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In 1997, four people cramped into a small one bedroom apartment in downtown Chicago put their heads together and tried coming up with a way to make Web hosting a profitable enterprise.
At the time, the Internet had just taken off with thousands of people just starting to use the Net in their everyday lives.
“At the time, I thought that Web hosting would be where the future of information technology is,” says Rho Jun-su. Mr. Rho is today the CEO of Hostway, one of the major players in the Web hosting industry, the business of housing, serving and maintaining files for one or more Web sites of companies that choose not to or cannot maintain their own server. Web hosting companies rent their server to those companies in need and provide maintenance as well.
When the company first started out of an apartment, it had about 100 clients and a sales volume of $30,000. Last year, that figure was $35 million and this year’s target is an ambitious $50 million.
The bulk of the company’s clientele is small or medium businesses with 50 or fewer employees. However, Hostway also counts major companies such as Toshiba, Motorola and Hewlett Packard among its clients.
Mr. Rho was 13 in 1978 when he immigrated with his family to the United States. Raised in a science family ―his father was an engineer ― he studied physics at the University of Chicago and went on to obtain a masters and Ph.D in computer science at the University of Colorado. After graduation he went to work as a programmer for Hewlett Packard.
During his early working days, the notion of starting a business began to shape in his head.
“As I gained some work experience and put it together with theories that I learned in school, I began to see what might be needed in the future,” says Mr. Rho, who is 38. “So together with people I knew from my school days I started a company.”
The company matured after merging with SpectraNet in early 1998. The company was making only $2,500 a month, but Mr. Rho never stopped believing this sector of the Internet industry would someday take off since the idea of Web hosting was still in its infant stages. His forecast was on the bullseye when the IT industry started to boom in 1999.
As the company grew, tempting suggestions of diversifying the company’s business offerings into areas such as IT consulting and planning popped up from time to time.
The company now employs 180 people ― 100 at the company’s headquarters with the rest in four overseas offices. Together they take care of a client base that has grown to 180,000 in 80 countries.
Because the company must attend to clients all over the world, in many different time zones, the 80 overseas employees are divided among three shifts, working around the clock. Unusual work hours and the constant quest for new solutions has created a workplace where casual dress is the norm.
Mr. Rho has plans to expand his business to Korea, not only because it is his home country but because it boasts a superb information technology infrastructure.
“We have always kept an eye on the potential in Korea,” says the CEO. “With a qualified pool of human resources in this area we plan to open up a research and development center.” Mr. Rho envisions the Korea office serving as its East Asian hub, as Hostway plans to open offices in China and Japan by year’s end.
Last year the company bought Goldenchip, a Korean Web hosting company, to establish a foothold in Korea.
Mr. Rho explains that low pricing has catapulted Web hosting companies to new levels of cutthroat competition, so that only companies providing affordable, stable service survive. Having begun out of a small one-bedroom apartment, Mr. Rho seems to have the cost-cutting tools necessary to survive.

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Ethnic Koreans making strides in Silicon Valley

A handful of Korean Americans have excelled in the competitive field of information technology in the United States.
Lee Chong-moon is among that elite group and now is a legend in California’s Silicon Valley. Mr. Lee founded Diamond Multimedia Systems, a graphic-card manufacturing company, in 1982. He struggled for six years to integrate his products so his Apple Computer system cards would run on IBM computers.
Mr. Lee wisely focused on graphics, and in few years Diamond Multimedia Systems outpaced competitors in the graphic-card manufacturing industry.
A decade later, in 1993 and in 1994, Inc. Magazine of the United States named Mr. Lee the “Entrepreneur of the Year” for keeping pace with and capitalizing upon the vast growth of computer games.
Two years later, in 1996, Mr. Lee gave the managerial control of Diamond Multimedia Systems to his employees so he could launch a start-up investment company called AmBex Venture Group.
Mr. Lee since then has since invested in companies focused on the Internet, multimedia and communication equipment. Mr. Lee has recently begun putting money into companies specializing in Internet security systems and high-speed communication systems.
Steve Kim, also known by his Korean name Kim Jong-yun, established the Xylan Corp. in 1993, specializing in the networking equipment the connects computers at offices. He launched his company with six employees, who worked day and night for two years to research and develop network technologies.
The R&D paid off. Xylan began taking increasingly larger shares of business in data routing systems and LAN switches.
Alcatel, the largest communication company in France, took notice and bought Xylan for $2 billion dollars (2.4 trillion won), making Mr. Kim one of the world’s richest men.
Philip Hwang, or Hwang Gyu-bin, became the first Korean-American to have a firm listed on Nasdaq, the over-the-counter stock exchange in the United States, when his TeleVideo had its $90 million initial public offering in 1983. Mr. Hwang has since invested more than $10 million in eight Korean start-ups.
Michael Yang, the CEO and president of NetGeo, launched mySimon, a comparison-shopping site in 1996. He sold mySimon three years later to CNet Networks Inc. for 70 million dollars.


by Kim Dong-sub

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