Hostworks' $5m FSD project winds to a close

Mission critical hosting company Hostworks is weeks away from completing three out of five stages of its $5 million Future Service Delivery project.

The FSD project is an investment in new tools aimed to provide Hostworks with a more reliable service and customers with better visibility of the services they consume.

Former management considered it "the most significant program for the future of the company."

This week iTnews has learned that Mike Sellars, the man contracted to lead the project, spent his last day with Hostworks on Friday.

Managing director Paul Mullen said Sellars was "hired at Hostworks on contract specifically to run the Future Services Delivery contract. Now that FSD is coming to an end, he leaves."

Three out of the five stages of the FSD Project are expected to be complete by August 1 - including the most vital automation and monitoring components.

Mullen said the new automation smarts would make Hostworks far more efficient in terms of the application of patches and upgrades.

But two other projects - the development of a new customer portal called MyHostworks and a Change Management Database won't be completed.

"We are parking these two projects for the moment while we bed down the other three," Mullen said.

"The requirements changed. When we scoped out what the customer really needed, we became unsure of whether we wanted to continue building some of this stuff ourselves or buy something off the shelf."

Mullen said funding was still set aside to complete the projects should they be given the green light again.

Hostworks has spent approximately $4 million of the original $5 million earmarked for the FSD project.

Last of the old guard

The departure of Sellars and senior network engineer Ben Ryks, who also resigned this week, sees off the last remnants of Hostworks' original management team.

As reported in iTnews, the majority of Hostworks' management have resigned or been made redundant ever since the resignation of founder Marty Gauvin.

Mullen said Ryks worked for Hostworks for seven years and "was very highly thought of. We'll be replacing him," he said.

But Mullen has decided not to replace any of the C-Level executives that have resigned from the company, preferring instead to promote younger staff into General Manager positions, reporting direct to him.

"We won't be replacing [COO] Peter Wildy and [CFO] Kylie Turner with C-Level executives," he said. "We decided the Hostworks business doesn't warrant this level of seniority. I am a hands on managing director, that will work closely with general managers."

Mullen is now looking to appoint a general manager of finance and a general manager of operations, to be based in Hostworks' Adelaide office.

He has already appointed a general manager of customer experience and a general manager of sales and marketing, and brought across David Hilliger from Broadcast Australia as a new technology manager to begin the process of marrying the broadcast and internet operations.

Customers keen on changes

Hostwork's key corporate customers do not necessarily see the pattern of redundancies and resignations as problematic.

One CIO, employed among the many former PBL-owned companies (realestate.com.au, carsales.com.au, Hoyts, Sky News, Seek, NineMSN, Ticketek etc) that outsource to Hostworks, told iTnews on condition of anonymity that the investment by Broadcast Australia in Hostworks and the subsequent leadership reshuffle is welcome news.

"What you are seeing is a changing of the guard," he said. "It happens in any company's history when it is acquired. It goes from being a small start-up, run by its founders, to being a much larger business.

"When you have multi-million dollar contracts with a hosting company, you would rather them be well-funded and well-backed by a strategic player in the market, rather than simply run by the guy who knows all about the electricity supply to the machines."

Gauvin has indicated to iTnews that his next venture will focus on the much-hyped cloud computing model, an area the CIO believed could have distracted Hostworks from its core business.

"What we want is Hostworks to remain reliable, to be secure, to stick to its knitting," the CIO said.

"I'm not sure any Hostworks customers are upset by the changes. Actually, if anything its a good thing.

"We don't want Hostworks to be distracted by the new nice fancy toys. We'd prefer them to be profitable. And it's guys like Paul Mullen that will bring that to the table.

"Are we interested in cloud computing? Sure. But it's something that needs to be proven. Will [we] be the first to market with it? No. The risk is too high for us."