Welcome to Penton Technology Newsmakers, a recurring monthly series focused on bringing you informative one-on-one interviews with industry experts. For this month’s edition, we talked to DreamHost VP of cloud and development Jonathan LaCour. Since joining the company in 2011, LaCour has been instrumental in building out DreamHost’s cloud services and its development organization. This Q&A is a must-read if you’re looking at building out an in-house dev team, considering whether to build or buy when it comes to cloud, or wanting an insider’s view on the cloud market over the next 12-18 months.

Brought to you by The WHIR

The WHIR: Can you give us a little bit of a background on yourself and tell us a bit about what you do at DreamHost?

Jonathan LaCour: I started out in the software industry on the technical side of things. I was actually a developer and in software engineering; started very early days in software-as-a-service doing medical software and then I started doing some startups. I founded a cloud-based, web 2.0 solution for business people, kind of like a Salesforce of the little industry I was in, and I was a CTO there. I developed a lot of skills on how to operate a business above and beyond just doing the technical stuff; making sure that we could create a sustainable company. I went from doing purely the development to product and also operations so deploying our products to early cloud solutions and growing the customer base. I sold that product and the company back in 2010 to a company here in Los Angeles and there I served as a vice president of software product so I was kind of in charge of the product management and development, bridging into operations as well for all of their web-based software.

From that I departed and came here to DreamHost. The guy who led the acquisition of my company became CEO here at DreamHost, Simon Anderson, and so I joined to run DreamHost’s product and development team. I built out a product management discipline that didn’t exist and started bringing some discipline, organization and efficiencies to the development team. That was a great experience, and I took over the cloud business unit in late 2014. That basically was our first experiment with branching off part of the company to be more of a vertically integrated business unit – putting together everything from the very base layer of operations and engineering up through the software development, product management, sales, marketing and finance. That has also been a great experience and now we have finished going through a reorganization of DreamHost where we’ve done that with the entire business. We have three discrete business units now and I run the cloud one.

WHIR: Sounds like you’ve been busy. In your day-to-day role what does your job look like? What’s kind of a typical day in your life?

LaCour: Yes, I have been very busy [laughs]. DreamHost has been around for 17-18 years now, and our primary business has always been web hosting, and VPS, shared, and dedicated, kind of the standard set of services that people in hosting have come to know and love. My part of the business, you can kind of think of it as the emerging technologies or the new platforms and new business. Cloud services are really focused on people who are interested in deploying applications to infrastructure. It’s more in line with the Amazon Web Services of the world, although we don’t view them as a competitor. We’ve got two products; we’ve got DreamObjects and DreamCompute, and those are basically cloud storage and cloud computing, respectively. Basically it gives people like developers the ability to create virtual servers, virtual networks, store lots and lots of data in our cloud storage platform, and so it really targets developers, more technical folks, people who maybe have an existing application running on premise or in another cloud and are looking to learn about cloud or wanting to save money.

READ MORE: DreamHost’s Open Source Public Cloud DreamCompute Comes Out of Beta

My day-to-day really is all about continuing to iterate on those products, make them better, and get them out to a broader audience and grow the base. Right now I represent a very small chunk of the total user base because my products have not been in market for very long. Any given week I spend a significant amount of time doing strategy, figuring out what we’re going to work on next, and then a lot of blocking and tackling in terms of execution. Whatever we’re currently working on, making sure we’re tracking and making sure we’re executing against our plan. I’m pretty hands on when it comes to that, especially on the technical side of things: understanding where the software development is at, and understanding how the deployment is going. There’s also a lot of finance work: time spent assessing the margin on the product, price points, packaging, ensuring that we are only building out just ahead of capacity so we maximize the profit we can get from our services.

I spend a significant amount of my time surveying the landscape and the marketplace and understanding what the industry looks like right now when it comes to cloud services. In the web hosting industry a lot of the other players are starting to dip their toe in the water. We also have a lot of emergent players who have burst on the scene in the last couple of years that are selling just unmanaged virtual servers have done really well. So I spend a lot of time looking at the marketplace and feeding that information back into the product.

WHIR: Speaking about the marketplace, maybe you can give me an overview of where you see the hosting industry at this point and then looking forward 12-18 months from now?

