Lanham Napier
CEO
Rackspace

Things go wrong in computing. Anyone who uses a laptop knows that. It doesn’t matter whether the computer hardware and software you use are located in your home or office, or miles away in the data center of a hosting company that allows businesses to buy computing services cheaply by the hour, the way they buy electricity. Things go wrong either way. Why is it, then, that so many of the sellers of computer hardware and software and hosting blame their customers and hide from them whenever there’s a major service glitch?

Consider the incident recently (10/11) in which a power failure, during routine maintenance, blew out at an IBM

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[IBM  Loading...      ()   ] data center in New Zealand, crashing the computer systems of New Zealand Air. That outage tangled airline service for hours and inconvenienced some 10,000 travelers. Air New Zealand’s CEO described IBM as “unwilling to take responsibility” for the incident. Consider also the recent hosting screwup by Microsoft

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[MSFT  Loading...      ()   ] that vaporized the contacts and other information belonging to hundreds of thousands of users of Sidekick smart phones. Or the hours-long shutdowns of Gmail

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[GOOG  Loading...      ()   ] last month. In both cases, the vendors were largely inaccessible to customers and slow to explain what was happening.

The issue here isn’t outages. These things happen. They don’t happen often.

But these days, our lives and our work are so dependent on instant access to digital communications that we find any interruption highly disruptive and personally upsetting. At moments like that, we of course want our service restored. But we want something more. We want to be treated like adults, and like valued customers. We want our vendors to tell us immediately what’s going on. We want them to answer our phone calls and emails. We want them to take responsibility for fixing the problem.

At Rackspace, we’ve had our share of outages. Two years ago, a truck smashed into a power source for our main data center and interrupted service to many of our customers for a couple of hours. Then last June, we had two more outages of about 20 minutes each, caused by a lapse in preventive maintenance.

In each case, our company’s character was put to the test, and we were determined to pass that test. We owned the problem. We immediately shared the bad news, directly with each customer and also with the world. We called in all of our employees, including top executives, to reach out to individual customers. We went so far as post videos about the outages on YouTube. Once we had restored service, we gave the affected customers millions of dollars in service credits.

Each outage was a painful event in which we had failed to honor our promises to customers. Each one required long nights and weekends at the office. But the pain motivated us to improve both preventive measures and the overall level of care that we provide to our customers, which we call Fanatical Support.

Providing great customer service is expensive and difficult to deliver in any industry, and especially in technology, where you’re looking to hire brilliant geeks who also have a pleasant bedside manner. Not surprisingly, many tech companies have decided they’d rather compete on features and price. A former executive at Amazon

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[AMZN  Loading...      ()   ] (whose web-services division competes with Rackspace in hosting) actually wrote a book called “The Best Service is No Service: How to Liberate Your Customers From Customer Service.”

Many tech companies try to automate customer support. When things go wrong, many send their customers to lists of Frequently Asked Questions. Or to phone banks answered overseas where reps read from soothing scripts and lack the expertise or authority to solve problems. Or to chat rooms where “users” are supposed to seek answers from other frustrated “users.” (By the way, have you ever noticed that tech companies and drug dealers are the only ones who refer to their customers as “users”?)

This “denial of service” business model is, I believe, doomed. The new edge in technology will belong to the companies that invest over the long term in earning the trust of their customers.

For decades, tech vendors have pushed their “solutions” onto customers. But now the customers are insisting on being served the way they want to be served. For decades, tech vendors have put the burden of performance on their customers. The vendors took the view that they just built the stuff, and if something didn’t work, that was the customer’s problem and probably his fault. But now customers have decided they don’t want to buy technology in a box; they want to buy an outcome. They don’t want a vendor. They want a partner – someone they can talk with, who will tell them the truth and work with them when things go wrong, as things always will.

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Lanham Napier is the CEO of Rackspace US (NYS:RAX), an IT hosting and cloud computing company. His company has had a 230% increase in stock prices over the current 52-week period.