Whitepaper: the real price of web hosting packages.
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The real cost of web hosting.
How you can measure the financial benefits of fully managed hosting, semi managed hosting and in house hosting.
As your business grows, the challenges presented can be numerous including the need to expand and change your websites. You may find yourself wanting more from your website hosting environment in order to maintain a stable, secure online presence. This whitepaper is written to help you understand the differences as well as the financial benefits of different hosting solutions. Managed hosting is a coordinated, comprehensive solution to address many of the time consuming tasks facing small- or medium-sized business (SMB's) seeking a bigger a presence on the web, particularly those without the necessary expertise or in house resources to maintain and optimize their own servers. Semi managed plans offer a less expensive option in comparison and are also scalable, flexible and able to deploy services quickly.
Overview of Managed Hosting
The Demand for Managed Hosting
Businesses are finding the cost and complexity of hosting keeps rising due to a variety of reasons. These include everything from domain management, expanding server loads, ongoing software updating and security monitoring, to increasing demands for messaging encryption, archiving and reliability. In addition, the critical nature of backups and data protection/restoration in the event of power outages and other disruptions must also be addressed. Issues site owners are confronted with include:
- Difficulty managing increased messaging, maintaining email functionality, data retention
and protection against spam, phishing, viruses, worms, spyware and other threats.
- Understanding complex DNS services, DNS records configuration and management,
administering multiple domains and vulnerabilities from DNS-based buffer overflow attacks.
- Time-consuming server and software patch management, consistent, regular OS patching to
minimize exposure/vulnerabilities, controlling and managing software and security updates.
- Growing storage, data backup and data recovery requirements demanding continuous data protection, incremental backup and off-site data management (SQL, Exchange, SharePoint, CRM).
- Attention- demanding network and security management including firewall configuration, scanning for malware, check sum changes in software on the server, bandwidth and port monitoring to assess ongoing risks.
- Disaster recovery and business continuity necessitate protecting against loss of sensitive data and network connectivity, suffering downtime, reboots, service failures, power outages and other disruptions.
Server Hosting Defined
How do fully-managed and semi-managed hosting compare to other available types of hosting? Here's an overview:
Co-Located Hosting involves the purchase of a server from a hardware vendor; the server is
then delivered to a web host and connected to the host's network and redundant power systems. The host is responsible for the network, while server owners are responsible for hardware support, maintenance and software updates. If hardware fails, the customer must ship new hardware to the data center resulting in potential long periods of downtime outside of the Service Level Agreement (SLA).
Unmanaged Dedicated Hosting is similar to co-location except the host owns the hardware, while it is the customer's responsibility to manage and administer its operation. Support contracts may be available, but it generally falls to the customer, not the host, to install and update server software and OS patches, data backups, monitor security, manage email, etc. In this scenario, the web host is responsible for failed/defective hardware, network and power systems.
Managed Services involves leasing one or more servers from a host, who then proactively provides support and maintenance on that equipment, usually backed by quality guarantees. Additional services provided by experienced system administrators on staff commonly include server uptime monitoring, OS patching, operating system restores, security monitoring and more.
Managed Hosting 2: North America Overview Winter 2010 (December 2009)
As SMBs expand their web presence and make more use of web-based applications, their infrastructure will get increasingly complicated and difficult to manage. Strain on internal IT will intensify and the cost to outsource management will skyrocket. In short, growth and expansion means there is a greater chance SMBs will need help with their infrastructure and it behooves them to look closely at the advantages of outsourcing both the infrastructure and management pieces to the managed hoster.
Look To Managed Hosting As An ITO And Colocation Alternative
by Bill Martorelli, et. al. (February 2, 2009)
Managed hosting has evolved significantly since its initial focus on managed Web storefronts, to a more general-purpose delivery mechanism, including a form of IT outsourcing ideally suited for the midmarket. While it still pales in comparison to the IT outsourcing industry in size, this multibillion dollar segment is growing at a healthy rate for its diverse group of constituent suppliers, who represent a broad mixture
of supplier types. Since the eBusiness era began, managed hosting has been a principal alternative to colocation for customers without a do-it-yourself bias and appears likely to grow in popularity based on expressed buyers' preference. Emerging virtual solutions including cloud-based services will likely reinforce this. Sourcing and vendor management professionals should view hosting as a useful alternative to IT outsourcing and colocation in sourcing opportunities including applications management and in smaller opportunities where a building-block-oriented approach works well.
