankly is the reason we say we don't compete, unlike all the other so-called wholesalers like Verio, XO, Interland, etc.

In fact, we have a stated policy that says we will withdraw our advertising from any venue in which a Hostopian wants to do their own advertising and marketing. To date we have done this on numerous occasions and will continue to do so.

I hope that addresses everyone's concerns.

Thank you very much for the opportunity to share this with you.

Regards,
Franc