AlexJoin Wowrack’s Director of Cloud Strategy, Ed Kimm, as he reflects upon the latest sales initiatives and future goals for the team at Wowrack. Make sure to stop by Chris Carlson’s page to listen to his podcast series: The Sound of Business.
Chris Carlson: Hi, this is Chris Carlson and welcome to episode number seven of the Sound of Business Podcast. My guest today is Ed Kimm. Ed is partner and Chief Revenue Officer of Wowrack. Wowrack is a global cloud service provider offering various hosting solutions including managed hosting solutions, dedicated service solutions, colocation, virtualization, bandwidth delivery, and managed services. Hey Ed, thanks for joining me today!
Ed Kimm: Hey Chris, thank you so much, I appreciate it.
Chris Carlson: Hey Ed, we’re going to take a deep-dive into Wowrack, but before we do, can you give us a brief background of Ed Kimm?
Ed Kimm: Sure. So I was actually probably one of the very few, compared to many of the listeners out there that was born and raised in Seattle, Washington. My folks are actually from overseas. My dad was born in Seoul and my mother was born in Tokyo, Japan so that makes me second generation. I’ve been lucky enough to travel there, but for the most part speak the languages and obviously I’m very fluent in English. In terms of my history in IT and where I am at Wowrack, I’ve been in IT since about 1998. So quite some time. Really started out more in the simple hosting Telecoast space and really evolved from there to more of the enterprise MSP cloud strategy.
Chris Carlson: Tell me a little about Wowrack?
Ed Kimm: Sure. So Wowrack’s been around since 2001 and in short, we really go by the mission that one cloud or hosted technology environment for businesses isn’t for everybody. You know, Wowrack is not the best fit for all organizations and neither is Microsoft Azure or AWS Amazon for that matter. So given that, we actually are a hybrid cloud architect and solutions company where we go in, deep-dive with the technical folks of any given organization and help them architect and strategize the right and proper hybrid cloud strategy based on their specific needs. That could be security needs, regulatory compliances that could be sovereignty in terms of where they are in the globe, that could be budget, but most importantly that should always be based off of a workload application and really what their business drivers are and what their application does and how it serves their users.
"We really go by the mission that one cloud or hosted technology environment for businesses isn’t for everybody."
Ed Kimm: Once we get there, we architect multiple hybrid cloud solutions under Wowrack’s arm. That could mean community cloud, that could be a public cloud that could mean a private cloud that could also mean a CapEx colo where companies still want to maintain hardware or whether they want to rent hardware from a company like Wowrack on-demand. And that could still look like, believe it or not, people keeping things on-premise or keeping things off-premise or a combination of each and every one of those things. So, based on all of those requirements, once we actually define which direction companies want to go, architecturally and cloud-speaking, we then help them design and architect and set it up or deploy in our arena and fully manage it either as a fully managed service, co-managed service, or if the customer still wants full access or root access to the systems and manage it themselves, not a problem.
Ed Kimm: So we offer a really flexible and what I feel a very nimble, in the industry, cloud hosted environment where customers can pick and choose what exactly is the best and right fit, given their budget as well as have the opportunity to outsource all the overhead and IT headaches to a company like Wowrack to either fully manage it or do it on an on-demand ad-hoc basis.
Chris Carlson: What was the genesis of Wowrack?
Ed Kimm: Yeah so when the company started back in 2001 it was really started as a simple hosting company, I can’t really give you a fancy answer. Really it’s just as simple as that. We just had a desire to be able to host customers, whether it be in a shared hosted space for five, fifteen, ten dollar-per-month type hosted environments. This included just simple websites, gamers, etcetera. And that really was the premise of it all, but then it really evolved into “Hey do you guys actually own your own data center?” then we moved into our own facility to provide hosted services for people who own their own hardware. And as everyone knows technology changes by the day or minute literally and there was a huge IT bubble and then it burst and then there was a big bubble again and early cloud kind of has evolved through that whole evolution and we went from just a small hosting company to really costs based on customer demand to more of an enterprise MSP.
Ed Kimm: What we’re really providing like I shared earlier of a hybrid cloud strategy, but specifically towards bare metal private virtualized single tenant cloud environments where we manage it, we set up a fully automated disaster recovery solutions so we can help people store and recover and retrieve data on-demand. We also have a huge now, cyber security practice to help organizations pinpoint and prevent any type of ransomware or malware or cyber security breaches, because that as you know is huge in this day and age, no matter what kind of organization, specifically in healthcare and finance sectors. So these are some of the areas that we really have a lot of expertise and breadth of support in.