What is Managed Hosting?
Managed hosting is a step beyond dedicated server hostingproviding more value than co-location or unmanaged servers. The decision to purchase managed hosting servicesfully or semiis generally driven by three factors: cost-savings, simplified hosting operations, and improved uptime and availability. Managed hosting can also provide greater responsiveness in the event of disruptions or troubleshooting scenarios than fully outsourced solutions. In addition, this approach delivers a comprehensive set of services designed to keep in-house applications secure, stable and responsive to a company's rapidly changing business needs.
Managed hosting is most ideal for companies who lack the necessary in-house resources to handle server administration. Semi-managed hosting solutions typically provide a dedicated service group for technical support and administrative control, as well as choice of OS and network connectivity. In a fully managed services scenario, hosts offer additional features and services that might include application and database management, high-availability services and load balancing. As a result, prices will vary greatly. Most managed planswhether they are fully or semi-managedfollow a tiered schedule according to hardware, network and support configurations. Popular sets of services are sometimes packaged under one fixed price, and site owners may be able to negotiate pricing for a few additional services.
The Benefits of Managed Hosting
Within the broad spectrum of hosting optionsbetween co-location and dedicated servers, all the way to enterprise hosting and fully outsourced ITmanaged services offer a viable alternative for companies interested in enhanced support/maintenance to keep their servers fully optimized. The levels of management and server support will differ, sometimes widely, from host to host. For those companies without server administration resources or expertise, or those without a significant amount of time to
maintain servers, managed solutions can free up the time and resources of an in-house IT organization to maintain full control over the operating system and manage applications. Managed services do cost more than unmanaged. However, when you factor in the personnel costs to perform updates, security monitoring, etc., fully or semi-managed services may actually cost less.
The Business Case for Managed Services
The difference between fully- and semi-managed hosting solutions is really just a matter of degree and cost. Software installation and updates, hosting reliability/uptime, data security, access to IT expertise all comprise the fundamental building blocks of any good managed hosting service. Ultimately, both of these approaches share many of the same benefits:
- Focus on business, not IT.
Managed hosting allows SMBs to concentrate on running their core processes, rather than devoting a large percentage of time and resources to IT management. Server monitoring, software patches, reporting, backups and load balancing require some measure of technical expertise to properly manage a dedicated hosting arrangementall tasks better left to specialists. Hosts also provide bandwidth and connectivity to the Internet. Most also offer performance guarantees and SLAs.
- Reduce costs, improve server efficiency
Research by Gartner, Forrester and others show that companies can potentially lower the total cost of infrastructure ownership by up to 60 percent while improving efficiency through managed services. It's not uncommon for organizations to miscalculate the true costs of adequately managing email and web hosting: personnel to administer a system, capital expenditures, service disruptions, etc. Managed services also make the total costs of messaging and hosting more predictable through clearly-defined licensing arrangements, depreciation, maintenance/support contracts, backups and more.
- Efficient use of resources.
Managed hosting can free IT staff from relatively routine tasks and troubleshooting so they can be more efficiently deployed on initiatives that deliver the greatest value to their organizations. Most providers also offer 24/7/365 coverage of customer service and support.
- Technology upgrades.
With managed hosting, there is no need to invest upfront in OS, management software, dedicated staff, installation of high-speed connectivity, etc. The managed hosting services provider will make this infrastructure available for a monthly fee.
- Access to IT industry best practices.
Managed hosting service providers can often tap broader markets to attract top talent as part of their support staff. In addition, most hardware, software and network capabilities are updated on a near real-time basis. Typically, service providers also deploy a broader range of leading technologies and expertise that may not be economically feasible for smaller companies to obtain on their own.
- Rapid deployment/flexibility of services.
