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Far and Wide

A staff meeting at Arvixe is what you might call unorthodox. Dotted across the globe, the 10 full-time employees and dozens of part-time contractors of the Calabasas firm gather around their computers, using Skype and screen sharing to communicate – in an almost entirely virtual workplace. Even for a company that hosts websites, employees found the process a little disorienting. “It freaked us out in the beginning,” said Kevin Bromber, general manager of Arvixe. “But as we went forward we saw how efficient it is.” And how it struck a chord with clients. The company topped the Business Journal’s annual list of Fastest Growing Private Companies. Revenue hit $5.4 million last year, a 414 percent increase since 2009. Large companies such as Go Daddy Group Inc. and Yahoo Inc. dominate web hosting, but the industry is flooded with smaller companies that provide users with server space to store their data and host their websites. Arvixe successfully competes in this crowded industry by offering inexpensive service with good customer support – something it can pull off given its low fixed costs and a partnership it has with a French software firm. In fact, with its few employees and just one small local office, Arvixe is the very model of the modern company that experts have been predicting since the Internet revolution. Arvixe offers website hosting for as little as $4 per month with unlimited data transfer and disk space. Competitors, including GoDaddy, offer similarly-priced entry plans, but with less disk space and data transfer. And prices often go up after an introductory timeframe. The customer support is provided through a proprietary back-end Internet structure, which allows its employees to be in close contact with datacenters and customers – despite their different locations. “What Arvixe has done is use the technology to keep their overhead low and keep their prices low,” said Siamak Farah, chief executive of InfoStreet Inc., a cloud services company in Tarzana. “That puts them in a pretty spot right now.” An Unusual Start Some of the most storied beginnings of technology companies involve college dorm rooms, but few start in the bedroom of a high school student, as did Arvixe. When founder Arvand Sabetian was 17, he figured out he could buy space from a larger server and make a few bucks by reselling the space to the small businesses for which he was designing websites. “I knew how to make websites and was doing some of that,” said Sabetian, now 26 and the company’s operations manager. “So I started hosting as a reseller, too. You don’t need a lot of startup funding to do something like that.” When he left Santa Rosa to attend Cal Poly San Luis Obispo in the fall of 2004, he took his business with him, which was easy because management of the websites and server space was done remotely. He expanded slightly, taking on more customers as he could, and did some advertising. He managed to pay his way through school with the proceeds of his labor, and graduated in 2008 with a degree in civil engineering. Sabetian moved back north, taking a job at a civil engineering firm in San Francisco. But after two short months, he quit his day job to focus his energies on Arvixe. “I was on a good track and quitting was tough,” he recalled. “Quickly, when I looked at it, I saw it was something I needed to do.” In 2010, the company attracted the attention of an outside investor. Bromber, 44, is an entrepreneur who had established an e-greeting card company in 1996 that he later sold to Mattel Inc. At the time he met Sabetian, Bromber was an employee of Avanquest Software, a French software firm that had begun buying up and investing in technology companies. He knew the best route for expansion was in web technology, and was particularly interested in web hosting. “We were looking for companies with online recurring revenue,” Bromber said. “I went cold calling.” When he came upon Sabetian, Bromber decided to bring Arvixe into a partnership with Avanquest. Both declined to comment on the financial terms, but said it is a partnership. Sabetian is in charge of the product, and the larger company provides marketing, legal and infrastructure framework. “The way I looked at it, that was the next step for me,” said Sabetian. “It was time to let other people put their necks into other aspects of the business.” Side of a lake Each morning, Bromber makes the trek from his Tarzana home to Avanquest’s office across the street from The Commons in Calabasas. He is the only employee of the company to do so. Sabetian lives in Napa and travels to Calabasas every few weeks. The other employees work from anywhere in the world. “We have one guy who travels around the country in his RV,” Bromber said. “He uses his phone to connect to the Internet through his LTE service and does his work from where he is – by the side of a lake or wherever.” While the company’s arrangement may be unusual, Bromber said the infrastructure Sabetian developed makes it nearly impossible for anyone to shirk responsibilities. The software allows the company to track call times, customer service requests and server usage at the click of a button, from anywhere with Internet access. That gives Arvixe not only an operational advantage, but a talent advantage, Bromber said. “Think about it. We’re no longer limited to a five- to 10-mile range in looking for talent,” he said. “We can go out and get the best talent no matter where they are in the world.” Currently, Arvixe has more than 3,000 customers, many with multiple websites. Much of its growth has come from web developers who refer it business. “Their job is to make websites. So if they use Arvixe for one and they like it, they’re likely to use it again,” Bromber said. Still, Tony Williams, president of Global IT Communications Inc., a Whittier Internet services company that offers web hosting, said Arvixe may have to expand its offerings in order to keep up its strong growth. Currently, Arvixe only offers technical support for its websites, but does not offer broader IT consulting services, something Williams said has been key for Global IT. “Because of our experience in hosting and other things, our clients have asked for additional services,” he said. “We’re filling those holes for them and taking over a lot of IT administration for some companies.” However, both Bromber and Sabetian say Arvixe is in a good position right now offering its basic web hosting services. “There may be bigger companies and there might be smaller companies,” said Sabetian. “But we’ve been going after these niches, and we’re going to keep doing it.”

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