Chris Carlson: What was the biggest challenge that you had when the company first started?
Ed Kimm: The biggest challenge was probably financing. I have to give—so one of our primary owners/ partners, Jimmy [Pandra], he deserves credit to him and his family because they helped our company in terms of financing a lot of our dreams in making this whole company and cloud strategy a reality. So they helped finance a lot of family equity and private funding and we have some other friends and family who have actually contributed to our growth as well as like any business we’ve differed and often times did not pay ourselves just to be able to grow the company and we worked with a few banks to be able to secure some SPLs and loans.
Chris Carlson: When people think of Wowrack, what comes to mind?
Ed Kimm: That’s a great question! Maybe I can answer that in two ways. One, I think what people think is that we’re just a hosting colo[cation] company. What I would hope they would think when they hear of us is really more of an enterprise hybrid cloud, compute, storage, and managed services provider. I know that’s kind of long-winded but in terms of hosting, there’s a lot of hosting providers in this region and just globally, in fact. Especially in Seattle, we’re the cloud capital of the world with Microsoft and Amazon in our backyard. But really, the only way we can remain competitive and net-profitable and really add certain value of niche products to this cloud and hosted landscape so that’s why I kind of mentioned that earlier is that we’re more of a specific niche provider because we really believe that everyone has specific architectural needs when it comes to their IT pain points and goals. So we actually pinpoint what those goals are and within our skillset and what we’re really good at doing at our core is supporting that hybrid infrastructure and architectural way and designing it, and supporting it moving forward for companies.
Chris Carlson: You mention Seattle being the cloud capital of the world. What is the competitive landscape look like for Wowrack?
Ed Kimm: So depending on who you ask that that could be relative, but if you’re asking me it's super competitive. Amazon, for example, is the 800-pound gorilla in the world. They’re clearly the best and the biggest in terms of multi-tenant public cloud IaaS (Infrastrucure as a Service) offering that you can get. They’re really great at it, but that’s really all they focus on and that’s all they do. When it comes to companies like Wowrack and how we remain competitive is just providing more value-added management, close hand-held core services, while designing custom ad-hoc cloud architectures really contingent on a given enterprise. For example, Amazon or even Azure and Google, they don’t come to you, Chris Carlson, and say “I’m going to design a cloud strategy, just for Chris Carlson.” They have great packages, but organizations have to take it or leave it. But companies like Wowrack, we actually design, as long as it fits within our sweet spot, a cloud strategy and a specific customized architecture for those given organizations, keeping in mind of their applications, workload needs, and their budget.
"In short, they’re going to Dell.com and building and designing their own laptop right? That’s how granular we get when it comes to the Enterprise."
Chris Carlson: I love that analogy. Well, is there such a thing as a typical client for Wowrack?
Ed Kimm: Yes, for companies that are looking for huge RPTO or disaster recovery and restore requirements. They need someone like us to be able to help offload some of their backup and storage needs from either if their on-prem, from their current data center or wherever they may be to a Wowrack facility globally. We have seven data centers worldwide today. The other instances that we can provide is securing data for organizations with our SaaS-based (Software as a Solution) cryptographic bit-splitting solution. There is a lot of different services we do offer but specifically DRaaS (Disaster Recovery as a Service), storage. Companies that need a tremendous amount of backup. High availability companies that need a tremendous amount of storage and compute IO and redundancies for their network and for their applications.
Ed Kimm: Companies that need high availability and compute because they have huge processing requirements and those companies actually that have hardware or want to rent hardware in a hybrid solution, so Wowrack is a great fit for companies who want to be able to still use their given hardware, putting it into one of our data center facilities, and also rent to some compliment, their older hardware on-demand. So we’re one of the very few companies that can actually offer a CapEx, you can provide your hardware, with an OpEx, you can call Hardware as a Service model and combine it into one homogeneous environment and manage it for their enterprise whether we own the hardware or not. That’s one of the clear value-adds and differentiators of Wowrack versus like an Amazon or Azure or most other hosting providers.
Chris Carlson: You certainly have lots of offerings. What’s your go-to-market strategy?
Ed Kimm: Go-to-market strategy is another great question, Chris. Number one, we’re trying to increase our hybridization so we can allow customers to freely move workloads on-demand anytime, anywhere, anyplace. We have a lot of confidence and a great resume of customers over the course of over fifteen years that are using our products, but we also want to give customers the ability to prevent vendor lock-in. We even have avenues to use Wowrack in other cloud providers simultaneously. Some of the strategies that we’ve done and we’ve launched earlier this year is have a production-level grade software define network that allows companies to freely move from Wowrack data centers to let’s say an Amazon or Microsoft Azure or Google compute fabric on-demand. All in a pay-per-use utility base model, so we play very well and nicely with those other cloud providers.
