Network Services: What Are Your Options?

By Beth Cohen | Posted December 18, 2002
By Beth Cohen

I recently consulted with a company that had a mission critical financial and project management application that had thousands of network hits a day. The company had been supporting the system in their so-called data center — OK it was more like a data closet, well really just a closet. At least the server was not sitting under somebody's desk! When the company's systems administrator left the company, I suggested using a managed service provider (MSP) for systems support. For about $200 a month, the company "hired" a fully supported server system and no longer needed a full-time UNIX systems administrator anymore.

Wow, is it that cheap? It sounds too good to be true, but it is true.

In yet another example of the advantages of using a MSP, I recently worked on a project to create a website for WIND, a non-profit organization helping unemployed professionals network to new positions. The organization has no budget — strictly a volunteer rotating labor force — and no facilities. That is, they have no equipment room, no hardware, and no place to put any server system. Whatever they did needed to be extremely inexpensive and virtual, so anyone with authorization could access the server from nearly anywhere.


After talking to a couple of local non-profits to see if they would be willing to host the site, I researched commercial sites. P.J. Gardner, information architect at Gardner Information Designs, Inc. and WIND Web project team lead said the group found a large number of companies that offered good services for very reasonable prices.

"For under $50 a month we were able to select two shared Linux servers, one for development, and one for production, in a fully staffed data center," Gardner said. "The service included a complete set of website development tools, including Tomcat, MySQL, Java, Perl and 400MBs of disk. What more could we ask for at that price?"

Basically, there are three options for supporting servers and applications:

  1. DIY: Do It Yourself,
  2. COLO: Contract for Colocation Services, or
  3. MSP: Secure a Managed Service Provider

Each option for network server support has its advantages and disadvantages. Depending on your business needs, one solution or another will be best suited for your company's situation. The best methodology will depend on your specific business and budget.

What are the differences between these three solutions? Let us look at each method in turn with a discussion of the advantages and disadvantages of each solution. Are there some best practice guidelines about which approach to take for your systems? What follows are the pros and cons of outsourcing your server support.

DIY: Do It Yourself On-Site Administration
First, there's the old-fashioned method — doing it yourself. "Do it yourself" means you use the equipment you already own including servers, network connections, and all infrastructures of your existing company's computer network. You provide all systems, network and hardware support. This means that if you have a big external site, the access bandwidth is coming out of the same bandwidth you use for your company network. If your system disk crashes or your site is compromised, you are completely responsible for maintenance and repair. Ten years ago, this was really the only way to support your servers, many IT people do not think about supporting their systems any other way.

Advantages: You own everything and if anything goes wrong, it is completely your responsibility. There are no third-party providers to blame. Today, unless you already have a large external facing infrastructure (i.e. a data center), there are no real advantages to using your own resources for supporting your external facing servers.

Disadvantages: The disadvantages are endless. Unless you are an expert systems administrator with experience managing a data center, you are potentially exposing your company network and servers to outside security attacks, power problems, network service interruptions and a myriad of other things that can go wrong with a computer system. If your system is already installed on-site, you are all too familiar with these headaches. Do not underestimate the damage a denial of service attack can cause to your corporate Internet connection. You will have many unhappy external customers and internal employees.

Since DIY network server support costs are buried in your general IT budget, it is very hard to quantify your actual expenses, but they can be quite high in terms of lost productivity and risk. The reality is that this approach can be very expensive, unless you have a large installation and staff to support it or you already have a data center that you are maintaining already.

COLO: Colocate Your Network With Third-Party Resources
With the colocation option, you are purchasing the right to place your own equipment in the service provider's data center. That is, you place your company's servers on rented rack space in a fully supported data center. If you are lucky, sometimes the data center will supply keyboard, mouse, and monitor. Everything else is your responsibility: keeping out hacker and crackers, system upgrades and repairs, monitoring and managing services, and so forth. Many providers do not even offer this service, since it can be quite expensive for the provider to do so.

Advantages: Colocation is ideal for keeping maximum control of your equipment and your systems. If you already own the system, it could save you the cost of purchasing a new one. You do gain the advantage of using the MSP's bandwidth and support services. If you have a particularly unusual set of systems and application requirements, this may be your only option.

Disadvantages: Most of the larger application service providers (ASPs) and Internet service providers (ISPs) do not even offer colocation services, except to their very largest and most valuable customers. Speaking from the ISP perspective, ISPs hate colocation customers. They are expensive to maintain, pose a security risk to the data center, are difficult to administer and generally make it more challenging to manage the data center. Genuity used to offer the service until someone ran the numbers and found that it was actually costing the company more money that they could possibly get back in revenue. They offered all of their colocation customers upgraded managed services for the same price and Genuity still made money on the deal!

Would you trust a company that allows unescorted visitors into its data center? Although you do get access to the high quality infrastructure, your provider might limit machine access time for maintenance and upgrades. The more reputable companies provide an escort for machine access, but watch out that, those time charges can really add up quickly if you have a major system upgrade planned. The costs for this option vary, it might be less than a dedicated managed server, but it is unlikely to be cheaper than a shared managed server. Either way, when it comes to colocation, it pays to shop around for a solution that's right for your business.

