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The critical Web server decision: Should you host our outsource your company’s Website?

(An article I originally wrote for Windows 2000 Experts Journal near the end of 2000)

Who will benefit from this article: NT administrators, Web managers who are trying to decide whether they should host or outsource their corporate Web site.

What you’ll learn: The benefits and challenges of hosting your Web site versus collocating it with an Internet Service Provider.

Bottom line: The e-business explosion has put an absolute premium on your company’s Web site. Whether brochureware or e-commerce characterizes your company’s Web strategy, it’s important that you choose the right management approach. The reliability and performance of your site depends on it. In this article Northrup gives you sound advice and guidelines on making the critical decision to keep your Web site management within corporate walls or to offload that responsibility to a third party.

Questions to help frame your decision

The Internet is changing the way companies do business.  Indeed, it is changing business itself; all forward-thinking companies have, or are developing, a Web presence.  Business needs will also drive how the Web site will be set up.  You’ve got lots of decisions to make, and each one affects how you deploy your site:

• What services will you offer?  Ie.,, are you simply creating an on-line brochure, or will you allow people to buy your products online?  Do you need personalization or collaboration features?

• Which front-end applications will you use to offer those services?  Apache, IIS, Netscape, Net.Commerce, BroadVision, Site Server, etc.

• Which back-end applications will you use to support those front-end services?  Ie.,, Microsoft SQL Server, Oracle, Sybase, DB2.

• Which operating systems will you use to run these applications?

• Do you require connectivity to a legacy database system?

• How many users do you expect to visit your site?

• What does it cost you when your site is offline?

You’ll have to answer these questions on your own.  With these issues in mind, this article will let you make two very important decisions that will direct the future of your Web site. 

• Will you host your site on your facilities, or collocate the servers at an ISP?

• Will you manage the operating system, or would you rather outsource the systems management?

Collocation vs. In-House Web hosting

Many corporate Web sites begin with a small server hosted in the company’s existing facilities, using Internet connectivity already in place for employee Internet access.  As the site grows, this model may no longer work.  While larger sites benefit more from collocation, some of the largest sites on the net (like Microsoft.com) are hosted primarily in company-owned data centers.  So, how do you determine which method is right for you?

Bandwidth and reliability are key advantages of collocation

Your company Web site is your Internet presence—so why not put it directly on the Internet?  Most ISPs offer collocation services.  They have a data center on their premises and will connect your servers to their own network—with much more reliable bandwidth than you can provide on your network.  Even better, you don’t have to share bandwidth with your corporate users.  In other words, your streaming MP3s won’t slow down just because your Web site gets busy

A typical small- to medium-sized corporate network has one or two T-1 connections.  This may be more than enough for your users to surf the Web and receive their e-mail—but is it enough for your Web site?

Tips for monitoring your bandwidth requirements

How do you know if you have enough bandwidth?  If you currently have a Web site running, you should have a pretty solid idea of how much bandwidth you currently use.  Windows 2000 makes this easy, as figure 1 shows.  Just use the Performance utility and monitor the “Bytes Total/sec” counter within the “Network Interface” object.  Naturally, you want to have sufficient bandwidth for your busiest times—so monitor your Web server for a period of a week and choose the highest peak bandwidth for your calculations. 

Figure 1

The Performance utility uses bytes per second, instead of the more common megabits per second. To express it in megabits per second, you’ll need to multiple the peak bytes per second by eight (to convert to bits) and divide by one million.  Once you’ve done these calculations, you’ll know how much bandwidth your Web site is currently using.

Rule of thumb: If the number is 60% of your current total bandwidth—you need more right away!  This is especially true if you are sharing Internet connectivity with other servers or your users.  If you’re less than 60%, but you have plans to make your site busier (who doesn’t?) you may also need to upgrade. 

Seriously consider hosting your site with your ISP so your network connection doesn’t become a bottleneck.  If you’re on their network, their bandwidth is your bandwidth.  And, if your Web site grows suddenly, the ISP can increase the size of your pipe much faster than you could purchase additional leased lines.

Redundancy: reducing the cost of downtime

Most companies don’t have redundant network connections; all good ISPs do.  Can you tolerate being offline for hours because a farmer cut your T1 with a backhoe? 

Cost is the key to determining the importance of redundancy.  In the introduction, I asked you to estimate what it cost you when your site was offline.  This number will be different for every reader, and the variance will be huge.  E-Commerce sites can lose hundreds of thousands of dollars an hour in advertising revenue and sales.  On the other hand, company Web sites that act simply as online brochures may only irritate a handful of users when the site is down.  We’ll use a small- to medium-sized e-commerce site as an example, with a cost of downtime at $5000 per hour.  Consider the following table:

99.9% uptime is pretty good for a T1.  It just takes one clumsy construction worker to bring your leased line down for a day—so, is it worth it to our example company to buy another T1? 

