“There are hidden costs for businesses that do not maintain a strong IT infrastructure. These may sometimes be intangible, but have the potential to adversely affect productivity and profitability,” says tech writer, Ben Rossi, in a recent Information Age article.
Protecting your organization’s sensitive data and developing an effective IT infrastructure has always been a challenge, but the bar keeps getting set higher. If you work with protected health information (PHI) or credit card holder information, you have to stay abreast of the latest regulations that apply to your industry, and then identify deficiencies to eliminate any physical or procedural risks to your business-critical information. You also need to hire, train, and retain a team who not only understand your IT infrastructure, but also understand how to access, update, and sync data securely across multiple devices and locations. What you may not realize is that managed hosting allows you to mitigate these issues and simultaneously bring predictability to your hosting costs.
Managed Hosting Basics
Managed hosting refers to the use of dedicated servers and services from a service provider, rather than bringing and managing your own hardware. The service provider houses the equipment at its facility, provides the day-to-day maintenance, and safeguards your entire infrastructure—from the equipment to the data that’s stored within. The effectiveness of managed hosting as a strategy is proven through the exponential growth of the market—as of 2016, the market is valued at $39.99 billion dollars worldwide and this figure is estimated to leap to more than $55.44 billion by 2018, accordingly to Statista reports.
Managed hosting can be a cost-effective alternative to building, staffing, and maintaining your own data center. Here’s how you can improve your bottom line and reduce unknown costs:
Eliminate the need for a data center. Data centers represent a major commitment in terms of cost—from planning and construction to staffing and security, and the true costs can be hard to calculate. When you build a data center from the ground up, you have to budget for demolition and site preparation, utility improvements, building permits, and delays. You also need to factor the ongoing costs of an in-house data center, which can include repairs, upgrades, re-training, scaling, and the occasional total overhaul as new technology develops. By comparison, the ongoing costs of a managed hosting contract are limited to monthly payments for services, which can include increases in costs for scaling and increasing services should your company expand. Costs for ongoing managed hosting tend to be significantly less than the ongoing costs of in-house IT and are much more predictable.
Save money on technology. Beyond the expense of designing the facility and installing the equipment, there’s the cost of researching and acquiring the right licenses for the necessary software. Maintaining and regularly upgrading the software and hardware ensures that your entire infrastructure is secure and compliant. Well-established managed service providers have existing relationships with enterprise-class vendors to negotiate better rates on the technology you need. For instance, this may entail your operating system, monitoring software, managed security solutions—firewall, intrusion detection, encryption—load balancing and backup services. Managed hosting allows you to invest in other critical projects and still have reliable, secure servers.
Reduce the need for a large IT staff, while gaining the expertise you need. With managed hosting, your software and hardware are managed by the service provider’s team of engineers, which is available 24 hours a day, seven days a week, to resolve any issues that may arise in any layer of the operations stack. This is especially helpful for small to mid-sized businesses that can’t afford an around-the-clock IT department. Plus, your provider spends time and money ensuring each employee has up-to-date certifications and training to meet the current IT standards and security regulations. If you were to seek this expertise elsewhere, you may be looking at steep consulting fees. According to Payscale, a Security Consultant charges upward of $99/ hour, depending on their level of experience.
Philip Casesa, director of product development and portfolio management with (ISC)², explains that certifications offer a good foundation for cybersecurity: “Certification validates that a security professional has a specific set of skills and capabilities.” However, he also encourages professionals to gain experience in security given today’s threats.
To Casesa’s point, this is where the importance of choosing the right service provider comes into play. Choose a managed hosting provider that specializes in security and compliance, and has demonstrated their expertise through third-party accreditations—i.e. SSAE-16 audited and certified. There is a difference between those organizations that are “compliant” versus those that have taken an extra step to become “certified.”
Plan for the unexpected and greatly reduce downtime. Most of you worry about your sensitive data being available, 24/7. Managed hosting can help you achieve that goal with services to protect your data in the event of a disaster by using backups and disaster recovery as a means to keep your business operational. Service providers, like OnRamp, work closely with clients to build a comprehensive, compliant disaster recovery solution that blends compliant colocation, private clouds, and cloud-delivered services. Your provider will assist you in setting a recovery point objective (RPO) and recovery time objective (RTO) so you can recover quickly and avoid costly downtime.
Industry experts estimate that the cost of downtime for a mid-sized business (those with $100 million in annual revenues) can amount to hundreds of thousands of dollars in lost revenue and productivity. In a 2015 report by IHS Markit, 400 mid-size businesses were surveyed, and the results showed that each business had an average of five downtime events per year, which cost them about $1 million each.
There are clear benefits of choosing managed hosting, especially when it comes to reducing unknown costs associated with a weak IT infrastructure and establishing predictability within a secure and reliable environment.
Would you like to continue learning about managed hosting? Download OnRamp’s Guide: “Top 10 Questions to Ask Your Managed Hosting Provider” to help you make an informed decision.
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