Sunday, December 2, 2012

Managed vs In House Services

Managed Hosting vs In-House

If you are considering managed hosting, you may be asking yourself, “How much will this cost me?” or “Are there any real savings for my business?” The below presents a two-year cost comparison in dollars and cents for managing your own in-house IT versus going with a managed hosting provider.

Managed hosting cost savings equal $770,420 over two years.

Consider these factors when comparing outsourcing vs. building it yourself

  • Capital Depreciation - There is no hardware to have depreciated over time.  When hosting internally you have expensive equipment to purchase, maintenance agreements, collocation or utility costs. Outsourcing presents a predictable monthly recurring expense.
  • Employee Turnover - Employees come and go and if key people leave your company, you could be left scrambling to hire and a train a person that knows how to maintain your equipment and website.  Outsourcing removes this risk because the provider guarantees to maintain these services with complete support and without interruption. 
  • SLA’s - The SLA (Service Level Agreement) may include 100% network uptime, 1hr hardware replacement, 30 minute emergency response, and resource guarantees.  You are in turn, able to offer these guarantees to your own clients giving them added assurance.  It can also help you bring on new customers who may have similar requirements.
  • Flexibility - If your technology needs change or you bring on a customer with unique requirements – an outsourced host should be equipped to swiftly accommodate them and have support services/staff available to troubleshoot problems if they arise. 
  • Scalability - Most outsourced managed hosting providers can add virtual machines to your environment in less than an hour and add physical infrastructure in a day or two.  In addition, at a respected web host you can take advantage of their cloud to combine with your private cloud to accommodate unknown load or a need for having resources available immediately.  Achieving this same thing by setting up in-house hosting would be incredibly expensive and take much longer.
  • Opportunity Risk - Opportunity risk should also be considered as you will require internal IT resources spend their time maintaining the hosted environment in-house.  Externally hosting frees up these resources to focus on tasks more specific to your business.  There is also the opportunity risk of not being able to meet one of your customers’ requirements internally while externally hosting gives you the ability to accommodate most clients’ requirements quickly.
  • Start-ups - It is also great for new businesses that need the reliability and technology but lack funding to support the purchase of expensive equipment or a full IT support staff. 
  • Security - Managed hosting provides the highest levels of security like authentication, logging of who accessed what and for what reason, File Integrity Monitoring, and vulnerability scanning.
  • Compliance/Certifications - Managed web hosts obtain compliance certifications like SSAE 16 Type II, SOC2, SOC3, and PCI DSS certifications to make sure your data is secure.  Attaining certifications present another expense.  By outsourcing, your solution passes along these certifications, presenting an added benefit and significant cost savings.
  • Network Latency - By outsourcing your web hosting needs, this allows you to take advantage of network redundancy and automatic failover which means your servers are always available 24x7x365 with guaranteed levels of network performance. 
  • Monitoring - Any managed hosting solution will include monitoring of your environment.  At the very basic level it should include monitoring of availability and the overall health with alerting to 24x7x365 support teams who can deal with problems promptly no matter what time it is.  This monitoring can even go more in depth depending on the host, right down to the application or transactional level.  Adding this on your own would cost extra to implement and you would still need people to respond to any generated alerts or emergencies.

Full-featured hosting services include

Dedicated Hosting Service also called managed hosting service, where the hosting service provider owns and manages the machine, leasing full control to the client. Management of the server can include monitoring to ensure the server continues to work effectively, backup services, installation of security patches and various levels of technical support.

Virtual Private Server - in which virtualization technology is employed in order to allow multiple logical servers to run on a single physical server.

Colocation Facilities - which provide just the Internet connection, uninterruptible power and climate control, but let the client do his own system administration; the most expensive.

Cloud Hosting - which can also be termed time-share or on-demand hosting, in which the user only pays for the system time and space used, and capacity can be quickly scaled up or down as computing requirements change.


Bluehost is ultimately the best hosting company with plans for any hosting requirments.

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