To Host or Not To Host, That is the Question

This is the scratchy head topic that all forward-thinking businesses deliberate on

It is a subject of great financial debate for companies, small to large and the decision to host or not to host can either save you money or pour much needed cashflow from your IT budget straight down the drain. However, there is sound reasoning for the decision to use hosted solutions and we will discuss the pro’s and con’s so that you can make the right choice for your company, when the inevitable discussion arises over the boardroom table.

What is the cloud?

You may have seen lots of interesting adverts about “cloud services”, “cloud technology” and “business virtualisation” but at the end of the day, there is no better word for hosted services than “hosting”. Hosting is for ease of understanding, services provided by internet-accessible hardware or in other words HaaS (hardware-as-a-service). What I mean by this is that all of the hardware that would usually be sitting in your internal comms or server room is sitting in someone else’s (it’s in a datacentre) and you have a secure direct tunnel to these systems over your internet connection.

There are many types of hosted solutions on the market, but I am going to concentrate on a particular type of hosting that is recommended for standard day-to-day business activity. That is managed hosting, specifically for document (flat files and applications), web and email.

How does it fit into your business?

So you’re a small company with 5 to 20 staff members thinking about investing in some serious internal hardware and kitting out your office with business servers. Or, let’s say you’re a medium sized company of 25 to 50 people with 3 to 5+ year old infrastructure thinking it’s time for an upgrade. Well, before you start running to your Financial Director or business partner asking to spend anything from £5,000 to £50,000, why not investigate the hosting route as you will not only reduce your immediate financial CAPEX exposure dramatically, but you will also be investing in business continuity protection, both monetarily speaking and systems related.

Investing in managed hosting is a very cost effective way of progressing the technology in your company. Your documents, websites and emails are all stored on secure servers outside of your working environment, managed and supported by qualified tech support companies & staff and you have direct secure access to these servers using your internet connection on your computers, or even on your mobile phones. Immediately you have reduced the risk on your business and have set in place reliable business continuity elements.

What it really gives you

In a hosted environment the IT backbone of your company (and for the majority of companies these are your documents, emails and website) sit on an external source and should an emergency occur internally such as an office fire, theft or terrorism, all of your core systems are protected and will remain operational. In addition to this, software/hardware upgrades, service packs, extra modules for your hosted hardware are all handled by your hosting company which enables you to use the latest technology without investing in any further personal time or money. Not to mention the most important part of hosting, a Network Uptime and Service Level Agreement and if you use some of the top hosting companies that provide this at a 100% level, you are guaranteed a 24/7/365 assurance on the accessibility and security of your technology and more importantly, your business.

However, should you decide to host your core business solutions internally, you are not only putting all of your eggs in one basket in terms of single-points-of-failure with hardware, but are forced to lay out a tremendous amount of money that for small companies just is not practical in terms of cashflow and if you have a low credit rating, even leasing equipment will be a problem.

Just as important, you also cannot guarantee to customers, investors, shareholders, partners or staff a guaranteed network uptime and are utterly reliant on internal and external support, all levying costs. Ultimately, should any emergency occur, your business will come to a standstill.

Therefore on security and continuous business activity alone, the financial burden and company exposure of using internal hardware can be seen to be outweighed by the risk of not hosting your core business IT structure.

So why isn’t everyone using hosted solutions?

People fear what they cannot see or touch and some regard hosted services as a risk. Since they cannot control the source then it is considered as being out of their control and vulnerable. However, this lack of control is a good thing as it hinges on the hosting company to manage and support it who are not only qualified to handle this for you, but you pay them for this skilled level of cover within the costs.

Other reasons for not hosting maybe due to application and development requirements for in-house systems, which is absolutely a case for internal infrastructure and when it meets the needs of larger businesses who are financially able to cater for this. However another reason why companies may not want to use hosted solutions is because they would also be at the mercy of their internet connection.

Hang on a minute, if the internet connection goes down at the office with internal business servers they will stop communicating with the outside world. So isn’t that the same thing? The answer is ‘yes’ it is and in the event that your internet connection does go down, savvy companies would have already installed a backup internet line, which isn’t that expensive in order to keep you afloat.

There is simply no difference to the internet connection going down whether you have internally or externally hosted hardware.

Moving over to the hosted platforms

There are two other reasons why companies prefer not to host and that is due to migration time and cost. Migration is always a cause for concern for companies because when migrating to hosted services, especially when it relates to web and email, changes to your domain (DNS) are necessary. Your DNS is the index for your domain which tells every other nameserver (internet directories) where your website is stored, how your emails are processed and to which IP address and so on. However, making a change to your DNS requires a process called propagation to occur which is the period when every nameserver refreshes their own directories to pull in any new settings.

Nameservers refresh daily but at different times, so there will be occurrences during propagation when your website and emails will be inaccessible or people will report they receive bounce back messages when attempting to email. However, usually 24 to 48 hours after any DNS change, your website and emails are live to everyone on the internet and therefore it is always good practice to make changes on a Friday afternoon to allow propagation to occur during the weekend.

What can be done to minimise disruption?

You can put in provisions such as using a backup mx record (an entry in your DNS that points emails to a backup mail store in the event of a failure) that will store any wayward emails during this time, as well as always keeping your website on the existing web server so that companies and customers are able to view your website either on the old or new server, dependent at which stage of propagation their nameservers are at. However you do have to allow for the propagation period and the possibility of your website and especially your emails to be down for a brief amount of time. So ensure you communicate this with your staff, shareholders and clients at every stage!

In terms of migrating and importing documents, websites and email mailboxes to the hosted servers, this is straightforward and is usually handled efficiently by either the company you are purchasing the hosting solution through or a member of your IT Department. However, if your business simply cannot afford to be offline for a single day or a period over the weekend and this will be more prominent in larger companies, then hosting may be a drawback.

Although, with Microsoft’s Office 365 and Azure Enterprise platforms, VMware’s vCloud and Dropbox Business, together with native sync tools and plugins, you are now able to run on both internal and external hosted systems simultaneously, which helps the transition to the hosted servers without experiencing any downtime. A massive tick box for the larger businesses or those that need to meet regulatory and/or professional service uptime agreements.

Cost implications

I have already mentioned the acquisition of internal hardware could be in excess of £50,000, but with hosted services, you do not incur high-end financial burdens. There are no one-off purchase costs where you have to consider raising capital or having depreciation of hardware, you spread the cost over a period of time.

For small companies, the annual hosting cost would not even equal the full cost of an outright server purchase and for larger companies although the cost of hosting will eventually be higher than originally purchasing the hardware (over a 3-5 year period), the benefit is you will always using the most recent technology (hardware and software), supported by a dedicated technical team, a business continuity element and service level agreement. All high protection factors for the daily continuity of your business.

For mission critical business systems that require a guaranteed uptime and a managed support level, the hosting route provides a cost-justifiable, scalable, reliable and supported corporate infrastructure at both SMB and SME levels.

To host or not to host, that is the question…I think the question is rather can your business afford not to host?

We provide cloud platforms as part of our business IT solutions, so get in touch with us if you would like a clearer understanding on the benefits of hosting for your company.

If you know someone who is currently trying to weigh up the cost vs benefits of hosted services, please share this article with them!


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