LaCour: We’ve just gone through a huge exercise doing this exact thing; really digging in and seeing where the industry is and where we want to go. What we’ve concluded is the industry itself, if you look at the standard, shared, managed, VPS hosting products that we have all seen for the past decade, that provided all the growth up until this point, the growth has been slowing for basically everyone, industry-wide. Why is that? Well, there are a number of reasons but I think the primary reason is that hosting is a platform play. You aren’t signing up for a solution to your problem, you’re signing up for something that can be a building block to a solution to your problem. If you sign up for managed hosting and you want a website, which is your problem, ‘I have a website I want’, and you have to find a content management system. So you may one-click install WordPress; our platforms are great for that – we provide people with lots of choice and lots of capabilities and for a very low cost they have something they can put lots and lots of domains on and solve lots and lots of problems but the actual solving of that problem is very much in their hands. What we’re finding now is that middle of the road option for people who want a lot of control but need some help. People are moving up the stack to more application, kind of software-as-a-service type things. You know, site-builder type services, like the Squarespaces, Weeblys, Wix of the world. Someone says ‘I want a website’ instead of ‘I want shared hosting’ and so they get the ability to create a website easily. They’re not looking for the platform; they’re looking for the actual solution to their problem.

That’s one way the industry is shifting. For the people who want more control, they actually want more and more control, and more capabilities and power, and so they’re shifting to the cloud. Instead of signing up for something that’s middle of the road, and getting limited technical capability, they want to pick which version of Linux is running on their server, and they want to have their own server, or ten servers, and they want to be able to spin them up and down at will, and really kind of embrace the technology. And they don’t want anyone messing with their stuff; they don’t want to be on a platform that’s intermingled with a bunch of other people.

Cloud is becoming bigger and bigger so that’s why you’re seeing companies emerge like DigitalOcean and Linode – these companies that provide more technical platforms aimed at IT managers, developers, the highly-technical who want to have all that control and don’t want the platform. So the core product the hosting industry has had for years is being siphoned away simultaneously be things that are more technical and less technical. People are either wanting to build it all themselves without your help or their wanting to have it all built for them and get on with their lives.

In 12-18 months I see a continued flattening of growth in the traditional managed hosting and I see continued uptick and rise in software-as-a-service platforms and in cloud.

WHIR: How do you see DreamHost’s position in the market? You didn’t always go after developers, and it sounds like you’re starting to go after more of those technical users. How much of a challenge was it to focus on that group [developers]?

LaCour: In terms of being focused on that group it wasn’t too difficult for us to make the leap because we’re a bunch of technical users ourselves so in many ways it’s serving our own needs and I think the big difference between us and a DigitalOcean-type is that in many ways it appears that we’re doing the same sort of thing it is not just a product that we’re developing to sell to our customer, it’s a product that we’re developing to sell to ourselves. We have tons of expertise selling open source apps to people, notably WordPress. We are great WordPress hosts, probably the best in the market. We have this infrastructure that we’ve been building that underpins our software as a service and our other products.

We actually develop our cloud to go after developers but also to provide an infrastructure for our own use. That’s a wonderful thing because we have a customer in the building that we can talk to at all times and ask if we’re serving them well. While we’ve been in market as a purely ‘sell our infrastructure to developers’ for a bit now we are just starting to use it extensively ourselves internally. So the shift wasn’t really all that difficult in terms of mental shift, but the technology was big, heavy lifting to get good enough for us to use to run our own services.

In terms of the people we’re going after I’ll say that while developers are certainly part of the target I’ll also note that we’ve been attracting customers such as little startups that have been running their software on dedicated racks or colo or something of that nature and they’re looking for someone like them who can understand them and who embraces open source platforms – they want more of what cloud can give them.

WHIR: When you set out to create this cloud business unit and brought forward some of the experience you had on the product management side of things, what were some of the challenges that you faced?

LaCour: Back in 2014, the reason for doing that was frankly it was very heavy lifting building out these technology platforms. We chose to build out our cloud storage and cloud computing platforms on top of open source software, including Ceph, which is a project we created here at DreamHost, and OpenStack which is a huge, successful open source project. That said, both of those projects are very difficult to deploy and manage and maintain and run. It was a huge ordeal to go through the process of building out these new platforms. In 2014 the effort to do that was really to free me up to focus fully on getting those products finished and out the door. That was job number one.