Pricing it out: The average price of a T1 with Internet connectivity is about $12000/year.  If our example company were able to get another fully redundant Internet connection, it would reduce the downtime associated with a broken Internet connection to almost nothing.  This would yield a cost savings of about $30,000/year… on top of the benefits your corporate network receives from the improved uptime.

As you can see, redundant connections are a must if you host your Web site on your corporate network.  However, your corporate network can never be as redundant as your ISP’s.  After all, your connection ultimately crosses their network!  In general, the closer you can get to the Internet backbone, the better.  This means that Tier 1 ISPs are generally better than Tier 2 ISPs, and you should steer away from Tier 3 ISPs.

Avoid bandwidth battles with corporate traffic

You should already know the total amount of bandwidth your company has to your ISP.  But how much of that is available to your Web site?  There is no definite answer, because it will vary from day-to-day.  Similarly, the busier your Web site gets, the less bandwidth your users will have.

If you can wait two or three years, Quality of Service network standards will be in place and will allow you to prioritize traffic over a single connection.  This will allow you to guarantee a specific amount of bandwidth to your Web site and to your users, while keeping both of them on your premises.  Until QoS is common, you will need to purchase separate Internet connections for your Web site and your users.  This is a costly solution, and it means you won’t be using your bandwidth as efficiently as possible. 

So, if you need the bandwidth that your Web site and your users consume to be predictable, collocating your Web site with an ISP is the best solution. 

The argument for holding on to your Web server

Hosting your site in an ISP’s data center is great—if you have the budget.  But, there are advantages to keeping your Web servers in your own office.  If you need to run over to the server and flip the power switch, it’s much easier if it is just down the hall instead of across town.  For small sites, it’s generally much cheaper to host it on your own network.  Finally, if your site isn’t too busy, you may be able to use your Web server for other services.

Response time and hands-on management are the big benefits

How often do you physically walk to your Web server?  It is certainly possible to manage Windows NT and Windows 2000 servers remotely, but many of us still spend plenty of time in the server room.  Remote management tools fail, and sometimes you just need a directly attached keyboard and mouse to reboot your server.  No matter how reliable your software is, you’ll always have to take a walk if you need to replace a hard drive.

Many companies choose to keep their Web site on their corporate network just because they like the “hands on” style of server management.  If this sounds like you, you’re probably better of keeping your Web site on your own network. 

If the benefits of collocating sound too good to pass up, there are ways to solve the proximity problem.  If you’re located in a city, you can collocate with a nearby ISP.  If something goes really wrong, your server is just a short drive away.  Alternatively, you can have the ISP manage your server for you… We’ll discuss this in more detail later in the article.

If you don’t need the bandwidth and reliability that collocation offers, you can save some serious bucks by keeping your servers on your own network.  If you use your Web site just as an online brochure, the additional cost of collocating probably isn’t worth it for you...  and you can save your money for something you really need—like a larger monitor!

Save resources and cut costs by consolidating Web services

Obviously, if you plan to keep your Web site on your ISP’s premises, you’ll need to pay for a brand-new server.  If your budget is tight, you may be able to get by adding IIS to one of your existing servers.  Of course, don’t expect too much from your Web site—it will be competing for processor cycles with all the other tasks you have it doing.

If you do plan to use your Web server for other tasks, try and combine it with other Internet related services.  Good choices are a proxy server, an e-mail server, and a VPN gateway.  If your demands are minimal, you can improve security by placing all of your Internet services on a single server and making that system the only one connected to the Internet.

No matter how you configure your server, keep a close eye on the system performance.  You’ll want to make sure that all the services are getting the resources they need.  Generally, the processor is the bottleneck—so fire up that Performance administrative utility and watch the “% Processor Time” counter within the “Process” object.  This counter allows you to determine whether all your services are playing nice—or if one of them is being greedy with the processor.  Pay particular attention to the process named “Inetinfo”—that’s IIS.

What about actual administration? Should you outsource or do it yourself

If you opt to collocate your systems, why not take it a step further and have someone else manage your site?  Many ISPs and ASPs offer Web site management services.  Taking advantage of these services can make your life much easier—especially if you’re not interested in having “Webmaster” appear on your resume.

Outsourcing options: varying levels of management for hire

More and more, companies that are serious about their business are handing the keys of the server over to someone else.  Outsourced Web site management comes in many different flavors.  The more services you outsource, the fewer people you will need to hire.  Yet, you don’t have to give up more control than you’re comfortable with.

