Hosted services, often referred to as "cloud" services, have received a great deal of press and promotion recently.
Hosted services can be defined as contracting with an outside vendor to host network services such as electronic security, data backup, file storage, email, etc. on servers that are accessed over the Internet, as opposed to accessing a server that is physically on-site at the customer location. Typically customer data is housed on high-capacity servers that are shared among many customers.
Hosted services are often marketed as a way to decrease operating expenses and management overhead, while supposedly improving reliability. There are many companies and individuals in the information technology industry that promote moving all network services in small environments to hosted solutions. It should be noted that many of those promoting such solutions have a vested interest in selling such solutions.
It makes good technical and financial sense for some organizations to move carefully selected services to hosted solutions via the Internet. You are advised however, to avoid the hype and marketing propaganda and to look very carefully at all of the arguments for and against hosted services prior to making the jump! Some applications lend themselves very well to the hosted model. For instance, email, email virus & spam protection, and computer anti-virus protection can be hosted externally for many customers with excellent results for relatively little expense. Of course, websites have been hosted externally for many years.
While at first glance the idea of eliminating on-premises servers and all of the management overhead they require is a good idea, you are urged to consider the following:
- Many critical line-of-business software packages do not perform well under the hosted model. These include nearly any database application based on Microsoft SQL, MySQL, Oracle, Progress, Omnis, SyBase, Microsoft Access, as well as other database platforms. Databases require very reliable connections between the client desktop and where the data is stored. If this connection is interrupted, even for a very short time (a few seconds or less), the application will crash, requiring the user to restart the software, and resulting in lost productivity and possible data corruption. Note that database applications with a web front-end may indeed work well in a hosted environment, but may require significant additional expense in configuration, hosting, and administration.
- The connection between desktop computers and an on-site server is often twenty times or more faster than the organization's Internet download speed, and eighty times faster than the many business class Internet upload speeds. Database applications such as those listed above will not function over low-speed Internet connections. In rural communities, higher capacity Internet connections may not be available, and would be extremely expensive in any event.
- Standard business-class cable Internet or telephone carrier DSL connections in some areas are unreliable, with very limited options for improvement. These connections often do not come with any guarantees of speed or uptime. They are offered strictly on a "best effort" basis by the provider. This means that if the service is unavailable for any reason, the only option available to the customer to expedite repairs is to call for service repeatedly and make more "noise" than the next customer! The ISP is not contractually obligated to expedite repairs beyond "best effort".
Hosting your data with a third party provider leaves you vulnerable in several ways:
- If there is a problem, the client has no control over how or when it is resolved. In some cases the technical support call center may be based out of country, with possible language barriers. You, the customer, have NO control over how quickly a problem is resolved.
- What happens if your online data hosting provider goes out of business without notice, as has happened with a number of such firms? Where is your data? How can you access it? Can you get a copy of it? How are you going to get your data in a timely fashion when thousands of other customers are left high and dry and clamoring for the same thing? What if the hosting provider is no longer answering the telephone, email, etc?
- How secure is your data? Who has access to it? Regardless of how "secure" a hosting provider claims their solution is, the fact remains that anyone at that company with administrative rights to the servers will have access to your data. What happens if the hosting provider's network or server administrator quits on bad terms? Will they steal or destroy your data? What about sensitive data such as communications regarding legal, human resource, marketing, research, or a host of other confidential issues? How about confidential company employee information such as home addresses, home and personal cell phone numbers, social security numbers, health information, emails, etc.? High rates of employee turnover are the norm with such staffing firms.
- How secure are the servers that your data is housed on? Have all of the latest security patches been applied? Just because your hosting provider claims this is done, how do you know if this is being done on a regular basis or if a critical update has been missed, either because of oversight or negligence? What legal exposure would the client have if confidential data such as noted above became available on the Internet?
- Is your hosting provider performing regular (nightly) backup of the data? Again, how do you know? If the organization's data and/or applications are not available for an extended period, what will be the impact on the organization's ability to conduct business and server internal and external customers? When electronic data is not available every department is impacted. While some information is available in hard-copy format, the ease of locating and disseminating information in this form is cumbersome and time-consuming compared to electronic data.
Compare some of the issues noted above with having a server onsite, maintained by a professional IT solutions provider:
- With a local solutions provider, you know who to contact if there is a problem, and they have firsthand knowledge of your environment, employees, and needs.
- If your server crashes or you have some other major problem and you are unable to contact your primary solutions provider, or if you are simply unhappy with the service provided, you can simply call any of a number of competitive IT firms to request timely assistance.
- Your data and server is onsite and in YOUR control, which gives you options for service and better security.
Much of the supposed cost savings gained from moving data to a hosted solution may be negated by the need to contract for professional services to move that data and get users set up and trained. These and other "hidden" costs are often overlooked and can actually generate a net INCREASE in expenses with a hosted service. In analyzing the feasibility of moving to a hosted network services model the evaluator should keep in mind that information technology directly impacts virtually every department in the organization.
With hosted IT services, as with any technology, organizations should evaluate them based on their merit, and on marketing hype.
About this Author
Ted Miller, President
AVIK Technologies, Inc.
We manage technology, so you can manage your business!
Ted believes that most organizations, regardless of size, have the same basic information technology requirements. Regardless of whether an organization has five employees or five thousand, they have the critical needs of security, Internet connectivity, file (data) storage and protection, printing, email, backup, system reliability, etc. The difference in IT needs between small and large organizations is primarily one of scale. The need is the same, the size and cost of the solution may not be.
Ted leverages his experience on behalf of his clients by reviewing how large organizations tackle specific technical and business problems, then scales solutions in such a way as to meet the need of his smaller clients while keeping costs under control and aligned with the client's business objectives. Visit http://www.aviktech.com today to learn more about the services provided by AVIK Technologies, Inc.
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