Special Reports

One Hosting Provider's Message

How's this for a best practice? One Web hosting company sees a sensible answer in outsourcing.

Venali Inc., an Internet messaging service provider, specializing in Web-based facsimile services, recently sent a message of its own.

The subject line? Outsource.

Earlier this month Miami-based Venali became yet another example of an IT service company that chose another IT service company to handle back office processing and basic IT infrastructure needs.

"Just because we're an IT services company doesn't mean we can't outsource," said Venali chief executive officer John Poncy. "Our IT team and developers who work closely with customers took time to understand the IT hosting model."

Venali's position is unique in that it has three customer categories: end user enterprise IT functions at client companies; channel partners through which it offers its capabilities as a sell-through; and small business owners and entrepreneurs who can use a small pricing model for as little as $10 for a messaging package.

It's because of this multi-layered need that Venali last year started to look for outside help in the form of hosting services as many businesses increasingly are these days, complex or not.

"IT leaders should be saying today, 'what are my needs? Budgets have been slashed, more reliability, more processing power, more efficiency...,' but they have less to spend," said Todd Mitchell, general manager for dedicated hosting and global services for The Planet, a hosting service provider based in Houston, Texas. "If you have rock-star months where you might need a hundred servers and cyclical slow times where you just need one, scalability is important."

Decisions, Decisions
Indeed, not every company is like Venali with three different client sets to work with. So each enterprise or small business need is different but the philosophy of being able to spend more time focusing on business and less on IT operations is the same, according to Mitchell who said his hosting company The Planet has more than 50,000 proprietary servers providing hosting to about 20,000 customers.

Sticking with the concept of things coming in threes, in choosing a hosing provider there are really, well, three fundamental levels of service to consider:

Self-managed: In this scenario a hosting provider simply sets up servers and allows the customer to call-in for break-fix support or system reboot duties such as reinstalling an operating system or responding to help desk queries.

Advanced Services: If an enterprise client or channel partner selling through to an enterprise client wants more than the basics, under this scenario they can pick and choose services piecemeal, such as and Web and server hosting, security monitoring, back-up and disaster recovery and off-site IT operational services up to and including off-site transaction and posting services.

Managed Hosting: This choice is the most comprehensive of the three where the vendor, or its hosting provider competitors assume full responsibility for the hosting environment. Such duties might include ensuring that a Windows or Linux operating system is patched regularly or having a full-time database administrator, networking engineer and security engineer on staff provided by the hosting service provider. In effect, under this plan, the entire IT function is outsourced.

What makes considering hosting services such a malleable proposition is the ability to choose a solution that works for an individual enterprise, contends The Planet's Mitchell.

"But you always have your infrastructure underneath, if you want to concentrate on just your business you can move all the way up the service stack," Mitchell added.

For John Poncy, the chief executive at Venali's part, he considered moving all the way up the stack will full IT infrastructure services with a hosted pro because he said the decision to look at a hosting provider made sense.

"The first question I always ask customers is 'how are you going to use our service?' because that tells me exactly the product that will satisfy their requirements," Poncy said.

"Our customers want rapid ROI, not a promise of savings in two years. They typically have a target on their heads to reduce costs, so the application they choose has to work well every time. I know we've been successful when they ask me what other services we provide."

By outsourcing Venali's IT infrastructure, Poncy said his company is able to work on strategic initiatives and grow business.

Like any decision though, there are always pros and cons. What works for Venali, a company, which must comply with public company IT controls standards, may not work for another company.

But Mitchell has what he calls sage advice: "Before you do anything, go visit the data center of the hosting provider, look around it tells you all you need to know."

About the Author

Jabulani Leffall is an award-winning journalist whose work has appeared in the Financial Times of London, Investor's Business Daily, The Economist and CFO Magazine, among others.