WP Engine. The Business Case for Managed WordPress Hosting

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1 WP Engine The Business Case for Managed WordPress Hosting By: Chris Lema June 2014

2 Summary Over the last few years WordPress has slowly worked its way into the enterprise. As an enterprise installation typically utilizes multiple WordPress sites and applications, there are three hosting options to choose from: hosting on-premises, outsourcing to a generic host, and a relatively new option using a WordPress managed host. Since the majority of costs associated with a WordPress installation over a five-year period are comprised of hidden staff cost drivers beyond the actual hosting fee itself, a total cost of ownership (TCO) analysis is required to identify the best choice. This white paper compares the TCO of the three hosting options above. Using a case study of Emphasys Software as an example, Chris Lema explains why using a WordPress managed host offers enterprises more value and a lower TCO. Page 1

3 Contents The Business Case for Managed WordPress Hosting 0 Summary 0 Contents 1 Stepping into Enterprises with a Whisper Instead of a Bang 3 The Changing Nature of Data Centers & IT Staff 3 Total Cost of Ownership Analysis of Hosting WordPress 4 Understanding the Cost Components of the TCO Analysis 4 Needs Analysis and Site Preparation 4 Software Purchases and License Support 5 Implementation and Deployment Hardware Costs 5 Business Continuity and Disaster Recovery 6 Ongoing Operational Support 6 Factors Beyond Cost 7 Emphasys Software: A Case Study 8 Key Findings 10 Staff Costs 11 Hosting Costs 12 Five Year TCO Summary 13 Conclusions 13 Page 2 WP Engine: WP Robust, Engine: Enterprise-Grade The Business Case Security for Managed for WordPress WordPress Deployments Hosting

4 Stepping into Enterprises with a Whisper Instead of a Bang It happened quietly without anyone talking about it. When employees started bringing their own devices to work, IT was at least aware of it. They noticed the devices on their networks and began asking questions. But when people in HR, Marketing, or other parts of the enterprise spun up personal blogs hosted elsewhere IT wasn t involved. And suddenly, without any announcement, WordPress had stepped quietly into the enterprise landscape. But, WordPress offers more than just a blogging platform. Over the last decade it has become the Internet s most widely adopted site builder and content management system (CMS). Organizations started using WordPress for product microsites, corporate blogs, company websites, and more. The debate over what is a website and what is an application was overrun by pressing needs to get functionality delivered. And when WordPress began delivering on those needs, some organizations started using it to deploy datadriven web applications just as easily as they had sites and blogs. The Changing Nature of Data Centers & IT Staff Step back twenty years and the definition of an IT professional included setting up corporate networks, managing printers, and troubleshooting systems. It was a support position that took care of an IT environment. The definition of the IT environment was well understood and scoped, and a critical priority was protecting the networks and data from external intrusion. Over the last twenty years, the definition of an IT environment has radically shifted and now could be described simply as a business platform. Capacity planning has become its own specialty as the amount of data managed in these environments has grown at an incredible rate. Looking at just mobile data and traffic, Cisco estimated that monthly global mobile data traffic will surpass 10 exabytes in While every organization and environment is different, it s hard to imagine an enterprise that won t face the challenges of dealing with the surge in data moving across these platforms. Additionally, while the early focus of IT was preventing others from accessing data, that focus has now shifted to equally include managing the explosive growth of data requests. This poses a new set of challenges including the development of staff expertise in areas like intrusion detection, DDoS mitigation, web application firewalls, and vulnerability monitoring. Total Cost of Ownership Analysis of Hosting WordPress These changes and shifts, along with the introduction of WordPress into the enterprise, suggest a review is in order 1 Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, Page 3

