1 Server Hosting Solutions Why you may be putting your business at risk and wasting money by hosting in-house A White Paper from
2 Executive Summary More than half of UK businesses 1 have already turned to outsourcing to help improve efficiency and cut costs, but huge developments in virtualisation means it s never been a better time to look to outsource your key business processes through server hosting. Whilst in-house hosting was once considered the smartest, safest and most comprehensive way to retain complete control of your vital business processes, times have changed. Keeping your server operation on-site is no longer considered a secure option. You might be surprised at the risks of hosting your own, in-house servers. Have you considered: What happens when your server breaks down? How much the downtime will cost your business? What impact hardware and operating/management costs have on your CapEx? The risk of keeping your whole business operation on one site? 80% of businesses that suffer a major data loss or failure for more than 24 hours close within the year. Keeping things close isn t always safest spread the risk with outsourced server hosting. This White Paper will outline the many varied solutions for server hosting in the market today. It aims to help small businesses understand how outsourcing the right way can: Dramatically cut costs Offer unrivalled data security Guarantee business continuity Most importantly, learn how outsourcing enables you and your employees to be truly efficient, by allowing your business to focus both time and money on productivity, not processes. Keep competitive and future proof your business. Don t be afraid of losing control gain smarter control with better security, unrivalled guarantees and first class performance.
3 Introduction Gartner research 1 shows that most organisations have either re-negotiated, renewed or started a significant outsourcing contract in the past 12 months. It s no surprise, considering the economic climate of those past 12 months: in recession, successful businesses have to work smarter. One of the easiest ways to work smarter, secure your future and see immediate benefits is to outsource. Perhaps as recently as five years ago, outsourcing was a dirty word to small businesses who feared a loss of control by passing hosting responsibilities on to a third party. Today, however, an increasing use of virtualisation tools and cloud-based software has seen the hosting market boom as companies start to offer really impressive performance guarantees. Think of it this way: outsourcing something as major as your server to a third party puts all the risk of failure on that supplier. For any hosting company, carrying risk is central to their remit and as bad news travels fast, it s their reputation on the line. Choose the right solution, with the right disaster recovery solutions in place and you ve assured your business continuity. No hosting provider is going to let bad press about an outage ruin their name and you can be sure (and should be assured before purchase) that their system is fail-safe. What s more outsourcing server management frees up both budget, staff overheads and time. Managed hosting works on a pay-as-you-go basis, giving you freedom from fixed costs and the flexibility to make savings. No more spend on expensive hardware and software - and give your staff a chance to do what they re paid to do...not manage business systems. Three reasons why your in-house servers could be putting your business at risk If you re continuing to host your servers in-house, you could be putting your business future on the line. Why not spread the risk? Here s how on-site hosting can go wrong. Do you have a plan for hardware failure? Yes, you ve invested significantly in the technology you re using, and the environment you re keeping it in, but with your application running over just one server where s your continuity plan? You may even have insurance to protect the hardware, but when the server blows up and your business systems go down have you calculated the cost to your business in terms of day to day operations? The truth is, you can only ensure business continuity if you have a failover system in place and that means more than doubling an already large IT bill. Small businesses can t afford 1
4 that level of infrastructure which is precisely why buying in to a third party s hosting network provides a much more reliable solution. What happens in the event of disaster? Hardware failure is one risk, but what about fire, flood or theft? As a business, you re more than likely to have insurance to cover such events but again, think about the issue of continuity. Your insurance will pay up eventually but what happens in the meantime? With your server onsite and eliminated by the disaster, your business is off-line and off the radar for as long as it takes you to get up and running again. And you ll be starting from scratch. Outsourcing server hosting means all your data, processes and operating systems are stored remotely, meaning the whole backbone of your business is totally unaffected by any local disaster. In fact, you could be up and running again in just five minutes, via a laptop and wifi connection. Nothing gives your business a better Disaster Recovery solution than that. How secure is your backup? Keeping your servers in-house means all your data is in one place. Backup is essential to protect from both hardware and software failures, infections or major disasters but it needs to be a secure system that takes the back-up copies off site. Many small businesses just aren t equipped to put in a safe enough system to ensure they re not at risk. Over half of businesses that lose data, never recover. And on average, one in every eight tapes fail 2. If you re backing up to disc what if the discs are lost or corrupted? If you re using external hard drives where are these being stored? Do you have members of staff taking backup drives or discs home with them for safekeeping? If they are stored in the office, you re no safer in case of major disaster yet if they leave the office at all, how secure are they during transportation? Earlier this year, new laws were passed putting any business no matter how small at risk of a 500,000 fine for data breaches. No business wants to find itself subject of unfavourable press coverage involving lost data. Hosting your servers externally automatically moves your data offsite, in total security. What s more, choose a good system and you ll find data backup to a second off-site location is part of the hosting package. Not only can server hosting keep your business operating systems available, but some solutions will automatically back up data for you too. It means that pay-as-you-go price tag is doing two jobs for you. 2
5 But these business benefits are only half the story huge cost savings could make a big difference to your bottom line and your future in an increasingly turbulent time. What you ll save Year One In-House / co-location Managed Server RENTAL COSTS Server rental NA From pm Colocation / in-house rack space (per server) 100pm included Bandwidth / connectivity costs (10Mb) 200pm included Licensing Enterprise Operating System (Red Hat Linux or Microsoft Server licence) INITIAL SET UP COSTS From 20pm included IT Rack purchase 1,200 NA UPS Backup 800 included Server purchase 2,000 NA High Availability (Second server) 2,000 included Backup System 2,000 included from 99pm server Hardware Firewall purchase and configuration pm OTHER ANNUAL COSTS Hardware maintenance (15%) 1,000pa NA Staff / IT costs for day to day management (OS patching and Security vulnerability patching) 10,000 (assume ½ post) included Total Year One Cost From 23,840 From pa Ongoing Costs From 14,840 From pa So, what are the options? Outsourcing server hosting isn t a new solution but some ways of doing it utilise some pretty impressive new technology. It means you re left with a variety of options offering a choice of costs and completeness of service. Here are some of the most common solutions you ll see companies advertising and what you need to know about the pros and cons of each.
