Small business owners are known to be control freaks. The work gets done right, even if they have to do it themselves. That attitude, however, can sometimes hinder the business.
Tom Geller, CEO of Geller Communications Inc., a high-tech public relations firm in San Francisco, hosts his Web site in-house. He likes the control and also likes, as he puts it, "messing around with the internals" of his system. One day in March, however, he returned from lunch to find a fax transmission from Infoasis, his DSL provider. The message read, "If you haven't lost service already, you will."
Geller could have avoided such problems, as many other companies have, by trusting a hosting service to take care of his Web site. Outsourcing, of course, entails its own set of worries. What if they lose your data or fail to update your site correctly? What if someone hacks into their system or they go out of business? But if you're planning to host in-house, you had better have a good reason -- and an even better backup plan.
The True Cost of Hosting
Buying a Web server is no longer a wildly expensive proposition. With the price of Web servers dropping dramatically (to around $5,000 from some manufacturers) you may be tempted to host your site in-house. Encanto Networks Inc., sells one for less than $1,000; the Domino server line from Lotus ranges from $1,795 to $4,995.
"Web servers have decreased in price to the point where you or I could probably write a check and buy a very powerful Web server," says Michael Overly, a partner in the e-Business and Information Technology Group at Los Angeles-based Foley & Lardner, one of the oldest law firms in the United States. "The question is: How will you support it?"
"I can tell you with confidence that when a business chooses to host its own site, that is when the expense begins, not ends," says Sean Lapp, chairman and chief technology officer of I-Works, a Web development and hosting company in Chicago.
In other words, a Web site is more than just a server. You need to pay for Web access, software, spare parts, and the expertise of a network administrator. You should also set up a backup system, which provides what is known in the industry as redundancy. That requires a second access point, such as dial-up to supplement DSL or DSL to supplement a T1 line, as well as a second server. All that can increase costs exponentially.
"Unless your organization has redundant, high-speed Internet connections, uninterruptible power supplies, conditioned power, and someone standing by 24/7 to address problems that may arise, you are doing your organization a disservice by hosting your own Web site," says Roger Brown, president of Cool Dog Interactive Inc., a small Web development firm in Atlanta. "Web- hosting Internet service providers (ISPs) purchase these expensive features in bulk and can offer you Web hosting service that is far, far superior to what you could ever execute yourself, even with a dedicated staff of network support engineers or other information system professionals."
Geller estimates that to add a more formal backup plan to his in-house system would cost him an extra $500 or so a month, precious funds for a small company like his. Still, he says that for his company, an in-house solution is better -- and cheaper.
"There's a nice discussion system called Slash that I've been meaning to run for a long time," Geller says. "There's a mailing list server called Mailman that I run. All of these technologies basically make it easier to maintain my business, but they would have been harder to do with an outside provider, and more expensive."
Worth the Trouble?
Some businesses want to give up control. Domenick Cilea, principal and founder of Springboard Public Relations in Marlboro, N.J., pays about $100 a month to host his site with XO Communications. When his internal file server went down for an upgrade a few months back, the site remained up and Cilea's staff could still access e-mail, a critical communication method for them. "We found that outsourcing gives us reliability," Cilea says. "It gives us transparent management; we don't have to think about it."
Mike Garofalo, president of Securities Research Company, a stock-charting company in Watertown, Mass., has worked hard to develop a close working relationship with Inforonics, his host provider. SRC found that it could get better functionality by going with a hosted solution, and Inforonics has a sophisticated software program that allows sites to track visitor activity. Garofalo says he plans to use that software to justify the cost of doing business on line to his board of directors.
"You do lose some control," says Garofalo. "But if the right person is in charge, they can do as good a job as you can, if not better." Signing on with Inforonics meant that SRC didn't have to hire a network administrator. "For an organization our size, it makes sense to outsource," Garofalo says.
Geller admits that hosting your own Web site is no easy task. He chose that option only because a friend in Pennsylvania agreed to act as the company's off-site network administrator. In exchange, Geller allows him to host his site on one of the firm's three servers. The one drawback is that Geller's network problems must wait until his friend gets off from his day job as a network administrator.
"There's a lot of stuff happening on my server that I don't understand," Geller says. "If I didn't have my friend, I don't know if I would have left my host."
Know Thy Service Provider
Before choosing a provider, make sure to do some research. "Web hosting outsourced to a suitable hosting ISP should cost between a dollar a day and $20 a day," says Cool Dog Interactive's Brown. He adds that the lower end will get you a basic site with static pages, while $20 can buy you an interactive site running on a powerful Web server. "Chances are, that dollar to $20 per day is less than your organization spends on coffee."
Overly and Lapp recommend looking for a host that has an adequate disaster-recovery plan and a virus protection system in place. Also try to find a company that offers several tiers of service; you may need to add functionality as your company grows. If the company is local, visit its server farm and headquarters. You'll get a read on the company's operations and the service it gives to small companies like yours.
And make sure you check their financials because, as Geller can tell you, your business is riding on theirs.
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