5 to determine the best, most cost-effetctive approach, to hosting WordPress sites and applications for enterprise organizations. This total cost of ownership (TCO) analysis looks at the various visible and hidden costs of adding WordPress hosting to an internal data center s management oversight (either on-premises, or outsourced) or alternatively selecting the relatively new Platform-as-a-Service (PAAS) option of a WordPress managed hosting provider. Understanding the Cost Components of the TCO Analysis Needs Analysis and Site Preparation A 2012 data center market insights survey by Data Center Knowledge indicated more than 40% of respondents suggested data center scalability is their primary concern. Scalability and capacity planning are complex problems that arise immediately when getting ready to deploy a web-based solution. Which server will you deploy a site to? Will it need to move? Is the destination infrastructure going to scale well? These challenges and questions immediately shape the TCO comparison between our three options. While on-premises solutions will often leverage excess capacity for a new project, one can t get away from doing a proper needs analysis if hosting will be outsourced to generic hosts. For example, hosting a WordPress site at Rackspace, a generic host, requires the knowledge of how much RAM, disk space, CPU resources and bandwidth will be required. The hidden cost of calculating these items can consume several weeks, depending on who in the organization holds the answers. As a result, the most beneficial approach to hosting a WordPress installation that requires the least up-front knowledge is to use a WordPress Managed Host. Many of these vendors price their platform based on the number of sites. Additionally, scale is an essential component delivered by these providers. If a site experiences hyper growth, there aren t worries that the infrastructure will buckle. Lower TCO = Managed WordPress Host Software Purchases and License Support WordPress is an open source software product, which means that there s no cost to license the software. It runs on an entire open source stack from the operating system (Linux) to the web server (Apache or Nginx), to the database system (MySQL). Some enterprises may attempt to host WordPress on their Microsoft Windows servers running IIS. While this is technically possible, there are additional software license fees for the operating system, and costs that increase in terms of IT support (as it s not a simple effort to manage this architecture). Page 4

6 However, the cost of licensing WordPress is always zero, whether of hosting WordPress on-premises or outsourcing it to generic or managed hosts. This makes all options equal when comparing TCO in terms of software purchase or license support. Lower TCO = Same for All Implementation and deployment hardware costs When a consumer wants to spin up a blog, it s a relatively simple effort. After all, for a consumer, the site is rarely a mission-critical system that has uptime requirements. Consider, instead, the infrastructure required by most enterprises that deploy software. Enterprises typically require not only a production environment, but potentially several copies that function as staging, testing, and development environments. On-premises costs can skyrocket here when additional hardware is required. In addition, a well-designed hosting solution will include at least two or three servers to separate the database server from web servers. Now imagine replicating it four times over (for developing, testing and staging). Unfortunately, most generic hosts work the same way when it comes to multiple environments. Whether you re talking to hosting players like Hosting.com or Rackspace, you ll discover that these providers function as Infrastructure as a Service. To that end, your multiple environments are simply requests for further infrastructure. Many managed WordPress hosts, on the other hand, provide staging environments automatically as part of their offering. Companies like Pressable and WP Engine allow one-touch cloning of a site to a separate instance for use as a staging or testing environment. Lower TCO = Managed WordPress Host Business Continuity and Disaster Recovery In their 2011 Cloud Trends Report, Hosting.com discovered, Business continuity and disaster recovery (BCDR) options and capabilities greatly influence an organization s decision to invest in cloud computing. Over 50% of both small and large enterprises placed BCDR in the top three reasons for looking at outsourced hosting. The reality of the situation is that off-site solutions provide an easier approach for cold and warm failovers. Spinning up a new duplicate of a backed up environment is often a matter of a restore. Managed WordPress hosts provide backups automatically as part of their offering, making them better deals than generic hosts that charge you for the backup or the storage of the backups. Lower TCO = Managed WordPress Host Page 5

