Organizations are weighing in on what type of infrastructure they need today and in the future to keep up with business growth. One of these options is managed hosting. Organizations find that outsourcing the daily functions of maintaining hardware and the software offers more benefits and value than managing their infrastructure on their own. Furthermore, it’s a good alternative for those who want to take advantage of the cloud, but cannot use private clouds.
In this comprehensive guide, we’ll examine important considerations for those of who are interested in learning about managed hosting services. You’ll learn about the differences among hosting options, and you can determine if colocation, managed hosting, or a cloud solution the best way forward. Beyond determining which method or methods are best for your workloads, we’ll share tips on how to cut unnecessary costs in a managed hosting environment. We’ll close with what to look for in your service level agreements (SLAs) as not all managed hosting providers offer the same value.
Managed Hosting Basics
Managed hosting refers to the use of dedicated servers and services from a service provider, rather than buying 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 was valued at $39.99 billion dollars worldwide, and this figure is estimated to leap to more than $55.44 billion by the end of 2018, according to Statista Reports.
Colocation, Managed Hosting, or Cloud Solutions: Choosing the Right Options for You
One way to ensure that your technology grows with you and does not become obsolete is to outsource some, or all, of your data center equipment and services. For instance, even if you have already built an onsite data center, eventually you will need more space, support, and will want to take advantage of newer technology. You could keep your data center in-house and expand your facilities, or you could explore the benefits of three types of outsourced data center services: Colocation hosting, managed hosting, or private cloud hosting.
When you evaluate these options, you should consider your budget, capacity, flexibility, and security needs.
Colocation is a smart choice if you already own the IT equipment you need and want to maintain control of software decisions, upgrade cycles, and your server hardware, while reaping the benefits a colocation services provider.
- Experience: Colocation providers offer knowledge and expertise that help you maintain your equipment and respond to problems without having to increase staff or allocate additional resources.
- Cost Savings: Building a new or expanding an existing data center to house your IT infrastructure as your business needs grow is significantly more expensive and time-consuming than partnering with a colocation services provider. You have the potential to run into roadblocks in the form of constraints, such as limits imposed by building regulations or electrical supply sufficiency.
- Protection Against Disaster: By storing your equipment in a separate facility from your company location, you potentially gain some benefits for protection and recovery in the case of disasters, such as power outages or severe weather events.
- More Choices: Colocation allows you to separate decisions about expanding or moving your office space or business location(s) from your data center space needs. Doing so will give you more choices and greater flexibility to meet your location needs as your company grows.
Managed hosting allows you to take advantage of your service provider’s investment in equipment rather than purchasing your own.
- Cost Savings: You can lower your costs with managed hosting. Purchasing services is often far less expensive than building a data center from scratch and buying and maintaining your own IT equipment and infrastructure.
- New Technology: If your company is growing rapidly, managed hosting services providers can be better positioned to keep up with fast-changing technology. You can benefit from their focus on maintaining current technology with dedicated support staff.
- Reduced IT Staffing: Managed hosts staff their centers with professionals, meaning you don’t have to. This allows you to focus on your company’s industry, products, and services, rather than IT solutions and updates.
- Alternative Solutions: Managed hosting services often offer hybrid solutions using both traditional data servers and cloud services. Providers can better keep up with multiple cloud technologies rather than limiting your business to one option and the need to regularly evaluate new offerings in the marketplace.
Private Cloud Hosting:
Cloud hosting service providers offer benefits from their economies of scale, which frees up capital and resources to invest in your primary business rather than in support operations.
- Flexibility: If you need flexibility in your IT solutions, private hosting allows you to customize your cloud to meet your needs. Whether it’s platform type, disaster recovery, or high security, these services offer cost-effective and efficient choices.
- Regulatory Compliance and Security: If you are in an industry that has specific compliance or regulatory requirements, private cloud hosting can be an excellent choice. For example, healthcare companies must comply with electronic protected health information (ePHI) and HIPAA regulations. HIPAA private clouds can help those companies meet and maintain necessary data protection standards. Look for clouds that have been certified and offer a layered approach to logical security.
- Cost Savings: No capital investments, no need to install the necessary components in an in-house system to be disaster-proof or regulatory compliant.
Get Rid of Unnecessary Costs with Managed Hosting
“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 understands 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 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 unnecessary costs:
1. 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.
