Articles: Web Hosting Rises from the Ashes

Web Hosting Rises From The Ashes

By David Haskin
July 18, 2003

Most small businesses these days try to use the Internet to compete more effectively. The trick, however, is to accomplish that goal without spending too much of your precious money and time.

That's becoming increasingly possible, according to some experts. You still must hire somebody to create and update your website. However, prices for hosting your website are falling rapidly, which will enable small businesses to create sites that are more sophisticated. Hosting services provide the computers, or servers, on which your Web site is located.

Most small businesses typically use so-called shared servers in which your website shares a server with the sites of other companies, according to Steve Dauber, vice president of marketing for Ensim. Shared servers typically cost between $10 and $50 a month, he noted.

A better solution is to have your own, dedicated server, but that previously was too expensive for many small companies — typically about $200 a month, according to Dauber. His company develops software to help manage both shared and dedicated servers.

"Now that price is coming down to as little as $100 a month," Dauber said. "And I'll bet it'll get even lower."

Dedicated servers have many advantages, Dauber said. But, he cautioned, they also create new challenges.

Opportunities and Challenges
Dauber noted that dedicated servers are faster and more secure than shared servers.

"If you are sharing a server and another company's site gets a lot of traffic, your site will slow down," Dauber said. "And shared servers aren't always secure."

Those are among the reasons that Aaron Byrne, a Web designer for Northeast Wisconsin Technical College in Green Bay, Wis., said his small organization recently switched from a shared to a dedicated server.

Besides the advantages cited by Dauber, Byrne said his hosting service provider is better able to support dedicated servers.

"When issues arise, we get great response time (from the service provider)," Byrne said. "If the Web site goes down for some reason, they're on it in minutes."

Perhaps more important, though, Byrne said he can create more sophisticated Web applications and data because of the increased speed and storage capacity of the dedicated server, according to Byrne.

However, one challenge is that dedicated servers are more complex to manage. Byrne, for example, develops websites and, like many developers, is not trained to manage Web servers. Nor is he familiar with Linux, the operating system used by the dedicated server, or Apache, the software that administers the Web site. Large enterprises typically hire personnel for those tasks, a luxury few small businesses have.

As a result, Byrne said he uses Webppliance Basic from Dauber's company, Ensim, to manage the Web sites hosted on a dedicated server. The product isn't sold to users like Byrne but many hosting services make it, and products like it, available as a service to users.

"The program (Webppliance Basic) means you don't have to hire an IT (information technology) person or a consultant," Byrne said. "It's simple enough that you can administer services on the server and do things like restart the server. That's a two-minute chore that, if you don't have something like (Webppliance), you have to call somebody in. Now, it's just a couple of quick clicks."

Other capabilities of the program include being able to grant permission for those who can upload parts of Web pages, control the size of logs that list server activity and set other server parameters. It operates via a Web browser so anybody with Web access and access rights can use it.

"If I had to learn (Linux), I'd have to go to school for weeks," he said.

Byrne and Dauber agreed that using a product like Webppliance isn't for technical neophytes. However, it is usable by those who are interested in technology, even if they have non-technical jobs in a company, they agreed.

Better E-Mail
Dauber predicted that lower prices would lead many, if not most, small businesses to dedicated servers for their websites. However, the rise of dedicated servers has one additional benefit, he noted. They make it easier for small businesses to afford and manage enterprise-level e-mail products like Microsoft Exchange and Lotus Notes.

Products such as these, which are staples in large enterprises, support group e-mail, calendaring and other functions. In larger enterprises, these applications typically are found on servers located within the company and are managed by internal IT personnel.

However, the lowering price of dedicated servers combined with products like Webppliance Basic, which can manage these products, means that smaller companies will be able to afford such applications. That's particularly true with Microsoft Exchange Server 2003, which Dauber said has more tools than previous versions for operating from dedicated hosted servers.

"Most small companies have their e-mail services hosted (by an Internet Service Provider), but there comes at time when you need something like Microsoft Exchange or Lotus Notes," Dauber said. "It's different for every company, but the sweet spot for that is when companies get to about 50 employees."

Byrne said he isn't involved in his institution's e-mail, but a dedicated server has enabled him to create more sophisticated Web sites. That's possible both because of lower costs for dedicated server and products like Webppliance Basic.

"This takes all the features you need as an administrator and makes them very easy," he said.