Speed, flexibility and scalability represent distinct advantages of a managed hosting scenario. New users, even business units, may be added quickly and efficiently into an existing messaging/ hosting infrastructure. Managed hosting also allows users to exercise greater flexibility in how they deploy services, enabling a granular approach' to supplement or replace capabilities (spam filtering, targeted backups, upgrade or downgrade bandwidth) as needed. In essence, this lets the business owner tap the hosting provider's staff and resources, rather than hiring their own, additional staff.
- Secure infrastructure.
Web hosting companies offer high standards of physical security, utilizing facilities that incorporate state-of-the-art environmental control systems, fire and flood protection, backup power generators, multi-homed redundant backbone connections and security card access. Managed hosting providers take this a step further by relying on data centers featuring intrusion detection systems, redundant power systems, additional tracking and monitoring tools and measures such as SAS 70 audits and WebTrust certification.
- Disaster recovery/business continuity.
Disaster recovery and business continuity capabilities are de facto elements of managed hosting services, allowing a company to recover quickly in the event of a power outage or natural disaster. Email archiving, database and site backup, in particular, allow messaging and hosting activities to remain active should a disruption occur at a customer's location. Recovery and business continuity services typically incur an additional charge.
Key Features of Semi-Managed Hosting
The primary elements of a semi-managed hosting solutionsupport, maintenance and troubleshooting tasksinclude:
- Managed Email/Messaging. Managed email is designed to assist companies in maintaining fast, secure messaging capabilities and offload functionality from a dedicated server. Typically, managed email solutions are built in a cloud computing environment with measures to maintain high availability and redundancy, ensuring uninterrupted communications presence. Managed email is also designed to lower server loads, lessen exposure to potential abuse and spam, and reduce in-house IT administration and churn. Common key features include:
- Managed spam filtering
- Calendaring functionality
- Groupware/collaboration productivity
- High availability and redundancy
DNS services are essential to the smooth operation of any web service. Managing DNS records proactively helps to promote timely mail delivery. Key features include:
- Domain name management
- DNS-based buffer overflow attacks protection
- Simplified configuration assists in the proper creation of DNS records to optimize mail exchange
- Round robin DNS and/or heartbeat DNS, both help with basic load distribution and or basic failover functionality
- Software Updates/OS Patching
- Insecure software is often the Achilles Heel of a server environment. Managed OS patching is designed
to build and maintain repositories of mirrored data allowing for controlled, stable updating of software. Key features include:
- Host maintained repositories for participating operating systems
- Proactive revisioning and application of security/software patches
- Verifying and correcting successful updates
- Closing security gaps to minimize vulnerabilities for any subscribed server
A semi-managed hosting solution will offer consistent, differential monitoring and review of patterns in logs to deter hackers, spammers and other intruders before any damage is done. Key features include:
- Security audits and third party audits for PCI, Visa CISP and SAS 70
- Customized firewall configuration and proactive updating of firewall rules
- Log review to block negative Internet traffic
- Monitoring check sums of binaries on servers and removal of known vulnerabilities via root kit checkers, malware scanners and other methods of intrusion
- Server-side virus scanning
- Proactively monitoring bandwidth trends and ports
- Intrusion detection system and security threat analysis scripts
- Proactive monitoring of connectivity and daemons, along with rapid response to downed servers/services, is essential to maintaining uptime for any web environment. Key features include:
- Monitoring and proactive intervention of requested daemons or services
- Monitoring network connectivity with proactive reboots and troubleshooting
- Service reports demonstrating monthly loads, events and trending
- Reports with results and recommended courses of action in the event of service failures or expansion requirements
Managed Data Backups
Managed backups protect and secure the website, servers and data against catastrophic failure. Key features include:
- Daily, weekly and incremental backups of specified content (database, site) to ensure data integrity
- Validating backup/restoration capabilities
- Encrypting data within a backup environment to ensure that sensitive/critical data remains private
- Quick and reliable restore processes
Managed fully and semihosting plans may also include a range of optional or extended services sometimes referred to as a la carte services allowing companies to maintain and customize their server configurations and improve website performance. As a benefit to site owners, this menu of service, support and installation items offers added flexibility for hosting designed especially for smaller businesses. Features vary widely but commonly include:
- Managed hardware firewalls
- Load balancing
- Enterprise storage solutions
- Custom software/application installs (discounted)
What to Ask Before You Buy
Here are five factors to review when evaluating fully or semi-managed hosting services:
- Technical expertise.
