GoGrid, the Disrupter’s Disrupter, Wields an Operations Edge

When Amazon sizes up its rivals inside the Web hosting arena these days, there is likely some degree of poetic justice being levied when the Web giant faces off with GoGrid, a San Francisco–based Web hosting services firm.

After all, it seems only fitting that Amazon — a firm that likes to boast that its Web services put middle-market firms on an equal footing with much larger enterprises — comes face to face with its own middle-market disrupter.

Weighing in at less than $50 million in 2012 revenues, GoGrid fits the trim disrupter profile, and, unlike its larger competitors (which, in addition to Amazon, include plus-size rivals Microsoft Corp. and Google), it can boast that it is a cloud computing “pure play” — a company unencumbered by other businesses or legacy software financial models.

“You now have middle-market businesses that can just use a credit card to procure the same type of IT resources that previously only the world’s largest companies could afford,” explains GoGrid founder and CEO John Keagy, who identifies those “resources” as the scalable IT infrastructure and platforms that companies can now tap into as they grow.

Asked what growth milestone is currently being targeted by GoGrid, Keagy answers: “$100 million.”

“There is a $3.7 trillion IT economy that is being thoroughly disrupted. The market is large enough and the platform is scalable enough that we think this is attainable,” explains Keagy, whose firm’s rich portfolio of Silicon Valley customers might lead you to expect GoGrid to be yet another venture-backed firm.

Appearances can be deceiving, and so it is with GoGrid, which, after investing tens of millions of dollars in software development and securing a rich cluster of patents, remains entirely employee-owned.

“We’re quite a unique beast in that we have managed to build a sensible business with great cash flows that allows us to continue to invest significantly in our technology,” says Keagy, whose earlier career as a builder of Internet Services Providers (ISPs) was similarly punctuated by a strict focus on business operations.

“I’ve been CEO of fast-growing, recurring-revenue, Internet infrastructure businesses for longer than anyone I know,” says Keagy whose operations-minded approach to business is often in stark contrast to that of many Silicon Valley firms.

“There are a lot of businesses that have financial models that are not very clear. Maybe the plan is that someday they will have enough critical mass to sell advertising, or maybe someday their drug will be certified by the FDA, but I have just always run sensible businesses where people pay us for what we do,” explains Keagy, who also likes to speak to the advantages of not having outside investors.

“The benefit is that we have complete flexibility over what we do, and we don’t have a board trying to take us in a variety of directions as the market for cloud computing evolves,” says Keagy, whose operations orientation and keen focus on the costs of doing business have led him to be a consistent critic of GoGrid’s hometown government.

“If you’re a young, hard-charging technologist, the best place to live is San Francisco, and GoGrid has to be here to be competitive in the world of technology … but boy, do they extract a premium for it — this city taxes the chair I’m sitting in,” says Keagy.

Asked how GoGrid can match the resources of its giant Web hosting rivals, Keagy once more brandishes GoGrid’s disrupter credentials: “When it comes to brand name behemoths, we are a predator today. We’re faster, nimbler, more focused, and on offense, whereas they are on defense.”