Web Host Applied Innovations Lowers Prices, Gains Competitive Advantage and Grows Business thanks to Blue Street Capital
Success was becoming expensive for web-hosting firm and cloud services provider Applied Innovations.
The Boca Raton, Florida-based company needs fast, reliable, and high-end servers to support clients. And that means Applied Innovations must frequently buy new equipment, either to replace outdated or poorly performing products or to manage the web services of its rapidly expanding customer base. Today, Applied Innovations hosts 35,000 domains for more than 10,000 customers on over 2,500 server instances, and is one of Microsoft’s closest hosting partners.
You don’t get that kind of success by using junk servers or sluggish networks. And so, before it began leasing servers, Applied Innovations spent a lot of money buying the powerful equipment it needs to run its business, recalls Jess Coburn, CEO and founder. It was also time-consuming.
“When you buy as much equipment as we do, as frequently as we do, for a company of our size financing all this equipment can be difficult at times,” he tells me. “We didn’t start working with leasing companies in general until about four or five years ago. Oddly enough, we didn’t experience our best growth until four or five years ago.”
That growth is directly attributable to Applied Innovations’ embrace of leasing to keep its equipment current.
Leasing frees-up Applied Innovations’ cash-flow, allowing the company to spend these funds marketing and reduce the fee it charges clients for the same high-level of service, Coburn says. As a result, customers are extremely likely to sign-on for longer contracts; since Applied Innovations factors the client lifecycle into the lease term, the rates are more favorable for both the service provider and the customer, he adds.
“We didn’t have to worry about getting that money back so quickly,” says Coburn, “so we can allow a lower price-point for the customer.”
Although Applied Innovations could lease from its hardware providers, the company prefers leasing from Blue Street Capital—a partner for about five years, says Coburn. In addition to its in-depth understanding of Applied Innovations’ business, Blue Street Capital provides competitive rates that often beat other leasing companies’ offers, he says.
“A lot of these companies aren’t as customer-aware as Blue Street is. Blue Street takes the time to know the customer, understand its needs. They understand what we do,” Coburn explains. “They don’t take their cookie cutter metrics and say this is where you fit in. Very frequently, Blue Street gets us the best deal.”
Because of leasing, Applied Innovations’ hard-earned dollars are no longer tied-up in its servers. Instead, the company now uses the money saved on leasing to promote its business through marketing initiatives, he says. Indeed, Applied Innovations now has 14 employees. Before it began leasing, it had six employees, Coburn says.
“In that five year period, our company grew four or five times,” he says. “I would attribute the fact we’re leasing the equipment to that. We’re able to invest that money back in marketing.”
And that’s the type of investment any growing company is happy to make.
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Partner: Applied Innovations
Location: Boca Raton, Florida
Services: Cloud services provider, Website hosting, managed server hosting
Benefits of Leasing:
Saved money on servers used in-house to support clients
Passes savings on to clients for lower rates
Uses savings for marketing
Credits leasing for five-fold growth of company
Benefits of Blue Street Capital: