Operating Environment and Strategy
Mission, Vision and Strategy
In the world of today where it is more common to have a mobile phone than access to clean water and sanitation, the Internet has become truly ubiquitous and universal. We live in the information age and many of the major transformations currently going on in the modern society — covering all fields of human activity from culture and commerce to politics and warfare — simply could not have been possible in the pre-networked world.
It is not just the extent of the transformation that is amazing, also the speed of it is unprecedented in human history. The building blocks of the modern Internet, like HTTP and Linux, started out less than 30 years ago and have now spread everywhere as the invisible fabric that the information society is built out of.
The mission of Seravo is to provide enterprise-grade upkeep service for every customer. We enable our customers to operate efficiently and securely in this new landscape that most businesses are still just figuring out. The way we provide our WordPress service and our Linux expertise services takes the burden off our customers so they don’t have to manage everything themselves in an ever-changing networked environment.
The vision of Seravo is to become the leading upkeep service and open source as a service cloud provider in Europe. We want to help build a world where the entire mankind is connected by a neutral and open web, where culture and commerce flourish, and where everybody has access to pursue new endeavors and to improve upon what past generations have built. This vision includes that the Internet needs to be built with open standards and open source software in the future.
The strategy of Seravo is to focus on superior technology and to use our expertise and reputation in the field to attract both customers and new employees, that value the technical expertise we are famous for. Providing efficient and secure IT services at an affordable price is mostly a technical problem that can be solved by systematically developing and applying the best technology.
Our strategy is heavily focused on continuous growth and one of our priorities is to get the trust and reputation we currently have in Finland to spread to other countries as well. The growth will also allow us to reap some benefits that come with a bigger scale. Scaling our operations is naturally also a challenge in itself, something that we need to focus on next.
Seravo people working on the road.
Seravo has applied the following principles for its success:
- Combining a flat hierarchy with a problem-centric approach. This has led to a culture where all employees are empowered and encouraged to solve problems by themselves, which in turn makes the organization intelligent and adaptive.
- Using a lot of technological solutions. We recognize that a big part of modern human productivity stems from the ability to intelligently use as efficient tools as possible for each individual task. We also encourage developing a deeper understanding of these tools so that they can truly be mastered. For software, we have a strategic emphasis on using open source whenever possible and also in participating in their development to make the tools suit our needs as well as possible.
- Being lean and responsive. Everything in our company is constantly under improvement and anything is potentially under development at any time. Seravo started working with real customers from day one, which gives us a solid foundation of truly understanding the needs of our customers. We maintain a constant feedback loop between the customers, development, and operations, which ensures that Seravo stays relevant and meets our customers’ needs so fast that they are constantly amazed by the level of service that they get. Seravo adapts to the customers’ needs, not the other way around.
Seravo’s competitive advantage culminates around two aspects: superior technology and a clear focus on what the service is and who it is for.
WordPress is one of the most popular content management systems out there today. The scale of the market is at the level where everybody wants to be a part of it. This can also be seen in the hosting scene.
Historically, hosting has been just hosting: selling customers a specific amount of server capacity to use for their own purposes, with the service provider only being responsible for keeping the server up and running. The profitability of the business has stemmed from having as few features as possible and being able to sell to big masses with cheap prices and minimal effort. This has unfortunately led to certain negative effects, such as overselling shared hosting capacity to minimize costs and outsourcing support services to call centers with only a vague understanding of the actual product or service.
With the rise in popularity of WordPress, many traditional hosting providers have started to offer WordPress-specific hosting solutions that fit under the category “WordPress optimized hosting”. More often than not these solutions do not have a clear explanation of what is actually the difference between them and the bulk services that were previously on offer. In reality, many times there is none: the actual hosting is exactly the same, except that it now comes with the name “WordPress” attached and the content management system readily installed.
In addition to the traditional hosting providers, there is another segment of service providers that call themselves “Managed WordPress Hosting”. They tend to be slightly more directed towards WordPress with some specific features, such as automatic updates or some more advanced optimizations. These providers are mostly international operators and in a few markets, they have gained fame and status.