Aside from saving money, the company has seen increased productivity, since valuable IT staffers are able to concentrate on projects that are more strategic to the company than keeping a Web server running. "We don't have to worry about our bandwidth issues internally, we don't have to do any vendor management," Austin says. "It's just one less headache to deal with. We can focus on executing our marketing initiatives with the brands."

Still, despite signs of growth, Web hosting alone hasn't been enough for the big vendors to get back on their feet. These days, you can get your site hosted by any mom-and-pop Internet firm for $20 a month. So major hosting vendors have had to develop and offer more advanced products and services.

One service the vendors have capitalized on is managed security. On top of hosting your site, they'll do everything from building and deploying firewalls to protect your network to scanning your Web pages for vulnerabilities. Users say that being able to rely on a pro for security makes them much more confident.

"It's cheaper, more dependable, and more robust," says Ralph Chin, director of IT and Web-hosting applications for BigMachines Inc., which makes software for industrial equipment manufacturing. "They're able to shield us from a lot of the denial-of-service attacks. The most recent attack on Microsoft SQL Server didn't affect our network performance that much."

Some vendors are also pushing content-delivery services using overlay networks that cache popular or unwieldy Web content on servers closer to those requesting the content, which can speed up Web performance and reduce network congestion. "It offloads the traffic off your architecture," Austin says. "If you have high bandwidth utilization, instead of beefing up infrastructure, you can push the content to end nodes. If a customer in Japan is trying to access one of our pages, we can put that content at a node in Japan rather than have that consumer come all the way back to our servers in Reston, Va."

Backup and storage services are also drawing increased interest. Web-hosting providers will back up a customer's Web site and related information or even unrelated enterprise data. Not only do businesses benefit from having a secure, off-site copy of critical records, they also save a lot of time and money, the vendors say. If you want to do reliable backup on your own, they argue, you're going to have to keep a trained technician sitting around your office, doing nothing most of the day--not a cheap prospect. P&G already is backing up more than a terabyte of data a month, Austin says, so these services could be valuable. "A lot of data we have is critical," he says.

Add-on services and functionality are helping bring the Web-hosting market back to life. But this could be just the infancy of a new kind of Web hosting. The future may be a utility model, in which customers pay only for the bandwidth they use and are able to turn servers on and off as needed, depending on how many people are hitting the site.

That sort of pricing has appeal because it can save companies money, Austin says. "A utility model is the next wave of how this would be managed," he says. "Hosting is slowly approaching a commodity."

GolfServ likely would save a fortune if it were able to increase and decrease bandwidth at will, Caspar says. "During the Masters golf tournament, we get five times the traffic we would on our next highest day," he says. "On the other days, we're only running at 5% capacity. We can probably run 99% of the time with a few less servers. That would save us a lot of money."

For business-technology managers, there's a downside to the growing health of Web hosting: higher prices. Now that the hosting glut is gone, providers are starting to increase prices. Years ago, "a lot of providers were just desperate to keep people in the data centers," Gartner's Chamberlin says. "But now they're realizing they've underpriced their services." In the next two years, prices are likely to increase as much as 15% annually, he says.

Even so, customers still have plenty of leverage and can negotiate good deals.

"Over the last 12 to 16 months, customers have had a lot of power," Chamberlin says. IT managers have been in a position to almost "dictate terms of agreement, set the pricing they want." He recommends that companies thinking about Web hosting strike deals now before prices jump. Businesses already working on Web-hosting agreements should act quickly to get the best deal possible. "I'm telling clients that if you're in the process of contracting and you've got a good price, think about a price lock-in for the length of the contract."

BigMachines' Chin agrees. "There's power now for users. The value of each and every customer has increased," he says. "Years ago, it was OK to lose a customer, because 10 more were at the door. Today, they need you."

"We do have leverage now that hosting's becoming a commodity," P&G's Austin says. "The ball is in the vendor's court to provide quality service, because we can go off and get hosting elsewhere."

There's one more major benefit that comes from hiring someone else to host your Web site. It's the vendor's responsibility to evaluate and deploy new hardware and software to ensure that the hosting services are state of the art. "The rule of thumb is that technology changes every six months, and if you do things internally, you have to be serious about it," Austin says. "Outsourcing and hosting allows us to be competitive in the market because we don't have to build that expertise and maintain that expertise internally.