LeaseWeb, since 1997, from green hosting to the colocation's challenge

LeaseWeb is a standard in the webhosting industry, when you say “LeaseWeb” it’s very difficult that someone doesn’t know it in this industry. LeaseWeb was born as a colocation provider, today colocation is its core business and has increased worldwide over the last five years, focusing its business on key issues such as offering colocation and bandwidth in a “peering area” favored by the proximity of Amsterdam.



We interviewed Con Zwinkels, founder and director of the company, asking him to tell us how the company has reached this level. Graduated in law, he explains that a hosting provider must make a choice to be in this industry, offering managed services, or focus on colocation, where the margins are thin, you need major infrastructure to be competitive and growth is not always easy.


Italian version of this interview is here.

Mr Con Zwinkels thank you for this interview. Well, to start off, can you tell our users what LeaseWeb is and say a little bit about its history?

LeaseWeb delivers high quality at a competitive price. We have a lot of bandwidth capacity in our own extensive hosting network, which built up entirely from Cisco equipment and we have a lot of equipment in stock. Clients also mention the broad and in-depth knowledge that LeaseWeb-engineers have as an important advantage.

Our service provision includes implementation and support for hardware and the OS. We like to leave value added features to resellers and web developers that offer their clients managed hosting services. Our hosting products are very lucrative for resellers that do not have an extensive, high-quality network like the LeaseWeb’s. Thanks to our competitive prices, system integrators, web developers and other professionals are finding it a very attractive basic product from the point of view of margins. The product is an interesting one for hosting-service development.

LeaseWeb was founded in 1997. At the time, it had one server and a limited number of clients. Today, LeaseWeb manages more than 11,000 servers and has more than two million websites within our hosting network. In the first several years of our existence, we particularly focused our investment of time and energy on the development of a high-quality network, which is now starting to pay off. Various studies show that, at 99.99 percent, uptime within the LeaseWeb network is very high. Combined with the large bandwidth that our network has - currently more than 210 Gbps - this has a big appeal for parties that have websites for streaming and live streaming.

What is your role at LeaseWeb?

I am the Managing Director and co-founder of LeaseWeb. I have worked with my fellow shareholders to make LeaseWeb the hosting company that it is today, with a prominent international market position. Now that LeaseWeb has developed into a large organization, it is my role within management to make sure that LeaseWeb maintains this prominent market position and especially to ensure that it extends its position by strategically making the right investment decisions.

About you, Con. In 1996, you finished your law study and started your ‘adventure’ with the OCOM group. What gave you the idea in 1997 to open an Internet services company? What were the main difficulties that you encountered? I’m sorry for my curiosity, but I think that you are a good example for our industry!

My partner and I started by getting websites online, which included website creation. When we had reached maximum capacity for the first server, we got a second and then a third one. But we soon discovered that website quality is usually a question of taste. We are a little more ‘logical’ and far more interested in the technology behind a website, so it wasn’t long before we decided to focus on Internet infrastructure.

In the first 10 years of our existence, we spent a lot of time and energy building and developing LeaseWeb’s Cisco-based hosting network via telecom carriers and Internet exchanges. Of course, this resulted in a number of concerns because you want to achieve maximum uptime for your clients. Luckily, our investments were successful. Our sizeable network is very reliable and very attractive for clients that have a strong need for growth in their hosting environment; for streaming or live streaming, for example.


How important is further growth for LeaseWeb?

It is important for hosting providers to make choices. Either to concentrate on managed services, or choose to offer hosting that includes network connections as a basic product, on which end users, web developers and system integrators can develop their own services. In the case of the latter, it is definitely important to achieve a certain scale and strength of growth. Only then will it be possible to continue to guarantee high-quality hosting at a competitive price. LeaseWeb has chosen the second option, so growth is very important for our organization.

About green hosting. LeaseWeb has entered into a green-hosting partnership with EvoSwitch and it would seem that there is a high demand for dedicated green servers. But tell us, what are the points to be considered when giving a hosting provider a ‘green’ label? Green hosting also means higher service costs. How can this be explained to the client?

LeaseWeb is part of the OCOM Groep, a total supplier of Internet services. The EvoSwitch CO2-neutral operating data centre is also part of OCOM. Significant energy savings have been achieved within this data center by using technologies like Cold Corridor, in which cold air is separated from warm air, and Free Cooling, where the outside temperature is used to cool servers and as a result energy intensive compressors are no longer needed for most of the year. A large number of racks are available to LeaseWeb within EvoSwitch.

Quite often, the perception in the market is that ‘green hosting’ is more expensive, but this is wrong. Actually, green hosting will soon become the only way to keep the hosting infrastructure affordable in some way for companies. It will also be the best way to be able to continue guaranteeing the competitive prices that LeaseWeb charges. This is because more than half of data-center costs can already be attributed to energy consumption, and these costs are clearly increasing.

So, opting for green hosting does not necessarily mean opting for socially responsible business practice. What is far more important is that green stands for the energy-efficient organization of your hosting environment. Green energy will of course result in some extra costs, but these will be negligible. A green data center also means that you can cool equipment in a way that is more targeted and even beneficial for equipment performance. So, choosing green means choosing quality.

LeaseWeb recently released a new VPS service on VMware platform. What is your opinion of the VPS market and platform? Why should clients buy a VMware VPS rather than a dedicated server, which costs the same in some cases?