However, none of them is quite like Seravo and for that reason, Seravo has a real chance of challenging them. We don’t identify as just another managed WordPress host, or a managed WordPress hosting provider at all. What we do is a premium hosting and upkeep service for WordPress.
Compared to all other types of hosting, one of the biggest differences in Seravo’s way of doing things is that it’s generally really easy for customers. When they make an order, they will be given credentials directly to a fresh WordPress installation with a valid SSL certificate. The site will be located in a container of its own with its own files and resources, and on servers that are specially optimized for WordPress speed, scalability and security. No more “one-click WordPress or SSL certificate installations”. With Seravo you will need no clicks at all.
And that’s not all that we do:
No Resource Limits, Temporary Suspensions or Overage Charges
Some companies, especially in the shared hosting business, temporarily suspend their customers’ sites or limit access to them if they should reach their plan limits. Seravo never does that as long as the invoices are paid in time. We won’t shut anybody’s site down in case of a traffic spike, instead, we put on an extra effort to make sure that everything works and applaud the customer for a job well done. If the plan limits are exceeded regularly, we’ll reach out to the customer to explore different options to guarantee them the best possible service for their growing needs.
Seravo makes sure that our customers’ websites are always secure to use: all of our hosting and upkeep plans include regular updates for WordPress, including plugins and themes. It’s not uncommon that site owners avoid updating their site because they are afraid that an update might break something on it. Even minor updates, such as updating a plugin, might cause some functionalities to stop working. Seravo’s customers don’t have to worry about these side-effects as our updates include comprehensive testing. There is no bulletproof system to eliminate all possible issues, but our solution will considerably reduce the number of them.
24/7 Monitoring and Upkeep
Thanks to around the clock monitoring, Seravo is able to respond to issues fast and restore websites quickly. If any problems should occur, Seravo will know about them immediately. Our on-call system operators will check the situation and most of the time, also fix the problem. If any action is required from the customer, they will be notified.
Our platform comes with built-in technology for security, which means that our customers do not need to install any additional plugins to secure their sites. In addition to regular updates, 24/7 monitoring, security scanning, and DDOS and brute force protection, we also have a security guarantee: if our client’s site gets hacked despite our efforts, we promise to clean and restore it without any extra cost.
We’re not web hosting technicians. We don’t do level 1-3 support agents. And we definitely don’t outsource our support. Our Customer Success team consists of experienced WordPress professionals that work closely with our clients every day to ensure they are getting the most out of their WordPress sites.
Another proof of Seravo’s expertise is that we do not only maintain systems for our customers. We also participate in developing the actual building blocks of the Internet and indirectly maintain systems for the entire world. We don’t just follow best practices, we are among those who define what the best practices actually are.
Seravo manages to more than hold its own when compared to other WordPress hosting platforms.
Speed is a known issue that many try to tackle on their WordPress sites. According to an analysis done in June 2019 by Chrome developers working for Google, sites managed by Seravo outperformed the traditional industry leaders in speed. The analysis was based on time to first byte (TTFB) results, where the percentage of sites with TTFB under 200 ms was much higher at Seravo than at the competing services. This is due to Seravo’s commitment to the performance by having built our own server infrastructure from the ground up.
A Clear Focus on Customers
Seravo has different types of customers who benefit from Seravo’s solutions differently. It has been clear for us from the start what kind of problems our customers need to solve and our service has been built around those.
The reason why small businesses and entrepreneurs turn to Seravo’s services is mostly that they have neither the time nor the knowledge to take care of the upkeep of their website themselves. This is why they are happy to use a ready-made solution, which gives them the possibility to fully focus on creating content to their website and building their business.
More technical customers, like advertising and web development agencies, profit from our latest technology and advanced tools that make their development process smooth and easy. While these organizations focus on designing and building websites they may not care to invest their resources into the upkeep as well. For example, updating the websites and organizing a 24/7 monitoring service requires a lot of resources and knowledge that these customers feel can be better used elsewhere. For them, Seravo is the one taking care of this part of the business, acting as their strategic partner.
