Disinfecting Hospitals, Impacting Healthcare: Morris Miller, CEO of Xenex (Part 4)

Sramana Mitra: This is a time frame when the Internet is starting to happen. What happens next?

Morris Miller: For the year after the sale, you become an indentured service where you have to stay around because the acquirer wants to know that there’s going to be a complete transfer of knowledge. But they don’t want you interacting with the employees much because they want the employees to become loyal to the new owners. This guy on my advisory board  asked me what I want to do. I told him, “I’d like to work on some Internet related stuff.”

Basically, that’s what I did. We put one of the first religious catalogs on the Internet using an Access database. We had to generate HTML pages so that they could be crawled. We had a rudimentary shopping cart whereby we would give a cookie to the shopper and we could track what they were doing on our site. Then, we amalgamate the orders submitted and get it done. That is really what we worked on during that year. Do you remember the Ascend Pipeline 50 routers?

Sramana Mitra: No, I remember Ascend, but I don’t specifically remember that model.

Morris Miller: These Pipeline 50 routers basically bond in ISDN lines, right to your 264-k lines. That was considered high-speed Internet at that time.

Sramana Mitra: I do remember those days.

Morris Miller: People used to come from around the city to see what high-speed Internet was. I could bring them up to my office and they’d watch me operate the computer and interact with the Internet. It was mesmerizing for them.

For the next three years, we had a child and I spent time with my kid. That was our chance to explore the Internet and think about what opportunities are out there. We met the founders of Rackspace. At that time, it was called Cymitar and was basically Richard, Pat, and Dirk. Talking to Richard, I said, “Basically, we want to light up all of the office buildings around the country.” I thought that all of them are going to want this high-speed Internet experience. I understood the privacy issues that they were going to face. We were interviewing people who could help us build firewalls that would separate the offices.

These young founders of Cymitar said, “We have an idea that’s better.” We got to a point where they trusted me and they shared the idea for Cymitar, which was putting these servers on a rack for companies that couldn’t do it themselves. I had just done that for the religious catalog and I knew it was really hard. Doing it as a service, especially with a recurring revenue like what we had done in the legal publishing business, was great. My only caveat was, “You have to find a better name than Cymitar.” They said, “Why?” I said, “Nobody knows how to spell it.” They came back three weeks later. They had sold eight servers and had $4,000 a month in revenue. They came up with the name Rackspace. Where it had taken two years to raise capital for the legal publishing company, I agreed to write them a check in two weeks.

This segment is part 4 in the series : Disinfecting Hospitals, Impacting Healthcare: Morris Miller, CEO of Xenex
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