It took the better part of a year, from 2014 to 2015 to really get that done. We got into beta, and that’s when started learning a bit about the people who were using the software and that’s when you start to think, ‘OK, what do people want out of this service? Who is the persona, the customer-type that is going to be using this?’ We started to do some assessments, demographics, everything from what browser people were using to age groups and screen resolution. We started to understand our customer a lot better. What we did was we took that data and built out real personas with real names, and now everything we do is really based on satisfying those customers. It’s these external customers and our internal customer at DreamHost who are building out these new services that we are going to serve. So the biggest challenge was that learning experience. Getting things deployed and into the hands of customers and then rapidly figuring out who that customer is and what they’re trying to accomplish. And that’s guiding everything we do from this point forward.

WHIR: You spoke a little bit about building the cloud storage platform and basing a lot of that on Ceph and OpenStack. The conversation in hosting for a long time has always been the build versus buy dilemma. What’s your take on that and how do you think cloud has changed that conversation?

LaCour: DreamHost is kind of a unique bird in this particular question. This has been a longstanding thing at DreamHost – before I even came here DreamHost has always had a strong open source bent and preference, and we also fancied ourselves engineers.

Over time we’ve developed a lot of software. We have our own control panel, which many people out there buy things like cPanel or Plesk, we never have. We wrote our own control panel; we own our own user experience. We developed our own configuration management – all these technical things on the backend, cobbling together mostly open source tools and so on. I think it’s been both a blessing and a curse for DreamHost to build everything. Sometimes we make the decision that we should when we should have just bought something, but we’ve got a lot better at that over the last four or five years especially. As we’ve brought in some new blood, including myself, we’ve done a much better job at looking at things and saying, ‘OK, do we really need to have our own bug tracker that we wrote? Probably not.’ Let’s focus on the things that our customers want and are going to make us money. We’ve definitely shifted in that regard but I think that DreamHost very much is and always will be a place that is built on open source software; we take open source software and we make it accessible and great.

WHIR: One thing that has stood out to me about DreamHost is its diversity, and I think that culture is a huge part of your DNA as well. Obviously there are skill shortages in specific areas of development and engineering; can you talk a bit about that and your approach to hiring?

LaCour: It all starts from culture. If I had to say the one thing that I was most proud of about being part of DreamHost, it would be our culture. That culture has existed since before I got here but since I joined 4.5 years ago DreamHost’s leadership team actually sat down and decided that we wanted to really articulate our values and put them down on paper. We had a focus group if you will – a group of people that came from all parts of the company – representing our very diverse employee-base and they solidified it and came up with something called the DreamHost Way. We have 8 values and then one kind of core statement that talks about who we are as a company and includes things like empower people, give everyone a voice, speak hacker, embrace open source, practice shameless honesty, practice flexibility, be irreverent and fun, and provide superhero service. We actually have those values painted on the wall of all of our offices. We frequently take big decisions to the group, to the company itself, we’ll vote on things from time to time. We try to really involve everyone in the process. That’s all permeated now in the handbook and through the hiring process. When people read about DreamHost and encounter us, we want them to know who we are. [The values] very quickly attract a top quality person [in the hiring process] – someone who wants to be a part of something like this where it’s built on a mutual respect and being genuine in who we are.

Being present in open source communities has been a huge thing as well. I’ve hired many people for our cloud team over these three or four years that came out of these open source communities – places where we were already participating and contributing. That resonates strongly with people. Being a part of those things in an honest way is a great way to attract people to join you on working on those things as well.

WHIR: Can you share anything about what DreamHost is working on next as you look at the upcoming trends?

LaCour: I think what you’re going to see out of DreamHost in the next 12-18 months is a real embracing of who we are at our core. That’ll show up in terms of embracing open source and empowering people. Following on what we talked about earlier in terms of those market patterns, seeing people move up into software as a service and down into infrastructure, you’ll see us really trying to provide value to our customers along those lines. We’re going to continue to be the best WordPress host out there and I think our customers are going to be really excited to see what we have in the works there. Now that we have this mature and powerful cloud platform some of the things we’re going to be able to do and enable WordPress users to do on top of the DreamHost platform are going to be pretty amazing.