At a bare minimum, you can let your ISP just manage your server hardware.  They’ll swap out a hard drive if it fails, and call the vendor for you if something goes really wrong.  You retain full administrative responsibility over every aspect of your operating system and applications

A step up from simply managing hardware is to allow your ISP to perform backups and restores of your system.  Most hosting providers have a shared backup infrastructure, and using it to keep your system safe is as simple as installing a backup agent on your server.  If something fails, or if you need to recover a lost file, just call your provider and ask them.  This level of management is almost a necessity if you’re not hosting the servers on your own network—you don’t want to have to drive to your provider’s premises and swap tapes out. 

It’s also a great idea to let your provider monitor your systems for you.  If something breaks, they can quickly determine whether it’s your server or their network.  If it’s something you have to fix, they’ll call or page you.  Better yet, if it’s their fault, you don’t have to be woken up over it.

You can save yourself a lot of trouble if you feel comfortable giving your provider administrative rights over you system.  Managed hosting services will administer the operating system and many of the applications on your server.  If something breaks within the OS, they’ll fix it for you.  This may not seem like a big deal right now—but it will the next time your server blue screens at 3am.  Depending on the skill level of your provider, they may even do a better job than you!  A really great hosting provider will tune the security and performance of your site to your exact needs.  Because they manage many Web sites, they can dedicate more time to learning the ins-and-outs of the business.

Get your guarantees in writing

Service Level Agreements and Service Level Guarantees (SLAs and SLGs) are becoming more and more common in the managed hosting arena.  Generally, your managed hosting provider will guarantee that their network and your Web site will be up and functioning a certain percent of the time.  If they fail to meet that percentage, they will refund some of your hosting fees.  Ask your provider about SLAs—it’s a great way to ensure they’re truly motivated to keep your site running.

Many managed hosting providers compliment these services with higher-level planning and architecture.  Creating a Web site with multiple servers is a very complex task, and few people have the experience necessary to create an architecture that will scale to millions of users.  If you can afford the services, you should take advantage of your provider’s experience with other customers.  While you are responsible just for your company’s Web site, they’ve been working with many different customers.

Finally, you may choose to outsource the development of your site.  Hiring skilled webmasters and developers is a challenging task—and in some parts of the country, it’s practically impossible.  Many firms will do the bulk of the work required to develop your Web site, but the service is costly.  If you can afford it, letting someone else handle the bits and bytes of your code is a great way to keep your company focused on the core competencies.

Reasons to keep administration under your corporate roof

Letting someone else do the work of managing your Web site is a great idea, but it’s not right for everyone.  If your Web site is your company’s bread-and-butter, you may not be comfortable trusting it to someone else.  After all, it’s not their business on the line.  The hosting provider may have a very skilled administrative staff, but are they really as dedicated to the site as your own team?

You’re a control freak.  When a hotfix comes out, not only do you want to install it at a specific time, but you want to be the one typing ‘update’.  One of the benefits of using a managed hosting provider is that they will take care of this type of monotonous task.  If you’re not comfortable letting someone else perform updates on your system, then you are better off managing the servers yourself.

Anyone managing an NT server knows some problems can only be fixed with a reboot.  If that problem causes your site to be offline, you want that reboot right now!  If you choose to outsource the management of your server, you will probably not be able to do this yourself.  Instead, you will have to pick up the phone and call your hosting provider.  The person who receives your call will give the problem to a systems administrator, who will perform the reboot as soon as they can.  This process takes at least ten or fifteen minutes longer than it would take you to do yourself. 

On the other hand, if you’re on the beach taking that much-deserved vacation, they will be able to resolve the problem much faster than you could.  Before you sign up for managed hosting services, make sure you’ll be satisfied following the provider’s processes for troubleshooting requests.

Make sure that hosting company does not obstruct developers

Different managed hosting service providers have different policies regarding the level of permission you will have on your own Web servers.  A few will give you free run of the server.  Most will give you restricted permissions to keep you from changing critical aspects of the system or interrupting their monitoring. 

If a provider limits your access to the server, make sure your developers will still be able to do their job.  It may be okay to call the provider to request a reboot, but it is probably not acceptable to call them every time you need to upload a new COM object.  Providers vary widely on this topic—but almost all will require some flexibility from your developers.  If your developers aren’t ready to have their access restricted you may not be able to outsource the systems management.

Summary: Options may change as you grow your site

Host on your own network or on your ISP’s?  Manage the servers yourself, or hire the services of a managed hosting services provider?  No solution is right for everyone; but hopefully these choices are clear now that you know what needs to be considered. If you’ve got a small Web site that doesn’t receive much traffic, start by keeping it on your own network.  As you grow and your site becomes more important, consider collocating your site on an ISP’s network.  If you don’t have the manpower to manage your site, managed hosting service providers will be happy to do it for you—for a price.