German web-hosting company Strato AG will begin a phase of expansion into other European markets in April when the new .eu top-level domain becomes available.
On April 7 the Berlin-based company will open for business in the UK and one or two other major European markets it declined to reveal for competitive reasons. CEO Damian Schmidt acknowledged that Strato, which is number two in its home market with 1 million customers and 2 million domains hosted, is behind German market leader 1&1 Internet AG, which is already in Austria, the UK, France, and the US, with 3.5 million customers and 5 million domains worldwide.
We’ve learnt from their mistakes, said Schmidt. Among those mistakes, in his opinion, was a marketing approach that saw 1&1’s German marketing and product strategy replicated in translation for the other countries, where Strato will seek to adapt its offerings and messages to each local market it goes into, and the decision to expand to the US.
In Europe hosting can be done across borders, and all Strato’s customers have their sites hosted at its German data center in Karlsruhe. The distances are too great when you’re hosting US sites, so 1&1 are having to invest in local infrastructure, said Schmidt.
Strato, has no plans across the Atlantic. Its CTO Rene Wienholtz described the US market as fragmented, and even more local than Europe in terms of providers. It is that US market fragmentation that enables 1&1 to claim to be the world’s largest in web hosting.
Strato is pinning its hopes on the imminent availability of the .eu domain across the European Union, with companies with pan-European trading ambitions identifying opportunities for a single portal for Europe. It also notes that the UK lags behind other countries in the Union with regard to grabbing .eu names.
According to the European Registry of Internet Domain Names, EURid, as of yesterday morning, 30% of the total applications for a .eu registration had been made by companies or individuals from Germany, 16.5% from the Netherlands, 10% from France, and only 9% from the UK, so Strato will be advertising to publicize the availability and advantages of having such a site.
As for how it differentiates itself from the competition, Wienholtz cited Strato’s investments in two data centers, the one in Karlsruhe and a second in Berlin for mirroring, together with the technology it has put in place to guarantee high availability. Most hosting companies allocate, say, 500 customer sites to a single server, whereas we run application farms, so there’ll be one for mail and another for web traffic, such that it one server in the farm goes down the service will fail over to another, he said.
Strato has also invested in getting major hardware partners on board. It is a development partner with Sun Microsystems on the server side, having been a reference customer at the European launch of the Sun Fire T2000, and has the first installation in Europe of Cisco’s CRS-1, the networking company’s high-end carrier router. In storage, its partner is Network Appliance, whose snapshot capability it uses, said Wienholtz, to take 10 backups a day that are accessible by customers and retained for up to two months. In comparison, he said 1&1 takes one backup a day.
In terms of traffic, Wienholtz said the company’s data centers handle about 1.6 petabytes a month, and said it is the first hosting company anywhere to have achieved certification under the British quality standard BS 7799.
In Germany Strato has a portfolio of about 50 products, from the most basic entry-level hosting service for individuals to the most complete one for companies engaging in e-commerce. In other countries we’ll start with around five and add options as each market demands, said Schmidt.