Playing to your strengths - how IT innovation helps SMEs

Selling video games online is a cutthroat industry in its own right, with several well-established competitors. Simply Games’ web site is critical to its prospects

Online video games store Simply Games has, like many growing businesses, experienced the perils of modern commerce at close quarters. Its parent company, Andromeda Entertainment, went into receivership in 2006, since when Simply Games has emerged ­ – following a management buyout ­ – as a smaller, leaner and more tightly focused retailer, operating solely online.

Today, the company’s leaders are acutely aware of the challenges they face – ­ the internet gives them an opportunity to compete head-on with established high-street retailers; it is also a cutthroat industry in its own right, with several well-established competitors. Simply Games’ web site is critical to its prospects.

“Our business is purely online and is completely reliant on the internet, and our technology spend reflects that,” says Ben Goodwin, IT director at Simply Games.

The company aims to keep margins as tight as possible, which means all aspects of technology support have to be justified. For example, originally the web site was built using Microsoft’s ASP web application framework. Following the buyout, the decision was taken to rewrite the entire site using the open-source PHP scripting language.

“Hosting in PHP was cheaper than ASP and more flexible. Today, there is not much between PHP and .Net, but with open-source software, thousands of people are involved in its development to move it forward,” says Goodwin.

Going down the open-source route has enabled Simply Games to minimise costs elsewhere, too. For example, the firm uses the Fedora Linux operating system on its servers, which means it avoids paying software licence fees.

This strategy has allowed the company to focus its technology spend on areas that can provide competitive advantage. The watchwords for the IT department are flexibility, reliability and security – ­ the differentiators for today’s online retailers.

“We have a dedicated server in a hosted environment provided by UKFast. We have full control of the server so, for example, we are not restricted from installing security certificates, but gain the security and reliability of backups provided by UKFast’s datacentre,” says Goodwin.

Having a dedicated server means the company is not competing with other clients’ web sites for bandwidth or processing power. However, this is a more expensive option than using a shared server.

“A dedicated server costs a lot more than a shared server, which can cost as little as around £20 per month. But it is worth paying for peace of mind over security,” says Goodwin. “For example, if you store credit card details you would not want a shared server.”

Alongside overseeing IT investments, Goodwin has to pay particular heed to how his IT suppliers and partners are serving the business. Sometimes looking for partners that understand the needs of a growing business pays dividends.

A different supplier originally hosted the company server, recalls Goodwin, “but it was a large firm and we found it took time for them to react to problems”.

The relationship broke down a little over a year ago. “The crunch came in Christmas 2007 when there was a problem with the server’s network card,” he says. “It took the supplier two and a half days to fix, but it should have been a 10-minute job. It happened at our busiest sales time, costing us money in lost sales as the site was down.”

Simply Games now pays about £500 per month for its UKFast hosting service. That is nearly three times more than its previous contract, but Goodwin says it is worth it.

“We now have 24-hour support and if there is a problem, UKFast picks up the phone by the third ring. Some small and medium-sized enterprises (SMEs) may be reluctant to pay for a more expensive service, as often startups just focus on keeping costs down, but if your business model relies on the web, you have to ensure the infrastructure is in place and your connection and server are kept up,” he says.