How I integrated Distribute.IT after it was taken down by hackers

The hacking attack that took down Victorian hosting and domain reseller Distribute.IT was one of the most fascinating tech stories of 2011. But even more fascinating was that NetRegistry bought out the company and attempted to get things under control.

It’s been over six months since that catastrophe, and SmartCompany sat down with NetRegistry chief executive Larry Bloch to find out how everything has gone since then.

It’s been awhile since you took over Distribute.IT. What can you reveal about that whole transaction?

We did a deal from talking about having one, to signing agreements and handing over the keys over a 48-hour period, so there was clearly no due diligence or anything. There was very little by way of understanding these systems or customers, and we went in quite blind.

In fact, extremely blind.

How were those first few months?

The journey is probably best described as initially, unbelievably intense. We marshalled all resources we had to focus on Distribute.IT to get it back on its feet and we shifted resources from various other parts of the company.

We also went through a very intense process of communicating with the systems that were in place. The infrastructure was stuffed, so we tried to put systems back together, and that happened in a quick amount of time, so we were able to continue providing a service.

We migrated the entire customer base onto our platform, and that was in the first month of work post-acquisition.

Customers would have been irate.

It wasn’t without its pitfalls. We had people screaming at us, resellers whose livelihoods depended on what we were doing.

What was the process like of getting those customers online?

To some degree from a customer management perspective, I wouldn’t say we were lucky, but we were fortunate. Distribute.IT had been offline for three weeks, so the service we were providing wasn’t necessarily what we were hoping for, but they had something, at least, and that’s a little more than they had before.

That gave us a buffer of getting ourselves to a point where we were able to give them something. It was quite significantly different from what we were used to.

What was it like for your staff, making sure everything was cleaned up?

I think, overall, the interesting part of it is that we had an incredible sense of commitment from all parties within the company to get this done for us. We don’t pay overtime rates here, and they were here of their own volition, staying until 1am, through the morning for a period of some weeks, putting every waking moment into this.

Certainly from my own position I was speaking with customers, sleeping just four hours a night, working all these irregular hours. If you see the Whirlpool thread on the entire incident you can see I was posting there around the clock.

It wasn’t just me. It wasn’t just the executive team. It was the entire team, so it was a good company-building exercise.

How do you approach a situation where you take responsibility for something like this?

When you’re servicing customers with a technology product, you’re not going to be perfect; people have different expectations of how they work. You do get customers that are upset, and feel they’ve been hard done by, that happens to everyone.

In this instance, we had resellers who had their services offline for three weeks, then had us take over, and weren’t getting what they wanted. They were suspicious, and it wasn’t just easy for us to trust them in what we were doing. We were dealing with an extremely difficult scenario.

Do you think you did well?

We got it wrong at times, and those resellers got pissed off. But overall, there was a lot of empathy and concern on our part.

The most important thing was that when we took over in early June, the first two months was really intense, and then everything settled down. The second challenge was that in our own company, we hadn’t gotten over the intensity of the real challenge to deal with.

We got a little complacent in thinking what we had achieved, but really, we got over this first hurdle of integrating the business, and then we had another eight or nine steps to go.

It’s an odd way of acquiring a business. What do you think about it in hindsight?

Usually when you acquire a business you figure out where it fits within the group and determine the business objective; here, it was completely reactionary and we saw an opportunity. Then we started asking ourselves after all this happened, where does the business fit? And without thinking about it, the Distribute IT business has turned us into the largest reselling business in the market.

It’s driven a strategic review of NetRegistry’s business, and in many ways, the platform we use to support everyone within the business. That was a process that was already underway, but this acquisition speed things up more.

And now, what’s the view going forward?

I think we retained close to 90% of the business, and I think although Distribute IT is a fond memory, it’s now a distant one and they have a new path. I think we’ve stabilised everything well, and we’ll continue to do the work.