Virtualization will become increasingly more important for our clients in the future. This is why we have built up knowledge of various virtualization platforms, including Xen, Virtuozo, VMware and Microsoft Hyper-V in our organization. There are a number of advantages to virtualizing your server environment: it saves space and it saves energy, because you need less hardware. And it makes your hosting environment more flexible and scalable.

In addition to this, a virtual host is not linked to physical hardware, which has advantages for uptime. Uptime is increased because no downtime is needed for a virtual host during hardware maintenance. In the case of relocation, virtual servers can also be migrated to another physical server in a virtualization ‘cluster’ without downtime.

The decision to choose a VPS or a traditional server will depend in part on the performance to be delivered by the server environment. Where a major database environment is concerned, it can sometimes be wiser to use a physical server. It also depends on the knowledge that a client has built up within its own organization. So, significant advantages can be achieved with a VPS, but the decision to opt for this must be supported by policy.

You have clients from the USA, Europe, Asia, and so on. Are the requests that you receive from clients about bandwidth, software or support different depending on which country they are from? Do you have any Italian clients?

Approximately 70 percent of our client base is from outside the Netherlands, including Italy. Many of our clients in Italy are system integrators, web developers, or use our products in a different way, as part of a total solution.

For example, Feedback Italia is one of LeaseWeb’s clients. Feedback Italia supplies products and services throughout Europe in the field of interactive video communication via the IP protocol. The Twenga product comparison site, which has a local site in Italy, is another LeaseWeb client. It’s a big client, I can tell you. Twenga started with 100 servers and expects to have as many as 500 servers within the next two years.

Client demand actually varies very little from one country to another, but what you do see is that large clients from countries with a less well-developed Internet infrastructure specifically choose Amsterdam. Amsterdam is an important Internet gateway worldwide; this is one of the advantages of LeaseWeb’s business location.

Well, your offers include unmetered dedicated servers with a 100 Mbps port. Can you explain how this offer works and whether it really is possible to use 100 Mbps for each server? How do you manage bandwidth sharing in this offer?

LeaseWeb clients can indeed use 100 Mbps of ‘full duplex’. Both servers have a connection with a switch, with two Gigabit uplinks. One of these uplinks is used actively; the other is for redundancy purposes.

LeaseWeb monitors the traffic on these switches. For example, when there are eight 100 Mbps clients on one of these switches we can add 20 clients with 10 Mbps. If there are more than 10 servers using 100 Mbps on each switch, we can add a second set of 1 Gigabit Ethernet uplinks to create a redundant 2Gbps LACP. This makes it possible for us to continually guarantee the bandwidth capacity offered.

LeaseWeb now manages over 11,000 servers. How do you envisage growth in the years ahead? How many new servers will there be each year?

Over the last five years, we have grown by more than 1000 percent, which has gained us 18th place in the Deloitte Technology Fast 50 - the list of fastest growing technology companies. I expect that our growth will be at least as strong in the years ahead.

However, substantial growth is not our only goal. We also want to make sure that our new clients become and remain happy clients. This is why, for example, we have recently invested heavily in staff education and training and in strengthening our support department.

There is a data center boom at the moment. What is your advice when building a new data center? Which aspects are most important? And what would your advice be to a new hosting provider? The market seems saturated, but is there still space for new companies?

You are right; there are a number of initiatives for the development of new data centers at the current time. However, there is still a great shortage of data center space availability in places including Amsterdam, London and Brussels. We have resolved this shortage by building our own data center with a sizeable capacity.

One important consideration when building new data centers is attention for energy consumption. EvoSwitch has invested in energy-efficient technologies. I am surprised that data centers are still being built using the traditional method, where attention focuses on uptime rather than on energy consumption. Both aspects are important and even vital if you want to make sure that the data center environment continues to be affordable in the future.

There is a reasonable amount of competition within the hosting market, but particularly amongst colocation providers. Because of this, I expect some level of consolidation in the time ahead. As I have already said, it is important for hosting providers to make a clear choice in this market. Most hosting providers will opt to supply managed services. However, there are still colocation hosting providers that are really supplying little added value at all. In the last case, it will start to become difficult to earn a living because margins within colocation are eroding.


These are the last questions; don’t worry! Today, we are talking about the evolution of the hosting industry, from shared hosting, dedicated hosting, colocation to something like cloud computing, and concepts like hardware as a service. Two questions about this: Firstly, what are your views on the evolution of the hosting market and on these new technologies? Secondly, does LeaseWeb have any plans to offer cloud computing services?

Various clients are offering Software as a Service via the LeaseWeb hosting network. SaaS is a development that is set to continue. As I have already said, LeaseWeb does not intend to launch managed hosting services, but this is a development that our clients should monitor.

We definitely see a place for cloud computing within LeaseWeb, but we are not offering a solution like this in our portfolio yet. Recently, we have concentrated primarily on the development of virtualization products based on Xen, Virtuozzo, VMware and Microsoft Hyper-V. We are evaluating the possibilities that cloud computing offers. This will only start to play a role at a later stage.

One last question. Which LeaseWeb projects can we expect to see in the future? New services? The expansion of data centers?

We are expanding our physical presence and visibility strongly in different countries in Europe. We are also currently considering physical entry into the hosting market in North America, by acquiring or building our own data center. I expect that this will make it possible for us to achieve an even larger worldwide market share.


Con, thank you very much for this interview.
Thank you too. I’ve enjoyed it!



Produced by Stefano Bellasio for HostingTalk.it
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