The Planet Blog

Pass out the cigars. Raise your champagne glass. Make some room in the car. The Planet’s family just got a little bigger. Today, we’ve announced the addition of Touch Support to our team!

Welcome, Touch Support!

Because this news may be a surprise to some, I thought I’d answer a few of the most common questions we expect to hear.

What is Touch Support?

Touch Support is a leading provider of server administration management services. Those “Advanced Services” perfectly compliment The Planet’s unmanaged dedicated hosting solutions by providing our customers with specific server management options like 24/7 monitoring, managed backups, and outsourced technical support, so the inclusion of Touch Support’s team is a natural progression in The Planet’s evolution as the best, most complete hosting provider in the industry.

Why Touch Support?

We’ve seen an incredible demand for additional hosting services from our customers via our forums, at conferences and in regular ticket/call correspondence. Touch Support’s services are based on proven practices and processes, so their expertise can be leveraged to scale those services to our entire customer base.

The complexity of IT infrastructure continues to grow, as does the cost for small- and medium-sized businesses to use these services to maximize their businesses. With this acquisition, we expect to provide our customers with the ability to select from a comprehensive portfolio of advanced services to help them better manage their dedicated servers.

What’s Next?

We plan to make an announcement about our Advanced Services portfolio during the third quarter of this year. It will take a little time to integrate our two companies, so stay tuned. We’ll let you know when we’re ready to announce these offerings.

One more time … Welcome, Touch Support!

I was interested in the recent acquisition of Postini by Google for $625m. Congrats to the team from Postini. I know a few of the guys that are out counting their money right now.

People can argue back and forth all day as to whether this was a reasonable valuation or how much of a strategic fit Postini is for Google. I for one was really surprised by the price, until I saw that it was an all-cash deal. All of my economics profs would always tell me there is no difference in how you choose to fund an acquisition, whether it be cash off the balance sheet, or financed through debt or through stock. However, it seems time and time again companies that generate huge cash balances on their balance sheet are eager to go out and buy with the cash they have.

Public companies that amass a large cash position face enormous pressure to spend the cash. All of that cash on the balance sheet is just dead weight from a valuation perspective. The obvious outs are invest in your company, but that leads to dilution of margin/EPS and hits to market cap; issue a dividend, but that means you’re admitting to the market that you aren’t a growth play; buy back stock, but that is useless unless you use a HUGE amount of cash; or go out an acquire with cash. I’ve talked to numerous executives who feel absolutely handcuffed by these forces. It’s even more frustrating to the guys working at the company who want to do something entrepreneurial from the inside. Having worked at public companies, I’ve personally had proposals shot down since executives would rather acquire than invest internally simply because they hated the alternative uses of cash.

Here is the opportunity and why the cards are stacked in the favor of aggressive startups and entrepreneurs. Simply put, startups and smaller companies provide a pressure valve for these cash-rich public companies that are looking for a growth engine for their businesses. It’s why these guys have VP’s of Corp Dev that are always out scouring the market looking for ways to spend money. These guys are often measured on how many deals they get done. All the more reason to take the jump with the next great SaaS company or media or content service.

Anyone who has worked for a company that’s been acquired knows how tough it can be. I’ve been through it a number of times. The old faithful from The Planet and EV1Servers know this as well as anyone. I know we’re all glad to be able to just focus on growing the business…

- Urvish