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  1. #1
    Join Date
    Dec 2011
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    Netherlands
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    Best way to take over another hosting company

    Hi WHT,

    We're in the process of taking over another hosting business here in Europe.

    This is first time we're acquiring another business, so would love to get some tips/tricks from experienced people.

    So my questions to you guys:
    - What should we be aware of? We know we need to check assets, if they have any debt, or any legal problems.
    - Should we only take over the infrastructure (for a short period of time), and the clients, and leave out the company itself.
    - Is it best to take over the company from 01/01/2014 (New financial year).
    - What do you do with customers that already paid lets say, for the next 11 months of hosting.

    And what about pricing?

    We're a high performance web host, and the one we're buying is a low-cost host, should we run it as the old name, and keep doing that, or should we migrate all to our own brand.

    We know if we increase the prices to our standard, we'll lose a lot of customers, which we don't want to do, but since the business is bought, what amount would be fair to raise, with the take over (We'll provide better support, stability, and performance).

    Is there any other things we need to be aware of, or tips from guys that have done this before.

    Additional information:
    - We're high performance, meaning 60 hosting packages (max) per server (32gigs mem, 8 cores), currently with a total of ~110 packages
    - They're low cost, around 2000 packages on 2 dedicated servers
    - Our servers is located in NL, their servers is located in UK

    Thanks in advance for all the help/tips we might get!

  2. #2
    Join Date
    May 2013
    Location
    USA
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    928
    Quote Originally Posted by Hosting4Real View Post
    We know if we increase the prices to our standard, we'll lose a lot of customers, which we don't want to do, but since the business is bought, what amount would be fair to raise, with the take over (We'll provide better support, stability, and performance).

    Don't raise prices. Not for a long long time. The last thing you want to do is rock the boat immediately after you've bought a hosting company.

    If possible, I'd recommend using the old hosts servers, support systems, billing control panel, etc for a couple months and then gradually begin to migrate customers over to your systems.

    If you notify all of the new customers that their host has been bought, you're raising prices, moving them to another server, new customer portal, etc some customers will panic and they'll be likely to move elsewhere.
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  3. #3
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    if you can avoid (or delay) forced nameserver changes, I think that would help.
    Sneaky Little Hobbitses

  4. #4
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    Quote Originally Posted by BrianHarrison View Post
    Don't raise prices. Not for a long long time. The last thing you want to do is rock the boat immediately after you've bought a hosting company.

    If possible, I'd recommend using the old hosts servers, support systems, billing control panel, etc for a couple months and then gradually begin to migrate customers over to your systems.

    If you notify all of the new customers that their host has been bought, you're raising prices, moving them to another server, new customer portal, etc some customers will panic and they'll be likely to move elsewhere.
    The prices make sense, so I'll stick to the prices for a long time.
    I'll keep using the support system/billing system (WHMCS), I might keep the servers running on the old provider for 4-5 months, and do a slow migration process.

    Only thing that would change would be the actual IP address of the server, and the location for sure, other things could be kept intact.

    Quote Originally Posted by CD Burnt View Post
    if you can avoid forcing nameserver changes, I think that would help.

    or delay nameserver changes for a few months, so there aren't so many changes at the same time.
    The only nameserver change I would make, is actually moving the infrastructure, but keep using the old nameservers and domain.

    Thanks to both of you for the reply!

  5. #5
    Gradually move the new customers over. Send an email out when you buy it and tell them you're moving it all over in the next 6 months. Also have new customers run through your main company not the old one. Basically close new sales, but only keep the old customers on that host.

  6. #6
    Join Date
    Dec 2011
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    Netherlands
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    Thanks for the replies, is there anything, legally I should keep in mind, other than only taking over the customers and servers?

    Only if anyone knows good tips from a legal/business perspective, and not technical perspective.

    Thanks in advance!

  7. #7
    Let your customers know ASAP, and remind them that other than the name, nothing will change for the worse (which shouldn't be the case)--i.e., pricing will not be affected, current services will not be removed, etc. Don't change the price, especially since they are higher, for quite sometime, and once you do, make sure its gradual.
    Nividium
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  8. #8
    Join Date
    Apr 2011
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    Quote Originally Posted by Hosting4Real View Post
    This is first time we're acquiring another business, so would love to get some tips/tricks from experienced people.
    Run through the front door of the host your buying yelling crazy talk. Speeds up the paper work!


    Quote Originally Posted by BrianHarrison View Post
    If possible, I'd recommend using the old hosts servers, support systems, billing control panel, etc for a couple months and then gradually begin to migrate customers over to your systems.

    If you notify all of the new customers that their host has been bought, you're raising prices, moving them to another server, new customer portal, etc some customers will panic and they'll be likely to move elsewhere.
    Key points right there...and the best way to improve, learn from others mistakes. If and when it comes time for migrations, make sure it's as seamless as possible. The last thing you need is to tarnish the old and current company name.

