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SmartAdvice: Define Data-Center Needs Before Selecting Hosting Solution

Outsourcing your company's data-center management can be cost-effective, but make sure you first understand the options, The Advisory Council says. Also, compare J2EE and .Net for building distributed, service-oriented applications, and learn how to become a player in organizational politics.

Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers three questions of core interest to you, ranging from career advice to enterprise strategies to how to deal with vendors. Submit questions directly to smartadvice@tacadvisory.com


Question A: I've been thinking about hosting solutions for my data-center needs, but I'm confused about the services available. What are my options?

Our advice: There's no doubt that outsourcing your data-center operations for mission-critical systems can be a cost-effective solution. For many smaller companies, using a hosting service is the only way to gain access to the resources of an around-the-clock fully managed data center. However, the market for these services is in flux right now, with a plethora of confusing choices and options as companies jockey for dominance.

Some providers offer several data centers for redundancy, while others offer always-available live support. There are platform-based, or international and domestic options. Here are a few pointers to help you understand the thicket of options and acronyms for hosting solutions, so that you can find the services you need at a reasonable price:


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  • Shared Hosting is the cheapest and most widely available option for Web sites. You share the equipment with a number of other customers (you will never know who). The advantage is that this option is dirt cheap (under $10 a month), but don't expect much service or anything customized.
  • Co-Location means you provide the equipment, but the hosting company provides the infrastructure. Can be very affordable, but many hosting companies limit your options. Watch out for additional charges to access your equipment for servicing.
  • Dedicated Hosting means that you have the use of the entire machine for yourself. It has some advantages if you need specialized software or high volume.
  • Managed Hosting or Managed Service Provider (MSP) is similar to dedicated hosting, but the provider manages all the system administration tasks, including backup, disaster recovery, hardware maintenance, system patching, and upgrades. There are many options available, so you're able to pay for just the level of service that meets your requirements.
  • Application Service Provider (ASP) means that unlike generic hosting, the provider has developed a specialized application available on a monthly or yearly basis. It's usually priced based on the number of users. This can be a very attractive model for smaller companies that need to use expensive applications like CRM, ERP, or supply-chain software that they would otherwise not find affordable.
  • Once you're familiar with the terminology and offerings, it's essential to define your requirements as much as possible before speaking to vendors. That will help you limit the options to a manageable number and help you compare the providers' offerings fairly. Managed hosting, co-location, and ASP are all good options for reducing your IT costs, but only if you do your homework.

    -- Beth Cohen

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