Ed Kimm: The other things we do, like most other organizations, are trying to really hit and penetrate specific verticals and industries (i.e. Healthcare). So Healthcare is as many of you know is the most breached vertical in all the industries in the United States. Their average cost per stolen record for those people that are trying to steal that data, is around $90 per record versus one or two dollars for a credit card information. So you can see dollar per minute based on how much time a thief or a cyber-security hacker might want to take to be able to steal data, Healthcare is really where the money’s at. So with Healthcare—there’s a problem, there’s a need. A lot of organizations are looking to migrate their specific workloads to a virtualized cloud environment and our job at Wowrack is to be able to provide and create that solution specifically for Healthcare. We actually have a branded new solution called Wowrack HIPAA Compliant Cloud that allows us to provide this type of service.
Chris Carlson: Tell us a little bit more about that compliant cloud?
Ed Kimm: Sure. So there are a lot of different regulatory, and again these are the organization's way to adhere to the standards especially with audits and cyber security breaches for that matter. A lot of you guys know about FIPS or DIACAP for Government. There’s HIPAA Healthcare, right? There’s PCI credit card interface and transactions, there’s Sarbanes-Oxley (SOX) for public sectors. So there's so many adherences. When it comes to our specific Health Insurance Portability and Accountability Act Solution, we actually provide a given architecture that’s completely private cloud-based, so it’s not shared with any type of user and is completely built in a virtualized cloud environment only for a given organization.
Ed Kimm: We also have a huge HIPAA compliance cyber-security practice where we provide HIPAA compliance coaches that then go on-site to healthcare clinics or companies that are using a tremendous amount of healthcare data like Electronic Medical Records (EMR) and patient records and we can help them design their strategy based on what type of HIPAA audit and compliances they need to follow because HIPAA can be very small, it can be very large and quite cumbersome depending on the organization. Once we actually get through that consulting phase, which involves vulnerabilities, risk assessments, remediation planning as well as incident response plans, we then design high available and redundant backup and storage infrastructure in a private cloud model. Manage it for organizations and then we go ahead and provide as another amenity, the SaaS-based encryption software solution so if companies want to have a higher or greater level of security outside of just the standard web, application, firewalls or bare metal firewalls and architecture.
Ed Kimm: We can offer licensing for cryptographic bit-splitting, which allows us to encrypt and safeguard data, whether it be in-route transit between different cloud environments or even stagnant at-the-server level. Even if someone steals the server, the intellectual property on the server device is completely encrypted so it’s completely impossible decrypt and piece together back to where it makes sense for the thief.
Chris Carlson: When I listen to some of the things you’re doing about HIPAA compliance, I think about cyber security. It would just seem to me that the potential for a company like Wowrack is just immense going forward. Is that a fair statement?
Ed Kimm: In terms of our efforts to penetrate this market?
Chris Carlson: Yes.
Ed Kimm: I mean it’s a huge market. The pain-points are there. We want to be able to help the community and help industries solve problems based on our specific skill set and our product offerings, so yes, the need is there but it is still very competitive. There’s a lot of hosting companies that do not offer specific HIPAA compliant cloud offerings, there are many that do. So our value-add is just being able to design and manage it as a managed security service provider, but also add specific ad-hoc amenities like the SaaS-based encryption, like HIPAA coaches, like support services on-demand and providing the ecosystem where we can also meet total cost of ownership. Companies that have hardware that don’t want to rent, whether it be from us or Amazon or anyone else, but wants it to completely be removed on-premise, but they do have a need for hardware on-demand that needs to be managed, we can marry that all into one solution and provide that. So that’s really where, Chris, in the landscape of cloud and HIPAA where we’ve remained super competitive.
Chris Carlson: Well we’re obviously talking about the cloud. What are the trends in terms of on-site servers versus servers in the cloud?
Ed Kimm: So again, it’s going to depend on who you ask. People quite honestly laugh and ask “Why the heck do you still have servers on-premise?” Right? But there are other organizations that it really makes sense because sometimes there are some organizations that have huge transactions per second or TPS that their users need to be able to access this environment and proximity is going to be a piece of that right? If they're actually in a specific city or building and want to be able to have their on-premise network there because of their low-latency fee, it probably makes sense.