6 Co-Location Put simply, co-location is when you move your own server off-site, to be hosted elsewhere. You may be loath to waste a recent CapEx cost on purchasing your server, yet wish to secure the operation of it elsewhere. Your money pays for the rental of a cabinet in the provider s data centre, where you store and run your server. Risks It s still expensive (see above) There s no failover when it breaks, it still breaks It s still up to you to manage your server Any hardware repair costs are yours to bear You still need to think about secure backup You ll need to sort out your own data storage solution Benefits You have total control and full access The data centre should offer fast connection speed and a backup power supply More cost effective high speed connection to a second data centre for backup than inhouse Virtual Private Server VPS solutions offer a cost-effective way for your server to be both hosted and managed by a third party. It also frees you of any CapEx costs as you re renting the hardware too. But with the cheap cost, comes some compromise. Buying into a VPS means you re renting space on a server which you ll be sharing with an unknown number of other businesses. That means the processing power is split between your needs and that of your hosted neighbours. Now imagine if you were sharing that server with the Amazon website, for instance? The sheer level of demand on resource for Amazon could leave your business with precious little processing power. Risks You re sharing resources with an unknown number of others Access is likely to be slow at peak times There s still no failover when it breaks, the provider will fix it but how long will it take? Backup is unlikely to be managed putting the responsibility back on you Data storage is usually fixed and inflexible Benefits It s often the cheapest solution It frees you from bearing the cost of hardware It may offer data backup as an extra
7 Managed Server Hosting There are a number of increasingly sophisticated managed servers on the market today some with impressive credentials. A good Managed Server Hosting offer should not rely on one single physical server, but give you High Availability, total N+1 redundancy, absolutely flexible data storage, dedicated processing power, off-site back up and really good data security. Look for a high Service Level Agreement and a track record for reliability. Done the right way, Managed Server Hosting options will give you better reliability, higher security and a greater level of performance than any other solution certainly offering a whole new level of business continuity guarantees. Despite the thorough nature of this all-inclusive solution, you should still expect pay-as-you-go prices. The beauty of virtualisation and increasing use of cloud-based software and services is that provider companies take on the huge costs of enterprise-level infrastructure which are then sold as a service, rather than a product meaning the best technology is suddenly affordable for small businesses. Managed Server Hosting solutions, offered with the correct level of back up and resilience in place, should provide unsurpassed security for your business continuity. It s certainly the most comprehensive service on the market today designed to keep you online, available and secure 24/7. Here s what to look for to ensure your managed hosting solution is delivering the maximum potential service. Risks Business downtime thanks to server failure Fight for processing power with other customers Limits on data storage options Risk of data loss Managed Server Hosting solution benefit Virtualisation technology should offer High Availability, rebooting your data and processes onto a spare processor, giving your minimal downtime. Look for market-leading brands like VMWare and managed solutions which offer mirrored servers for redundancy Ensure your managed solution offers ringfenced processing power: a guaranteed allocation to your business, insuring you against the actions of other customers. Some solutions even offer separate servers for processing and data storage, giving you even more dedicated support. Look for a really bespoke option offering quality data storage facilities (like specialist SAN storage devices) with total flexibility. You should be able to scale up and down your storage needs with minimal fuss. Some managed servers will offer you back up for your data and the best solutions will give you secondary, off-site backup too. This
8 Management hassles gives you a second level of protection, and takes care of another business essential. Managed hosting should take all management issues away from your business and your employees. Look for a company which offers you robust SLA s, plus a tailor made service which is truly flexible so you don t end up paying over the odds to ensure a futureproofed business. Still unconvinced? Questions to ask yourself when considering outsourcing servers Can you afford to own and manage your own servers? Although it sounds like an attractive long-term possibility, in the short term selfmanagement and ownership options are expensive and time consuming. They also fail to offer as much protection as some of the better managed hosting offers. A managed solution can be bought at a much lower start-up cost, without any of the spikes to your budget that a home-grown solution can demand. Remember also, that the value of hardware depreciates at a fast rate so your investment will lose value from day one. Thanks to these factors, outsourcing promises a far quicker return on investment. Secondly, managing your own systems requires great staff expertise and time. With outsourcing, none of these costs are borne directly by your business, freeing up salaries or time for your staff to be working towards more profitable goals. How much is the in-house data centre costing in its entirety? And how much extra cost is outlaid on external contractors when things go wrong or an in-house team of IT managers? Can you afford to keep up with technology and stay competitive? Not only does technology depreciate with value as soon as it s purchased (think of it as like driving a new car off the forecourt) but technological advancements are being made all the time. Despite the huge cost of set-up, it s inevitable that your in-house servers