7 Ongoing Operational Support In 2012, Forrester Consulting surveyed 156 US, UK and German e-commerce and IT professionals, asking about their on-premises and cloud-based solutions. Among the many takeaways was that most TCO evaluations are wrong and under-calculate the costs of on-premises staff support. Can an organization s existing IT staff take on the support of WordPress sites? There is no question that it is possible. The bigger question, which goes to the heart of the under-calculation Forrester found, is whether the existing staff has the requisite skills. Enterprises that host WordPress sites on-premises must make sure their IT staff has top-notch security skills, experience with the specific open source components of this technology stack, and knowledge of what it means to optimize performance of a WordPress site. Because these skills are specific for the platform and its architecture, it can easily require hiring consultants or adding costly staff to an organization. Generic hosting providers bring equal or slightly better skills to the table, depending on the core competencies of the enterprise. They bring the security expertise and some of the performance optimization experience that may be required to support WordPress sites. They ll also provide (for a fee) patches at the operating system level. Managed WordPress hosts on the other hand provide monitoring, security remediation, and patching to every part of the platform, including WordPress itself. Lower TCO = Managed WordPress Host Factors Beyond Cost While this business case is focused on the components that drive costs into the overall comparison of the three hosting options, the dollars and cents are not the only things that matter. In the aforementioned study by Forrester, they found that TCO matters, but agility, innovation, and time-to-market are equally important. While the study was focused on e-commerce providers, the same can be said for enterprises bringing WordPress sites and applications online. We began by looking at how WordPress has slowly permeated the enterprise. In doing so, sites materialized without IT approval or support. This begs the question of what happens when those same sites now require IT resources to improve or add new business functionality. In that moment, if IT doesn t have the bandwidth or the required experience or skill, the business will suffer. On the other hand, on-premises hosted WordPress sites can more easily integrate with business systems that are also on-premises suggesting that every organization must evaluate on their own what it takes to support on-premises WordPress deployments. Page 6

8 When on-site system integrations aren t required, generic hosting and managed WordPress hosting will often provide much faster time-to-market because hardware requisitioning isn t a part of the process. If business integrations are required, the costs may go up a bit. Lower TCO = Same for All Emphasys Software: A Case Study Emphasys Software provides enterprise software systems for four niche vertical markets: public housing, housing finance, treasury systems, and residential real estate. Each of their four verticals leverage WordPress; three use it for protected extranets that deliver support articles and training content, while one uses it to provide websites to real estate brokers. They also use WordPress for their corporate site and its business unit sites. Lastly, at one point they used it for four product microsites. What makes Emphasys an interesting case is that they ve actually hosted these sites for several years on-premises, and then on generic hosts (Hosting.com and Rackspace.com). Their current inventory includes 5 corporate sites, 3 support extranet membership sites, 1 e-commerce site, and 2 multisite WordPress installations, with 1 housing over 150 sub-sites. They started, like many companies do, hosting the sites on their own on-premises servers. Unfortunately, many of the rest of their existing systems were run on Windows. So, their first implementations of WordPress were on Windows as well. As highlighted above, this creates a higher support burden, as IIS is more complex than Apache. They also began noticing that they had to take the servers down monthly to apply Windows patches creating regular scheduled downtime. When the networks failed several times over a few months, they decided it was time to move to the cloud. They chose a generic hosting partner. Things improved immediately, bringing their downtime down by 50%. But they had a new problem. They d attempt to spin up a new server and would have to wait. It turned out that their hosting provider didn t support automated provisioning of servers. The result was that sometimes what should have taken minutes took days and weeks. This impacted their go-to-market flexibility because they never knew when they d have to wait two weeks to get a server deployed. Beyond the challenges of non-automated server provisioning, there were the hidden costs of ongoing operational support. Because Emphasys runs four business units that are focused on operational efficiencies, the network and support staff is part of the central office cost center. This means that costs for support would have to be recouped via recharging the divisions. They were surprised to discover that on average, each site cost them $70/month to support. This included updating WordPress, updating plugins, doing performance reviews, and optimizations. Additionally, when an internal customer would want a new feature, staff would need to make a duplicate of the site Page 7