Ed Kimm: If you’re a company like Netflix, who has a majority or at least half of their customers globally outside the United States, then it makes sense to be able to have virtual machines and cloud infrastructures available on-demand ready to scale as needed, close to where those customers are because it’s very content driven network and these are really big media files that aren’t stagnant right so you’ll need high throughput, high internet connectivity and you need it close to where the users are. Now you can even say the same thing about Facebook or the NASDAQ for example when it comes to stock trading. So those are really good strategies when it comes to let's say an Amazon or public cloud or even a hybrid cloud approach.
Ed Kimm: When it comes to organizations that just want to have their hardware on-site because they want to remain in terms of psychologically speaking, remain close to their gear and just want to have control over it, sometimes you can’t really push someone else to think otherwise. What we try to do is we help people understand the challenges they have if they were to keep those things on-premise. If their applications make sense to move it off-premise. If we actually discuss it with them that they want to keep it then we also then add to that and say well if you want to keep it for example—Sally, “If you want to keep your stuff on-premise why don’t you look at a disaster recovery or backup solution or a storage architecture outside of your office so if something happens, because your office is not a data center, it doesn’t have redundant batteries and UPS (Uninterrupted Power Supply) or generator backup, or even people on-premise 24/7, then at least you’ll have peace of mind of backing up your data to a data center facility like a Wowrack that is right?”
Ed Kimm: So these are some of the options that we offer as a team to our customers. In terms of hybridization, that’s really where it’s at because now we can offer the best of all worlds. We can offer the support on-premise. We can offer support and host off-premise. We can even get those people to multi-tenant cloud companies like Azure or AWS, but we can also build everything internally and support for organizations really so they can wash their hands clean of CapEx spending on hardware. They can still rent even on a private cloud model and with everything supported by Wowrack internally here at one of data center facilities.
Ed Kimm: So I guess the long-winded—and I apologize for the long-winded answer, the short answer is: it is very competitive but hybridization is really in my viewpoint, with certainty, that wave of the future. Everyone has specific ad-hoc custom demands and it’s even more important for companies, not just us here at Wowrack, but other hosting providers to be able to provide the ability for people to grow and scale. To offer flexibility and also offer people the ability to move in and out because there’s a lot of fear that companies this day and age, with all their IP and all their money and data (customer records) in the cloud, to be able to have vendor lock-in right? Because people don’t want to worry about “well if I’m stuck with one provider what happens if they raise the rates or I can’t get out?” Those are very logical things to consider so in terms of interoperability in our industry, that’s what it’s called, or being able to migrate and move data freely, that’s what Wowrack offers and thats what I feel the industry as a whole needs to be able to give to some of their customers.
Chris Carlson: Well, you guys have been around for fifteen years, what’s the biggest challenge you face at this stage of your evolution?
Ed Kimm: Well, I think that like any other company its net revenue and cash flow right? We want to continue to grow and make money like all companies out there and so part of that is my role is to designing new cloud strategies and augmenting our current offerings, but also building a solid footprint within specific niches. So right now with us, it’s really not a complex or sophisticated answer, it’s really just to grow. So next year in 2017 we’ll want to continue to ramp up and hopefully get some of these deals that we have in our pipeline with Wowrack and then also use that additional cash flow and revenue to continue to hire talented sales representatives, hire people that can actually help us understand some of the cloud strategies outside of what we may or may not already know and to really hire people smarter than us to really increase our value-add and our talent pool.
Chris Carlson: So then what is the future look like for Wowrack going forward?
Ed Kimm: Geez, if I had a crystal ball to really give you that—real answer is that I’d probably pay you a lot of money for that! But right it’s just to grow, I mean I’m thinking MNAs and being acquired is always in the back of our minds of me and the team. But right now, it’s just to continue to grow. Remain profitable, in the black which we are, which has been a blessing for us and to continue to add on customers. Particularly enterprises within our sweet spot. Grow our core level of expertise and to market internationally too. We have companies that are based out of Southeast Asia and we do have data centers over there as well as a secondary headquarters based out of Indonesia that manages our Hong Kong, Indo[nesia], and Singapore locations so we want to be able to offer solutions overseas across the Pacific, across the Atlantic, and to really spread out our capability, not just to the US territories, but across the world.
Chris Carlson: Well, Ed I know you’ve got a lot of things on your plate and you’re very, very busy. I really appreciate taking time to visit us today.
Ed Kimm: No, I appreciate the time and giving this chance to share our story and what we offer and hopefully this will be a benefit to not only you but to some of the listeners out there. Thank you guys so much!
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