First, survey your current technical abilities and skill sets available among in-house IT staff to manage daily, weekly and monthly server and hosting needs. This may cover some or all of the following tasks: OS patching, DNS management, data backups, security and service monitoring, etc. Web hosts usually retain expert system administrators and specialists in all of these areas.
One of the biggest drawbacks to do-it-yourself server management is simply a lack of experience. Managed service providers are experts who consistently respond to hosting-related issues. In-house teams are often not as well-versed on prevention and recovery from most web/email server attacks and threats.
- Time constraints.
Based on ongoing requirements for hosting and email, how much time may be allocated in-house to server management and all associated tasks, including security audits, etc.? How much time does this divert from administering internal networks or application installs and updates? From other critical aspects of running the business: sales, accounting, marketing, etc.?
Setup time constraints are also important to consider: How long will the managed services provider require setting up a server or multiple servers initially? How long to set up software? How quickly can they get startedand how long to transfer from one hosting provider to another if necessary?
- True costs.
Just as managed servers cost more than unmanaged, semi- and fully-managed service costs will vary from provider to provider. This relates directly to the level of support and expertise required to perform each task: proactive services monitoring, data backups, software installation, etc. Likewise, several providers offer tiered levels of managed services (Basic, Premium, etc.) with different price points.
It is also important to take into account the potential costs of improperly managed serversor even the cost of inaction. Factor in potential losses should a server fail due to technical inexperience. You assume risk when buying your own hardware. Reliable providers test and optimize hardware for use in many (if not all) hosting scenarios. This experience comes from years of industry knowledge and even trial and error. Likewise, consider the time/cost of managing, or learning how to manage, web hosting servers versus outsourcing these tasks.
Selecting a provider/plan
Selecting the right managedfully or semihosting plan calls for careful assessment of a company's
server management needs upfront. The definition of services varies from provider to provider. Your company should evaluate the following areas regarding in-house capabilitiesand compare against specific support tasks available from outside managed hosting providers:
- What hosting/email/security tasks need to be managed and in what priority?
- Which tasks are routine and are likely to need attention only occasionally?
- Can the servers be further customizedand what costs are associated with that?
- What specialized tech support may be requiredis it available, and when?
- Will a single point of contact (concierge) be necessary as an interface with the company's IT staff, billing and design/marketing? Likewise, will the host provide dedicated service representatives?
- What are the ongoing costs of maintaining an internal server?
- Hardware replacement costs.
- Downtime costs (if server goes down while IT staff is out of the office).
- What are the initial setup costs to configure a server or servers?
- In office server:
- Hardware setup
- High bandwidth connectivity to server (this can be upwards of $1,000 setup and hundreds per month)
- IT setup time (personnel costs).
- Setup/shipping costs
- Hardware costs
Finally, evaluate the technical and infrastructure requirements between your website(s) and host. This is essential for optimizing bandwidth, storage, redundancy and other key parameters for effective server management and improve uptime, email reliability, etc. Consider the following points:
- Network/software basics: current operating system(s), server/network interface
- Connectivity: high bandwidth contract (T1, fiber optic cable), uninterruptible power supply (redundant power backup)
- Network security: firewall, network-wide encryption, secure routing protocol
- Physical security: alarms, limited access, cameras
- Data Backup: frequency, volume, etc.
A managed hosting solution offered by an experienced hosting provider can deliver exceptional return on investment for many SMBs by providing technologies and expertise not always economically feasible for all businesses to obtain. Maintaining a secure web presence through managed services can be more cost-effective from a personnel and operations standpointeither eliminating in-house personnel or allowing them to focus on revenue-generating projects rather than day-to-day server maintenance. Both semi-managed and fully-managed hosting plans can offer improved scalability, flexibility and rapid deployment.
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