2. Save 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.
3. Reduce Staffing Needs
With managed hosting, your software and hardware are managed by the service provider’s team of engineers, 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.”
4. Plan for the Unexpected and 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.
Assessing the Managed Hosting SLA: How to Make Sure It’s Right for Your Company
Let’s face it, your business can quickly outgrow your in-house infrastructure. One approach to accommodating the increased demand for your organization’s time, talent, space, and equipment is to move to colocation, managed hosting, or a combination.
Whether you place your servers and equipment at a service provider’s location, or store your data on a vendor’s managed cloud environment, outsourcing some or all your infrastructure and its management can offer your company many efficiencies and savings. The key to making the most of your colocation or managed hosting relationship is by ensuring your service level agreement (SLA) meets your needs.
The SLA is the contract that governs service provision and delivery expectations of both the provider and client. A poorly drafted SLA can lead to disappointment with the service, or worse, cause harm to your business. Let’s look at the key areas to consider before signing a service agreement:
- Start with a review of standard forms from major providers to get a sense of common provisions in an SLA.
- Put together a team of business and IT leaders in your company to review your business’ needs and create a wish list and must-haves for your hosting needs. As you negotiate your SLA with a service provider, use this team to review the document to ensure you have spelled out key points as clearly as possible. Even after the SLA is in place, the team should continue to meet to review reports and suggest potential revisions as needs and technologies change.
- Service agreements often contain vague language. It’s important to include specifics about the responsibilities of both the service provider and the customer. For instance, “guaranteed uptime” is meaningless. The SLA should describe the definition of uptime, the percentage of time secured, the maximum response time, incident notification procedures, and reporting requirements. It should also acknowledge policies, warranties, and legal responsibilities.
- Your SLA should describe customer requirements and define service levels as precisely as possible. Customers should not only look for details of how, and under what conditions support will be given, but also negotiate desired performance, as well as requirements and practices, such as server availability, storage capacity, and how to report problems. It’s unlikely you’ll be able to get unconditional guarantees, but any defined terms will be better than default standard language designed to apply to mythical corporations.
- You should include a schedule for reports that the vendor will send. The team you bring together to negotiate the language in the SLA should review these reports over the life of the service contract.
- Another aspect of reporting to include is your ability to generate your own reports on your own with access to your network or independent monitoring. Consider what information you need and see if there are ways you can obtain it if your vendor doesn’t provide it or if you need information more frequently than they offer.
- Data within the cloud requires multiple levels of protection. Physical servers are subject to the same dangers no matter where the equipment resides. Firewalls, intrusion detection, and two-factor authentication are just several ways providers offer mitigation. But, it’s important that you know how your service provider will respond, repair, or reimburse you if something does go wrong.
- Technology changes rapidly. If your company is growing quickly, your needs can shift well before the SLA ends or is up for renewal. Therefore, you should understand how your service (and service agreement) can be customized and scaled over time to fit ongoing business needs. It’s better to anticipate that you will want to make some changes along the way rather than running into a roadblock and having your work slow or come to a halt.
- If you are in an industry that has data security and privacy regulations, such as healthcare, for example, you must investigate your service provider’s ability to comply with those requirements. What experience do they have working with organizations in your industry? Do they have necessary certifications? If you don’t know your service provider’s knowledge of applicable regulations, you’re putting your company at risk for legal and financial liabilities. You must have a separate business associate agreement that states how your provider will take “reasonable and appropriate steps to protect sensitive data.”
- Research service agreements and checklists of commonly included items to create your own checklist that will guide your review and ongoing management of your SLA. For instance, we created “The Top 10 Critical Questions to Ask Your Managed Hosting Provider” for you to continue to vet providers closely.
At this point you should have a well-rounded grasp of managed hosting and whether or not it is a potential fit for your business.
OnRamp’s secure managed hosting services are designed for compliance, availability, and performance using state-of-the-art hardware technology. Our trained support team understands the complexities of protecting sensitive data. Whether you choose managed servers or cloud configurations, you’ll benefit from a dedicated environment, high-performance encrypted storage, compliant data protection, optimized application delivery, and industry-leading security services.
Our knowledge and expertise in delivering highly available computing resources in a trusted security model makes us a leader in secure and compliant managed hosting services. Request a consultation from an OnRamp expert today!