The Host With the Most?

Written by Jason Shpik

Web hosting in one of its various guises should be considered by any enterprise embarking on e-business. The potential for cost savings and benefits through reaching customers and coming to market faster is huge, but there are also great risks. The principal danger is of choosing a Web hosting provider that is either unsuitable -- perhaps being unable to deliverrepparttar level of service you require -- or worse, about to go bust. The dangers ofrepparttar 134404 latter were demonstrated byrepparttar 134405 high-profile agonies suffered last year by PSInet,repparttar 134406 company previously touted asrepparttar 134407 "Internet super-carrier", which is now threatened with bankruptcy. The problem withrepparttar 134408 Web hosting business is that to make it viable, major investment has to be made up-front in data centres, staff and network infrastructure, inrepparttar 134409 hope thatrepparttar 134410 customers will then come flocking in. Although rapid growth in Internet use continued through 2000 despiterepparttar 134411 dot-com debacle, PSInet suffered because it was over-ambitious in its projections and a little ahead of its time. Caroline Bryan, Web hosting analyst at Datamonitor, says, "It over-reached itself and sunk too much money into its IP network and datacentres, whilerepparttar 134412 services did not take off quite as expected," This showed that size alone is no guarantee of success inrepparttar 134413 Internet service business, sorepparttar 134414 question is how can a potential Web hosting customer make sure it is entrusting its Internet shop window torepparttar 134415 right provider. After all, inrepparttar 134416 case of full outsourced Web hosting, an enterprise might be relying onrepparttar 134417 service provider to collect a sizeable proportion of its revenue through e-commerce, as well as to deal with customers. According to Bryan, hosting companies that have spun off from some existing large players in telecommunications or systems integration are better placed, because they have independent revenue streams and so rely less heavily onrepparttar 134418 goodwill and patience of their financial backers. The best UK example is BT Ignite, said Bryan, which although still losing money overall has a huge existing network infrastructure it can call on, as well as BT's IT solutions business Syncordia and its outsourcing company Syntegra. This point is echoed by other analysts, such as consultant and analyst Ovum's ISP-watcher Henning Dransfeld. "ISPs with a telco background can leverage their telecom network and are in a good position to offer good quality of service," he says. This includes not onlyrepparttar 134419 big incumbent carriers such as BT, but alsorepparttar 134420 likes of NTL with cable TV networks and in future others exploitingrepparttar 134421 unbundled local loop. It can be argued that BT has over-reached itself withrepparttar 134422 huge investment in 3G mobile networks on which there will be no immediate return. There is alsorepparttar 134423 little matter ofrepparttar 134424 $1.25bn ([pound]8.5bn) it is spending jointly with US telecoms giant AT&T over three years in setting uprepparttar 134425 global network of at least 44 data centres forrepparttar 134426 Ignite Web hosting services. Butrepparttar 134427 principal risk is of takeover rather than collapse, with hopefully less disruption torepparttar 134428 hosting. In any case, at least according to BT Ignite's vice-president of sales and marketing Perses Sethna,repparttar 134429 company is on target to start making money on Web hosting by 2003. Some ofrepparttar 134430 individual country businesses making up BT Ignite are already profitable, for example in Italy, which recently had a successful initial public offering with BT retaining a 50.8% stake. But other Ignite businesses, includingrepparttar 134431 UK operation, are still making significant losses. Expansion The Web hosting story began inrepparttar 134432 US with basic co-location services and has since expanded into more managed offerings, including up to full outsourcing and application provision. There is now a broad spectrum of services on offer, but most analysts assign these to just three categories. For this reason, others such as Worldport only provide dedicated services. Few if any ISPs inrepparttar 134433 hosting business want to confine themselves purely to co-location because, as research director specialising in ISP issues atrepparttar 134434 Gartner Group Eric Paulak points out, it delivers a relatively poor return per unit of space and in locations such asrepparttar 134435 City of London, where property is expensive, it is only just viable. Matching hosting providers to these categories is easier said than done, as suppliers are reluctant to admit that they are only inrepparttar 134436 co-location arena, even if that is all they are capable of providing. BT Ignite addressesrepparttar 134437 entire spectrum, but Sethna admits cheerfully that all their marketing effort is pitched at dedicated hosting because that is whererepparttar 134438 most money is to be made. "If you look atrepparttar 134439 pricing for basic co-location withinrepparttar 134440 UK, it works out at about [epsilon]100 ([pound]65) per square foot," says Paulak. This figure can be increased by perhaps 25% by offering some additional management, for example ofrepparttar 134441 IP routers, but pales into insignificance when compared torepparttar 134442 pickings that can be made with dedicated services.

The Pros & Cons Of Hosting The Site Yourself

Written by Jason Shpik

DO-IT-YOURSELF You hostrepparttar Web site yourself, relying purely on in-house resources except forrepparttar 134403 external connectivity. PROS: * No service costs to pay * You have total control overrepparttar 134404 application CONS: * Can be difficult and expensive to maintainrepparttar 134405 required expertise * You may not have an ideal physical environment * Coping with future increase in demand may be painful.

YANILLA CO-LOCATION Hosting company providesrepparttar 134406 physical space and associated environmental services, including building access security, for your Web server andrepparttar 134407 connectivity torepparttar 134408 Internet. However,repparttar 134409 server is yours and you manage everything else to do with it, includingrepparttar 134410 hardware, operating system and application. PROS: * Far cheaper than full-blown dedicated hosting, while avoiding allrepparttar 134411 environmental and connectivity issues of in-house hosting CONS: * You stilt needrepparttar 134412 resources to managerepparttar 134413 Web server itself including operating system and application.

CO-MANAGED This is a half-way house, in which you still look afterrepparttar 134414 application, but nowrepparttar 134415 hosting company owns and administersrepparttar 134416 server andrepparttar 134417 operating system, as well as providing allrepparttar 134418 basic co-location facilities. This represents a split in responsibility betweenrepparttar 134419 IT platform andrepparttar 134420 application running on it. PROS: * It off-loads all responsibility for hardware and operating system, allowing you to focus onrepparttar 134421 application * Cheaper than full dedicated hosting CONS: * Considerably more expensive than co-location * You still have to look afterrepparttar 134422 application, which is oftenrepparttar 134423 main source of reliability problems.

DEDICATED HOSTING Hererepparttar 134424 hosting company looks after everything to do withrepparttar 134425 IT of your Web site, includingrepparttar 134426 application and even processing-electronic payments. PROS: * It off-loads all responsibility for IT, allowing you to focus purely on products and customers CONS: * Very expensive * You will stilt deal with customers and products * You may stilt have to grapple with complex integration issues involving in-house systems.

FULL-BLOWN PROCESS OUTSOURCING This is dedicated hosting withrepparttar 134427 additional component of managing processes such as CRM and product pricing, in effect outsourcingrepparttar 134428 whale e-commerce operation, concentrating onrepparttar 134429 products or services you provide but leavingrepparttar 134430 online distribution torepparttar 134431 service provider. PROS: * It off-loads some ofrepparttar 134432 integration issues (or all of them if you resort to total outsourcing of IT) * Fastest route to new online markets CONS * Adds even more torepparttar 134433 cost * Extends dependence on hosting provider beyond IT provision into customer relationship management, which may be beyond its core competence.

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