3 years ago we had a company called AuctionAds kicking ass and we needed our own datacenter with a zillion computers and bandwidth (and lots of expense).
When we sold the company we were able to leverage a great price on bandwidth to keep some boxes there in a rack… I can’t really go into specific details to much because of non disclosure on the sale agreement of the company but trust me we got a great deal.
But now 3 years later all of our servers are out of warranty and we really expanded our company but not our technical resources so moving to a managed hosting solution seems like much greener grass (to me).
Having someone maintain the operating system layer of the server, backups, firewalls, monitoring sounds pretty awesome.
So we have been fishing around a big getting some quotes…. the quotes are pretty heavy around 1k/month per box.
But whats heavier is the sales people. They call you constantly and want to know when your ready to buy and what they can do to make the decision easier…. blah blah blah.
So yesterday this guy from Rackspace calls me and is like “Hey made a decision yet?” (it had been less then 24 hours since I told him we would not talk about it at least for another week).
I told him no… he asked what the hold up was. I told him it was mainly price right now. Its hard to justify working away from a working proven system to one that is going to quadruple our expenses.
Which to that he said “Well keep in mind we have a huge number of employees that we GUARANTEE will answer the phone by the 3rd ring.
He also said they also GUARANTEE that in the event of hardware failure they will have the machine back on line within 1 hour.
I took him to task on this guarantee stuff and inquired what the guarantee was. He said – uhh well it means someone will answer the phone one by the 3rd ring and if there was ever a hardware failure we would have everything up and running in less then 60 minutes.
I interrupted him and was like listen dude I get that. But lets say we get one of these monster servers. Virtualize it into 5 different web nodes and the motherboard fries… Because its all virtualized its going to take down every virtual server on that box and every site on every one of those servers. Lets say then you cant locate another motherboard for whatever reason and all of our virtual servers and sites are down for 10 hours costing us $20,000 in lost revenue and maybe another $10,000 in reoccouring revenue. Does your guarantee mean that you are going to cover those losses to us?
He paused and then said, “well that scenario would never happen”.
I said “bullshit, I know people who have hosted at Rackspace that SOME things have happened… sure that’s worse case but its very real with sites like Techcrunch who recently moved their hosting off of Rackspace and onto WordPress VIP hosting cause they could not deal with all the Rackspace Downtime”
So I asked again, “What exactly does it mean if you do not meet your “guarantee””.
He said, “Well we will give you credits”.
I said, “Credits for what?”
He said, “I would have to look at your SLA agreement, but listen we hardly ever have hardware failure and when we do its replaced in like 10 minutes the 60 minute guarantee is a huge leeway we never have a box down that long”.
So ok… I responded “I understand so how about this. Lets write into the contract that for each minute over 60 that our boxes our down for you pay us 1k per minute. Since you are saying it will never happen”.
He responded “I can’t do that”.
me – “Course you can’t. You want me to sign up for your hosting package so you can get a huge commission but when we are loosing money cause your shit is down then where you at? We will be given a random amount of some sort of “mysterious credits”? WTF is that”.
That’s basically where the conversation ended….. for now… I am sure he will call me this morning.
But it really got me thinking. Making a guarantee is an amazingly powerful selling tool. I bet 99.999% of the time nobody ever inquires what the actual guarantee is.
For instance I could say I guarantee this post will change your life. And you would read it… right? But whats the guarantee to back it up?
I guarantee now that fake blogs and testimonials are under attack by the FTC I suspect we will see a rise in guarantee statements as the new way to mislead the consumer.