Here’s a story Drew Kaplan tells to show the benefits of keeping a server at a separate, outside location. During his run for governor, Arnold Schwarzenegger didn’t keep the computer equipment handling his campaign website at his office because it wouldn’t have been able to handle the traffic. “He would have flooded the connection,” Kaplan said. Being a muscular former actor running for state office isn’t necessary to get the same service at ISWest, the Agoura Hills company Kaplan co-founded and now heads. Started in 1996 as an Internet service provider, the business-to-business co-location service took off for ISWest in recent years as more companies took the cost-effective route of outsourcing its information technology infrastructure. Why have internal IT departments with thousands of dollars of equipment and the accompanying thousands of dollars in electric bills when ISWest is willing to do it instead? The reasons businesses come to ISWest vary, including server and website hosting, and as backup for disaster recovery. Some publicly-traded companies are required by Sarbanes-Oxley (the federal accounting reform act of ’02) to keep their data at a neutral site. Serving its varied customer base resulted in the company being named on fastest growing private companies lists by the Business Journal, Inc. magazine and professional services firm Deloitte. Its own feedback also shows the company is on the right track. A survey done last year of customers asked if they would recommend ISWest to business associated resulted in a 93.6 percent saying they would. “We took that as satisfied customers,” Kaplan said. Toby Scott, a partner at Ventura County Computers, has recommended ISWest to a number of its clients. “We have a mutual customer we introduced to them that has three servers over there,” Scott said. Cabinets, cages, and 200 tons of A/C equipment Sleek black cabinets and cages fill the recently completed data center in Agoura Hills. That wasn’t always the case. The early years of the co-location service was putting hard drives side by side on a shelf bought at a Home Depot. Only later, as the company grew, did the cages and cabinets arrive and lend a professional appearance. With the high tech look and all the security in place, stepping into the ISWest data center is akin to being on the deck of the Starship Enterprise, said Jeff Sherman, the owner and manager of Arcadia Web Service. At his website design and hosting company in Ojai, the server is the biggest asset and Sherman cannot afford to have something go wrong with it. “It makes me feel comfortable that it’s not being stored in someone’s garage,” Sherman said. The new data center is made necessary by the existing center, also in Agoura Hills, filling to capacity. Its design takes advantage of every redundancy possible two power sources, with two generators and two transformers. A biometric scan is necessary to enter the room, cooled by more than 200 tons of air conditioning equipment and protected by a fire detection system sniffing the air for combustible materials and automatically alerting the fire department when it detects something. While the server hosting drives the growth for ISWest, internet service still accounts for about half the business. Connectivity is provided through DSL lines, T1 lines, and bundled T1 lines that give faster speed without the use of fiber optics. ISWest becomes the conduit between the telecomm provider and the business customer using the service. There is a benefit to being both the ISP and the co-location, Kaplan said, as the connection between the customer and their servers becomes a direct private line that never hits the Internet. Growth through acquisition A strategy of acquisition grew ISWest’s customer base for much of its existence. Between 1998 and 2004, the company bought out six other ISP in Los Angeles and Ventura counties. That strategy was the quickest way of adding new customers as the purchased companies were not profitable or had no market penetration. “We could benefit from the quick growth and make it profitable right away with the economies of scale,” Kaplan said. Both Sherman and Scott ended up as clients as a result of the buyouts. Sherman, in fact, had some reservations about ISWest taking over his former service provider until a face-to-face meeting with co-founder Robert Johnson calmed those fears. That personal service shown by Johnson continues to this day. “While they have grown bigger and bigger I have never felt like I was just another number to them,” Sherman said. When the switch over to ISWest took place for Scott his server was down for the time it took to drive the equipment from Ventura to Agoura Hills. “They had me up in no time at all,” Scott said. With consolidation reaching its peak, the company now shifts its strategy to using an inside sales force to bring in new customers. Previous tries at using sales people had never worked because the company lacked the right person to lead the sales team, Kaplan said. Several months ago, Joey Cary was hired as the new vice president of sales and marketing to build the sales force. Cary’s experience and track record make him the right person to tackle that job, Kaplan said. Solidifying an internal sales force will help meet Kaplan’s goal of making ISWest into a $50 million company with more data centers serving its customers. Getting there will likely result in more recognition as a fast growing company. The growth the company has already seen, however, has never been unmanageable. Kaplan credits that to the methodology of the business decision process that has the management team staying ahead of the growth. By adding people and equipment ahead of time the future workload can more easily be absorbed. “The worst thing is to have an unhappy customer because we can’t handle what we’ve got,” Kaplan said. ISWest Year Founded: 1996 Revenues in 2004: $5.5 million Revenue in 2007 (projected): $7.8 million Employees in 2004: 13 Employees in 2007: 25
