InformationWeek
Defining The Business Value Of Technology
|
October 16, 2000 |
 |
A Safety Net For Your Web Site
Instituting the right service-level agreement can make sure vendors live up to their promises
By Norbert Turek
 |
| More on service level agreements: |
|
|
 Send Us Your Feedback |
ow much is your Web site worth? How much would it cost your company if your site went down for a half-hour? And what would be an appropriate penalty for a Web-hosting company that failed to keep your site up and running?More companies are asking these types of questions as they contract for Web-hosting services and work out service-level agreements that specify downtime guarantees and penalties.
At the same time, a growing number of Web-hosting companies are finding that offering clear and enforceable high-performance SLAs with financial penalties can be an effective sales tool. The growing importance of SLAs has also created another fast-growing market. Many companies, especially those that have a limited technical staff or are located far away from their Web servers, hire vendors to monitor site performance or take over responsibility for site management under the same type of high-level SLAs.
For IT managers, the first question they need to ask is how reliable the Web site has to be. The cost difference between 99.99% reliability and 99.999% can easily be tens of thousands of dollars a month. Then it's a matter of sorting through the guarantees and SLAs offered by various Web-hosting companies and finding the one that offers just what you need in a legally binding form.
When it comes to managing the Web portion of a business, common sense isn't enough. For dynamic, high-traffic Web sites, a multitude of inter-related components and vendors must work together. This creates an environment in which IT managers may have a hard time finding out what caused a particular Web site to black out. But finding the cause is important to determine what areas need to be patched or upgraded, as well as whether a particular vendor has met the expected, and contracted, level of service.
SLAs have two basic functions. During early negotiations, a vendor's detailed service-level agreement can be the basis for discussing available services and their relative costs, planned responses to emergencies, and how unexpected problems, such as continued failures, are handled. Once a Web-hosting service has your business, the service-level agreement then becomes the reference for determining if a vendor has met its promises and, if not, what penalties are due.
Bad SLAs can create as many problems as good ones solve. Meta Group program director Corey Ferengul says one of his clients estimates that its Web site is down an average of eight hours a week, which costs the company $1.5 million in revenue. Aside from credit for the downtime, Ferengul says, the client has no recourse or SLA exit clause, which would let the company leave the hosting service in the event of persistent site failures. "Like most SLAs, it has no teeth," Ferengul says of the agreement.
But several Web-hosting companies, including Conxion, Intira, and NaviSite, are building their business models on strong SLAs. Intira offers fully-managed Web hosting--not including the application, which is provided by the customer--and offers one day of free service for each 15 minutes of downtime, with a maximum of one month free each month. Conxion's Fairsafe Hosting service offers one free day if the site is down for 26 seconds. NaviSite gives one free day for each five (accumulated, not consecutive) minutes of downtime with its premier service.
Such offerings can help demonstrate a hosting company's confidence in its ability to provide virtually continuous service. David Lawler, director of product management at SiteSmith Inc., a provider of outsourced Web-site operations and monitoring, says it's also a way for some companies to discount the cost of service, which can run to millions of dollars a year for high-end Web hosting.
Some companies would rather have continuous uptime than discounts or refunds. MiracleMail.com Inc. in Farmingdale, N.Y., is a Web site that offers consumer services such as free Web sites, E-mail, fax, long distance, and health-care products. Part of MiracleMail.com's marketing strategy is to pay commissions or referral fees to customers who get other people to sign up and use the services. CEO Larry Marcus says virtually 100% uptime is essential in his business model. "If you can't get onto your Yahoo account, maybe you'll leave Yahoo," he says. "If you can't get onto MiracleMail.com, you might tell 10 people who tell 10 more, creating a cascade."
Marcus says his Web-hosting agreement with Intira costs an average of $60,000 a month over three years. That's only 6 cents per subscriber per month, based on 1 million subscribers in the company's business plan.
While Intira's price was "more expensive than most, and much higher than some," Marcus says, it includes a back-office monitoring service that checks 400 discrete points in the overall hosting network. Another plus: While some hosting companies force a customer to prove that a Web site was down and submit a request for a refund or credit, Intira automatically credits Marcus' account if the 15-minute penalty time is reached. Andre Bartels, director of product marketing at Intira, says some companies may have separate SLAs for their network, server infrastructure, security, and co-location services. "The client becomes a mediator for all the SLAs. That's not a job most people want," he says.
continue on to page 2
ACCO Brands Corp seeking Director of New Product Development in Lincolnshire, IL
Transportation Security Administration seeking Chief Information Officer in Arlington, VA
Hebrew SeniorLife seeking Business Systems Analyst in Boston, MA
Trilogy Leasing seeking General Manager in Cranbury, NJ
UVIMCO seeking Senior Information Technology Leader in Charlottesville, VA
For more great jobs, career-related news, features and services, please visit our Career Center.
Back to This Week's Issue
Send Us Your Feedback
Top of the Page
Today's Top News
Featured Microsite