9 locally, make changes and test them, and then deploy them to the server. Since their local environment and the server weren t identical, this occasionally created additional unintended consequences to both support costs and downtime. Lastly, the overall costs of the entire hosting infrastructure continued to grow as their deployments grew (not just in instances but in size and traffic). This led to the analysis and comparison Emphasys made to determine if a managed WordPress hosting provider would better suit them. Key Findings Here is the key data that made the decision easy for Emphasys Software. Generic hosting costs were 4x the cost of managed WordPress hosting. Generic hosting took 800x longer than managed WordPress to spin up a site. Downtime on-premises averaged 2 hrs/mo. Generic: 1 hr/mo. Hidden operational support costs equaled roughly $70/site/month. A Total Cost of Ownership Comparison Task Estimates The table below (Table 1) compares the cost drivers of our TCO analysis by task hours based on the environment selected. Table 1 - Task Estimates Cost Driver Task On-Premise Generic Hosting Managed Word- Press Hosting Needs Analysis Implementation Configuration & Deployment Disaster Recovery Ongoing Support Factors Beyond Cost Evaluate existing hardware and internal network to ensure it will support new sites and applications. Research and procure 2-3 servers per application. Acquire Domain Name Manage DNS and MX Install & Configure WordPress Test Network Performance Install Caching Solution Configure CDNs Test Integration Deploy Staging Environments Deploy Testing Environments Monitoring Daily Backups Test Backups Deploy Load Balancers Patch Servers Update WordPress Update Plugins Research Plugins Troubleshoot Performance One-off Reports Introduce New Features Integration with other Business Systems hours (Year 1) 30 hours (Year 1) 10 hours (Year 1) 40 hours (Year 1) 0 hours 0 hours hours (Year 1) hours hours hours hours (Year 1) 40 hours (Years hours hours 2-10 hours (Year 1) 5-10 hours hours hours Page 8

10 Staff Costs The table below (Table 2) takes the mid-point on the task estimates above, assigns an hourly rate, and does the cost calculation to see the comparison. In this case, the assumption for an IT engineer was an hourly rate of $50. Any hourly rate can replace it to adjust the costs below. This table only shows the staff effort (often hidden in most TCO comparisons). It does not reflect direct hosting costs. Table 2 - Staff Costs Cost Driver On-Premise Generic Hosting Managed WordPress Hosting Needs Analysis $3,500 $1,500 $500 Implementation $2, Configuration & Deployment $9,500 $1,250 $300 Disaster Recovery $9,500 $2,000 $375 Ongoing Support $35,000 $8,000 $1,250 Factors Beyond Cost $6,000 $9,500 $9,500 Hosting Costs In order to compare hosting costs, the following assumptions have been made: For an on-premises server, two Dell PowerEdge R820s were priced to support four virtualized server instances (two production and two staging). This infrastructure could host several sites, not just one. For generic hosting, Hosting.com prices for 4 of their Linux Web Cloud VMs (again two for production and two for staging). This infrastructure could host several sites, not just one. For managed hosting, the comparison was made with WP Engine s 25-site account, which includes 25 additional staging environments. Table 3 - Hosting Costs Cost Driver On-Premise Generic Hosting Managed WordPress Hosting Servers $12,000 $884/month $249/month Firewall $300 $120/month included Set-Up $0 $5,800 included Five Year TCO Summary TCO On-Premise Generic Hosting Managed WordPress Hosting 5 YR Cost $279,800 $166,165 $71,365 Page 9

11 Conclusion TCO calculations regularly differ depending on numerous factors. Available resources and talent have an immediate impact on the comparison between on-premises and outsourced hosting. Additionally, weighting of the various cost components could shift the totals. Nevertheless, a strong case can be made that four different dynamics arise from this analysis: 1. In every case, the majority of the five-year costs are not part of the pricing one normally compares when making a hosting decision. 2. Because the majority of costs are hidden staff costs, significant evaluation must be made of available staff skill and experience. 3. While relatively new, managed WordPress hosting provides significant value for enterprises considering the deployment of several WordPress sites. 4. The value increases as more WordPress sites are deployed. In summary, enterprises considering WordPress that don t already have significant staff expertise with the platform should strongly consider outsourcing to a managed WordPress hosting provider. Additionally, when selecting between an on-premises, generic hosting provider or a managed WordPress host, choose the solution that has the best 5-year TCO. About the Author Chris Lema is the Vice President of Software Engineering at Emphasys Software, where he manages new product development. He s been building hosted software solutions since 1995, when he worked at Berkeley Lab. He s also a public speaker, advisor and blogger. Page 10