Naturally, Seravo can also offer major benefits to large businesses and international online stores which otherwise would need their own IT department to do the upkeep. Seravo offers a comprehensive solution where everything is taken care of, making the solution an easy choice for these customers. Seravo has a long history of operating with these kinds of customers. All of our processes are aligned with the important security needs that these kinds of actors might have. Functionality is especially important for e-commerce site owners since any downtime in the service costs them money in a very concrete way.
Seravo’s 24/7 service is a good guarantee that everything will work as it should and that every issue is dealt with right away.
Seravo maintains a tight feedback loop between customers, operations, and development. Seravo’s business focus has been specifically chosen to keep in mind our customers and their needs.
Attending FOSDEM in Brussels is also a good opportunity to focus on solving some tricky problems.
As the company’s headcount grows, we have recognized the need to establish more internal structures and processes. The first organizational unit, the Customer Success team, started operating officially in January 2019. In fall 2019 we rolled out two additional teams: Growth and Systems.
The Customer Success team focuses on providing excellent support service to our customers, as well as providing customers with information and documentation to make the most of their WordPress sites. The Growth team focuses on marketing and sales, and the Systems team is responsible for running our infrastructure. All teams include developers; there is no separate development team. All teams are delivery teams, meaning that they both develop and run their processes and tools to ensure everything the teams deliver is constantly improving.
Seravo maintains an internal handbook, a 70+ pages long document that defines all core company processes, along with a lot of auxiliary documentation such as employee handbooks, security manuals, and communication guidelines. These are an important part of growing and developing a company that is able to consistently improve in everything it does.
In the past Seravo’s main focus has been in developing a stellar product and service. The success in recent years has proved that our product is very good. While we continue to develop it constantly, the focus of investments is shifting more towards marketing and sales in order to expand our reach.
Stockholm sightseeing the Seravo way – with a bus that’s also a boat.
Seravo’s first Swedish employee had been with us in all of 2019. Based in Stockholm, he represents Seravo in Sweden, driving marketing and sales while also gathering information about the local needs for adaptation that the service might have — information that is passed on to our development.
During this time we’ve got 53 new orders, moved our Swedish cluster to a faster and more environmentally friendly data center outside of Stockholm, and the average amount of visitors on seravo.se has almost doubled from on average 150 sessions a month in 2018 to 293 sessions/month on average in 2019. In terms of marketing activities, we have participated, hosted, and hosted seven WordPress meetups in Stockholm and Gothenburg and for example, sponsored the Swedish WordPress community as well as the WPSE newsletter.
Growing our sales on the Swedish market has been a bit slower than expected and it is clear that continuous improvements to our marketing in general and specific sales activities will be needed to succeed in our growth. The Swedish market will require increasing investments in the future allowing us to establish our position there and increase our Swedish sales.
In parallel to expanding to Sweden, there are also other ongoing efforts for internationalization. Seravo’s target is to grow our visibility and our customer base in other Northern and Central European countries, such as Estonia and Germany. That will also require smaller investments in the upcoming years.
Market Outlook and Operating Environment
WordPress, Linux, and other open source software that we have expertise in continues to grow in popularity. The demand for services built around these systems is clearly exceeding the supply.
According to recent statistics by Automattic, over 33% of all websites run on WordPress. The web industry customers range from individuals looking for cheap and simple solutions to global companies with enterprise-level needs. In the low-end segment, there is increasing competition with services such as Wix and Squarespace. The introduction of the Gutenberg editor however significantly enhances the ability of WordPress to compete in this segment with the promise of ease of use. On the e-commerce side, WooCommerce is gaining popularity. Recent studies in Finland show that WooCommerce – and open source solutions in general – are appealing to big e-commerce site owners thanks to the features and flexibility.
With the increasing popularity of WordPress, many traditional hosting companies have started to launch their own services for managed WordPress hosting. The WordPress business of these large players looks very much like their traditional hosting services as they mostly compete on low prices.