MSP: Turn Your Network Over to a Managed Service Provider
A MSP provides delivery and management of network-based services, applications, and equipment to homes, offices, or even other service providers. Managed service providers can be either hosting companies or access providers. Their services can range from fully outsourced network management arrangements, including advanced features like IP telephony, messaging and call center management, virtual private network (VPN) access, and managed firewalls, to simply providing webhosting services for your company's external website. Initially, ISPs offered these types of services starting about 8 years ago, when they found that they could sell extra capacity in their data centers to their customers.

MSPs usually offer a myriad of options to choose from; including, but not limited to the amount of disk space, number of processors, platform (usually Linux, Windows or Solaris), server access (web based, file transfer protocol or telnet) and scalable bandwidth. MSPs come in two basic flavors — shared or dedicated. Shared services mean that your system is located on a server with other businesses and dedicated services mean that you basically own the box.

When you purchase a dedicated server, you are buying the use of an entire machine reserved for your use alone. The MSP still builds the machine for your business to their standard specifications and supports it fully. You will generally have more flexibility about what tools you are permitted to install and nobody but you can crash the machine (an unlikely scenario nowadays). If your application is large or you require specialized software, this may be the only option available. The cost for a dedicated server can be surprisingly reasonable, starting at around $150 a month.

If you are on a tight budget and you have a standard application, such as a storefront web server or brochure ware, you might consider a shared solution. Again, as the dedicated option outlined above, you can choose the amount of disk space, available bandwidth, platform, and tool set to work with. Be aware, when you buy shared services; you are sharing a machine with other customers. It sounds dangerous because you will never know with whom you are sharing your site, but it is completely transparent and secure. If the MSP is at all reputable, this can be a very inexpensive and secure option. If you find this arrangement makes you nervous at all, pay the extra money for a dedicated server.

Shared services are not only for web hosting either. You can purchase helpdesk services, disk storage, enterprise-class systems, or almost any type of system you need. This is the ASP model of providing managed services. A few years ago during the Internet boom, everyone thought that ASPs were going to be the next wave of a great IT transformation. So far the promise of the ASP industry has not fulfilled the hype, but for the right application, this can still be a viable and cost effective option.

Advantages: The advantage to using a MSP is that you are able to purchase the service and support for a wholly managed solution from a data center that your business would otherwise never be able to build, afford or maintain by yourself. These data centers are constantly updated with the latest security methods and systems technologies — another expensive headache you do not need. Outsourcing your server support can be a very cost effective approach because you can purchase exactly the services that your business needs — when you need them. Expanding your online business is as simple as purchasing additional services. Numerous large and small companies provide these managed services — ranging from WorldCom and ATT to small, specialized downstream providers.

DisadvantagesThere are some disadvantages to choosing this service model. If you have any special requirements, you will need to find a MSP that has the special tools to customize your applications or systems that you need. Since hundreds of companies provide these services, it should not be difficult to find what you are looking for, but the more specialized your needs, the more dependent you are on a specific provider. Another potential downside — this industry is going through a serious shakedown. Many providers will washout in the next few years as the industry consolidates. One way of minimizing your risk is to use two MSP companies — if one goes out of business, you will have time to transfer your account to another with no service disruption.

Let's face it, when you outsource your network services to a MSP, you are literally putting all your eggs in another company's basket. It's important to thoroughly research your options before commit to any third-party business.

There are five key questions to ask when choosing an MSP:

  • Business track record: How long has the company been in business, what are its prospects for the future? Check its Dunn & Bradstreet rating.
  • Quality of facilities: What does the facility look like? How many data centers does the company have? Does it have fully redundant power and network connectivity? Is it subleasing space from another provider?
  • Upstream providers: Who is the MSP getting is Internet service from? Does it have multiple network access points?
  • Administration tools: Does it have a set of administrative tools for you? Are they easy to use and secure?
  • Technical support: Are technicians available ardoun-the-clock? Does the MSP guarantee response times if there is a issue? Is the MSP proactive when there is a problem?

The Bottom Line
Your company's website, Intranet, enterprise resource planning, accounting and other systems are all business critical functions. In the past, you have always supported them on-site, but you know that your IT resources are stretched very thin. Does it make sense to move your application servers to a MSP instead of supporting them in-house or using a colocation service? Probably. A MSP can offer your business security, different levels of support, and bandwidth all for a price that you could never hope to match any other way.

Beth Cohen is president of Luth Computer Specialists, Inc., a consulting practice specializing in IT infrastructure for smaller companies. She has been in the trenches supporting company IT infrastructure for over 20 years in a number of different fields including architecture, construction, engineering, software, telecommunications, and research. She is currently writing a book about IT for the small enterprise and pursuing an Information Age MBA from Bentley College.

Adapted from CrossNodes, part of the EarthWeb Network.

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