Managed Web Hosting

    Are all service providers created equal?

by Jonathan Eisenzop

As Internet initiatives become more integral to your company's strategy, your reliance upon your Internet hosting provider will increase. Selecting the wrong provider can put your business objectives in peril—but with many providers offering the same basic services and promising carrier-grade reliability, it can be difficult to know which providers can actually deliver on their promises and your expectations.

The first thing you should understand when considering any managed hosting provider is that you can't necessarily rely on just any provider to give you good, reliable service. It's true that any provider can supply an Internet connection, co-location, and power, but the proof is in the pudding, so to speak.

Categories of Service

To understand the strengths and weaknesses of the wide variety of hosting providers, it's helpful to know their histories. The three main classifications of companies that offer managed Web services are co-location data centers, network services companies, and outsourcers. The table, "Categories of Hosting Providers" shows a list of some of the companies represented in each segment, classified by their core capabilities.

Co-location companies like Exodus, Digex, and UUNet pioneered the Web hosting business by offering a rack, an Internet connection, and power. These companies later evolved to suit their customers' changing needs, offering value-added services like tape backups, firewalls, and server monitoring. Today, most offer a full suite of flexible managed services.

Telecommunications carriers like Sprint, MCI (now WorldCom), and BBN Planet (now Genuity) were next to get in the game. While the carriers were able to offer reliable Internet connections, it would be several years before they could offer the same types of hosting services that co-location providers had been supplying all along. While carriers are generally slow to adopt new ideas, these companies provide a reliable and predictable level of service—though usually at the expense of flexibility.

Technology outsourcers were the last to move into the Web hosting business, but they've arrived in full force. Large systems integrators like EDS and IBM have had many years of experience managing complex data center environments, and managed Web hosting is a logical extension of that business. Outsourcers operate their customers' systems from front to back, usually with a high price tag to go along with the service.

Selection Criteria

The "Core Competencies of Hosting" chart rates the relative performance of these three types of hosting providers based on six basic criteria. I obtained the results from informal interviews I conducted with hosting providers, their customers, and several consultants who specialize in helping customers to select the right provider.

I scored each vendor type from zero to ten in each category, based on the interviewees' responses, with ten being the highest score.

Reliability. This rates the ability of the vendor to provide a stable, fault-tolerant infrastructure. Alasdair Campbell from XIF Communications, who specializes in helping customers select hosting providers, recommends evaluating the provider's infrastructure to see if they offer "N+1" redundancy. This means that every potential point of failure is equipped with a backup system that will take over in the event of an outage, including redundant Internet connections, power, routers, switches, local network circuits, and servers.

Network service providers like Qwest and AT&T, which have already developed rock-solid long distance networks, are now implementing the same quality assurance procedures for Internet hosting as for other parts of their businesses. Their staffs are highly trained, and they typically have multiple contingency plans in place for network, hardware, power, and facilities outages. The result is that you can expect your network to be about as reliable as your telephone service.

Access. The degree to which customers have administrative and network server access varies with each type of hosting provider. In some cases, providers offer limited or very restricted access to servers as a security precaution. This also reduces the likelihood of a customer causing an outage accidentally, which enhances the provider's ability to uphold service level agreements (SLAs). Providers that do allow access will likely offer certificate-authenticated VPN access only. If administrative access is necessary, the provider may be more reluctant to guarantee its service, because of the risk introduced.

Economy. Installation and setup charges for Internet hosting start at under $1,000 but can climb as high as $100,000, depending on the complexity of the configuration. Recurring fees also start in the low thousands of dollars per month and can get close to $100,000 per month for very large enterprise systems.

How economical your service contract will be depends on the level of availability and the number of a la carte services that you require. A critical system that cannot suffer downtime requires a dedicated computer operator, monthly administration, and frequent updates, which will easily cost over $50,000 per month.

When evaluating the initial capital expenditure of the hardware and software plus the monthly cost of dedicated staff members and the Internet connection, a service provider should be able to provide more skilled labor and equivalent equipment at a comparable price point to what it would cost to host in-house.

Flexibility. If the provider has standardized all of its services, your customization options will be limited. The more customization you need, the more expensive it will be to receive top-notch support. Network providers usually limit their customers to a standardized installation, while most outsourcers will be happy to create a custom solution for you (at a significant cost increase). Co-location providers fall somewhere in between. They usually offer the best cost/flexibility combination for companies that cannot afford to hire an outsourcer, but need some special customizations.

Financial Stability. This factor may be one of the most important when selecting a provider, because of the industry's current volatility. The trend toward consolidation is likely to continue for several years. Selecting a failing provider could result in extended outages, as well as significant costs associated with moving your systems to another provider.

Customer Support. Outsourcers provide the highest level of support, though their focus on systems integration and customer support will come at a price. Network providers can offer consistent and high-quality support, but a co-location provider may go to greater lengths to meet customer needs. A hosting company cannot provide the same high-quality resources for every conceivable application in the same way that a network provider offers support for a few select solutions.

Tying the Knot

Choosing the right provider depends on your unique set of needs and expectations. This makes selecting a provider a tough choice, because most vendors appear to offer very similar services. The first thing to do when selecting a managed hosting provider is to determine which of the criteria listed above are the most important to your Web strategy.

If you're simply looking to host a Web site and don't need all the bells and whistles, a co-location specialist like Interliant or Digex will offer the best pricing. Smaller providers may be more appealing for smaller businesses because of cost and a can-do attitude.

On the other hand, a large organization that considers outsourcing a critical part of its businesses will prefer the reliability and scalability only large telecom carriers can offer. Smaller providers won't be able to provide N+1 redundancy (because of high cost), while the carriers that have spent years tuning their operations and constructing high-availability, redundant infrastructures can.

When you order a managed database server from AT&T (for example) you can be reasonably sure that, should your server fail, trained staff with access to an inventory of spare parts and servers will get it back up and running quickly. If you're looking for still more—for instance, if you want to totally outsource an entire e-business—you should look to established systems integrators like IBM and EDS that have a history of providing such services.

Whichever route you go, be careful to select a financially stable provider that will be around in five years. What's more, rigorously examine all claims that the provider makes regarding quality of service by interviewing existing customers. Lastly, make sure that the applications that will need to be supported now and in the future are also the same applications that the provider supports. Once you've chosen a provider, you're essentially locked in for an extended period of time—so choose wisely.

Jonathan is a member of the Ferrum Group, LLC, which offers VoiceXML consulting and training. You can contact him at eisen@ferrumgroup.com.

Good luck in your search, and may your sites be swarmed by traffic!

Charles K.