There are also smaller players in the market such as Kinsta and Pagely, that have taken another angle on how they produce and market their services. Like Seravo, they have a higher price point combined with a more extensive service and guarantees to the customer.
Seravo has long been the market leader in WordPress upkeep in Finland. During 2018 increased activity could also be seen in this market. A small player previously known as Vanhatapio got acquired by a larger traditional hosting provider, Zoner. The resulting service was named WP-Cloud and given a marketing budget with the apparent intention of getting a piece of the market. An interesting detail is that their marketing message and value proposition is almost word for word similar to the one of Seravo. It’s a good indicator that we know the market and have a good service in our hands when others want to copy it.
Recent performance benchmarks have shown that the websites run by Seravo are on average faster than those of competitors, even though a big part of our competitors’ promises revolve specifically around speed. Seravo also differs from others by providing a 24/7 site monitoring service for all websites in our upkeep, as well as a security guarantee, which further strengthens our position in the market.
Seravo’s main challenge lies in advocating professionals in the field to demand more from their service providers, which in turn would lead to them choosing a provider like us. Instead of using providers that only sell server space and resources, they should go with a provider like us that is able to promise that their website will actually work at all times and with any amount of traffic it has.
Risks and Uncertainties
There are no significant risks on the horizon, nor any major uncertainties in the market or in Seravo’s situation. Seravo has no loans nor any risk capital. Our cash reserves are fairly strong and efforts in growth and expansion have been balanced and constantly profitable.
||Evaluation and Mitigation
|Major security breach
||Seravo’s stack consists of either open source software or in-house software. The likelihood for backdoors is low and a culture concentrated on security ensures that possible vulnerabilities are patched quickly and operational procedures are well designed.
|Major SLA breach and extended downtime
||The current sites are spread across seven independent data centers and there is redundancy inside each cluster. There are offsite backups available as a last resort.
|Lack of staff, overload
||Because Seravo is growing quickly, the amount of work is increasing. However, so far there has been a steady influx of new employees and the retention rate of current employees is good. Seravo’s reputation as an employer is also good.
|Stress, loss of productivity
||Our company level requirements for quality are high and many employees add to that by keeping high standards personally as well. This can cause stress in a constantly developing and changing landscape. Handbooks and documentation is maintained to give structure to work. The degree of automation is also constantly increasing, which reduces the amount of repetitive work and increases motivation.
|Sudden loss of customers
||The current customer retention rate is high and customers are in general very happy with the service. There is little pressure to change pricing or do anything else that could push customers away.
|Sudden change in the business environment
||Finland is a stable society and the industry Seravo is in is not sensitive to macroeconomic changes as an online presence for companies is mostly driven by necessity.
||Seravo contributes actively to open source projects’ upstream and thus has very good insight into how the technology evolves. Completely novel solutions to how to provide the service are highly unlikely and if they happen to emerge, Seravo has the capacity to adapt to them quickly.
Possibilities for the Future
Even though there are some big players in the managed WordPress hosting scene internationally, there is no other company offering exactly the same level of service that Seravo does. This gives Seravo a good chance to expand into the international markets.
There is also a clearly visible trend that companies are increasing their investments to their online presence. This means that the demand for more extensive services such as the one that Seravo provides is growing and that the higher price point is not a problem but a well-thought strategy to succeed in this segment.
We have the level of automation in our service to be able to make it available to an ever-growing customer base without difficulties. With targeted and well-executed expansion efforts Seravo has a very good chance of growing into a major European service provider in its field.
Don't worry. That's just our crew trying out improv.
In 2020, Seravo’s growth in Finland has continued much like it did in 2019. The growth in turnover for this year is estimated to be 25%. Our investments in new markets, mainly in Sweden in the form of a Swedish workforce, can potentially increase revenue growth even more. It is possible, however, that the constant investments for growth may decrease the operating margin to some extent.
At the time of writing, we are also amidst the COVID-19 pandemic. It may result in an increase in online business, but it is also a major risk to the macroeconomic situation and is prone to hurt businesses that have the digital part of their operations in a minor role.