  9. #9
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    Dec 2011
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    Netherlands
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    Thanks both of you, for the reply.

    We'll actually take over the domains as well, this means even the name will be kept the same. Only difference, is that the registration number, and the people behind it will change, and when looking from a company perspective, the company just got acquired!

    The reason why we want to do the server migration, is first of all, because using our current datacenter that we use for our current company, has good pricing, we know how the datacenter handle issues etc.

    Currently the servers used in the other company, is located in UK, and the network and service, from their experience, haven't been the best, and that's the main reason why we want to migrate the clients, to bring a more stable product.

    Surely, it will happen over quite some time to make sure everything is migrated with the least downtime (or no downtime at all).

    Thanks again for the replies!

  10. #10
    Join Date
    Apr 2009
    Location
    New York City
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    5,054
    When buying another company or clients you have to take things smooth and slow. Do not rush anything because one mistake and you can lose all the clients you've bought. Also take that advice and yea keep their name and billing / support department up and running for those clients. For the new set of clients that are to come in the future have them sign up on your business not the one you are purchasing. Also keep prices the same you don't want to raise them and scare your clients away. Just if anything you can keep those clients your buying on the same plan their on for what they are paying and offer different newer plans to your newer sign ups

  11. #11
    Join Date
    Dec 2013
    Location
    Sydney, Australia
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    The way I've done it is like this:

    Start off by notifying all clients and give them 2 weeks notice before you continue doing things (unless SLA's state otherwise).

    Manually (and slowly) migrate them to your billing system using existing emails, including their orders, and keep the existing plans as legacy plans. Disable registration on the old billing system, and set up a redirect/notification for people trying to register. Don't publicise the old plans anymore.

    Notify clients that they've been migrated to the new billing system, and to reset their password. Also notify them that after 6 months their legacy plans will no longer apply, and they'll be required to upgrade.

    A good way to do this is to notify them of new features, etc, that they get for upgrading. Offer discounts on your existing plans (half price off for the first 2 months) - things like that.

    Use existing servers unless it's going to make you lose a lot of money.

    This is how I've done it in the past, it's gone quite smoothly.

    Let us know how you go with the transition! Good luck!

  12. #12
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    Quote Originally Posted by mark_hughes View Post
    Manually (and slowly) migrate them to your billing system using existing emails, including their orders, and keep the existing plans as legacy plans. Disable registration on the old billing system, and set up a redirect/notification for people trying to register. Don't publicise the old plans anymore.

    Use existing servers unless it's going to make you lose a lot of money.

    Let us know how you go with the transition! Good luck!
    Thank you a lot Mark,

    We'll make a complete dump of their current billing system, and take it over into our own (separate from our current), since it will be run as 2 separate accounting systems, different invoice numbers etc.

    The reason why we want to migrate clients from current servers to same datacenter as we use now, is because of multiple things, such as pricing, we'll get better prices, network has a higher uptime, and is more stable (And faster), we know the guys we use now, and decided to go with that datacenter for very specific reasons.

    So not only we'll save money, but it will save us a lot of time, and most importantly, network is both faster and more stable, when looking at the target customers.
    Sure we can make the migration happen over x months, but we'll be able to provide a more stable service by migrating.

    The migration will be planned into detail, to minimize the downtime (if possible even no downtime).

  13. #13
    Join Date
    Dec 2013
    Location
    Sydney, Australia
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    15
    Quote Originally Posted by Hosting4Real View Post
    Thank you a lot Mark,

    We'll make a complete dump of their current billing system, and take it over into our own (separate from our current), since it will be run as 2 separate accounting systems, different invoice numbers etc.

    The reason why we want to migrate clients from current servers to same datacenter as we use now, is because of multiple things, such as pricing, we'll get better prices, network has a higher uptime, and is more stable (And faster), we know the guys we use now, and decided to go with that datacenter for very specific reasons.

    So not only we'll save money, but it will save us a lot of time, and most importantly, network is both faster and more stable, when looking at the target customers.
    Sure we can make the migration happen over x months, but we'll be able to provide a more stable service by migrating.

    The migration will be planned into detail, to minimize the downtime (if possible even no downtime).
    Sounds excellent then! I hope all goes well.

    By the sound of it, your new customers will love the service you're going to provide to them.

  14. #14
    Join Date
    Dec 2013
    Location
    England
    Posts
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    My biggest piece of advice is to move slowly, and be nice to your old customers. The worst think for a customer is hearing that your site is being moved. They will probably panic if they feel they are forced into moving and might not continue, especially if the prices are going up.
    It would be great if you could tell them all the benefits of moving, but also highlight that they don't need to worry and that you will fix any problems which happen in the transfer.
    Also make sure they are aware that they can talk to you in the transfer process.

    Good luck!

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