9 What is the cost of employing a Server Administrator and paying for software licences and upgrades? will quickly become outdated and will hold your business back from accessing the most efficient software and technology of the time. A good managed solution should offer you the best tried and tested technology giving you a guarantee that you re getting the highest possible reliability, coupled with the market leading IT developments. This gives your business a huge competitive advantage for a pay as you go cost. Can you be as flexible as your growing business needs? Setting up an in-house server system if you have the budget can provide a perfect service on day 1. But expanding your servers will be costly, and budgeting for growth in How long does it take your suppliers to respond, on average? this area may hold back business development. Alternatively, you may feel it s sensible to overspec your system from the start, to give your business room to grow but then you re overspending from day 1 instead. A good managed system should offer total flexibility, meaning your business has absolute freedom to grow, costing you no more than the initial per unit price. And in economic times like these, the ability to downscale operations and save on costs instantly is almost as important. How long could your business survive downtime? Your own server system is only as good as the hardware and management team you ve supplied. A small business is unlikely to be able to afford the sheer scale of backup and redundancy measures offered by a professional hosting company meaning there s no margin for error. Technology can and does fail and whilst your IT team may be hugely skilled, you re still facing downtime and huge capital outlay for repairs or replacements whilst the work is done. Outsourcing to a managed server solution can significantly cut down both the risk of downtime and the impact. Some cheaper solutions such as VPS may not provide absolute resilience but many have some sort of back-up system in place to avoid long periods of downtime and of course, the cost of repair is borne by the provider. Comprehensive Managed Server Hosting solutions should provide an ultimate disaster recovery system in which any hardware failure is immediately circumvented by a sophisticated system of
10 backup and mirrored hardware. Opting for the fullest service means insurance against business downtime you ll be paying a monthly fee for the best reliability possible. It s worth checking out a provider s downtime record, or Service Level Agreement. Many Have you ever worked out the hourly cost to the business when systems go down? offer 99.9% uptime an impressive enough sounding statistic, but when you work out what 0.1% of the year actually equates to, you re looking at potential downtime of as much as one whole working day 3 : can your business sustain that kind of risk? Look for higher figures if possible there are providers out there willing to offer them! Can you afford to waste business focus on system management? In tough economic times, the most successful companies are those which are streamlined, with pared down costs and an efficient and effective workforce. Do you really need to keep in-house technical staff on in order to manage IT systems? Outsourcing not only provides you with a better, more reliable and higher quality system, if chosen well, but also gives you expertise your budget probably couldn t afford. You ll be paying as you use the service but in that payment, gaining access to the best technical experts and latest technology. More importantly, outsourcing the hassle of server management frees up your staff for real productivity: providing more time, energy and focus on the core business % uptime means an accepted 0.1% downtime which equates to 8.76 hours in a year. Agenda IT offer the five nines in uptime (99.999)
11 Conclusions Getting your servers hosted off-site is the first step in creating a more resilient and streamlined business. First step solutions like Co-Location or VPS provides an answer to data security issues, and the risk of high CapEx outlay on systems hardware. For a true Disaster Recovery System, however, a fully managed solution is the answer. Managed Server Hosting offers you total business peace of mind by taking care of your backup and data security needs as well as eliminating the risk of prolonged periods of downtime and all for pay as you go prices. Successful businesses are increasingly recognising that keeping basic business functions in-house is both expensive, risky and inefficient. The delivery of infrastructure as a service is a trend that will only become more prevalent as businesses move away from hardware investment and look to convert CapEx to OpEx. Becoming the customer, by outsourcing to a specialist third party, can give you a whole new level of protection. Outsourcing the hassle of IT management then frees up your workforce to perform to your future business goals not today s business needs.
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