The Pros & Cons Of Hosting The Site Yourself

By Jason Shpik
Posted Tuesday, June 15, 2004

DO-IT-YOURSELF
You host the Web site yourself, relying purely on in-house resources except for the external connectivity.
PROS:
* No service costs to pay
* You have total control over the application
CONS:
* Can be difficult and expensive to maintain the required expertise
* You may not have an ideal physical environment
* Coping with future increase in demand may be painful.

YANILLA CO-LOCATION
Hosting company provides the physical space and associated environmental services, including building access security, for your Web server and the connectivity to the Internet. However, the server is yours and you manage everything else to do with it, including the hardware, operating system and application.
PROS:
* Far cheaper than full-blown dedicated hosting, while avoiding all the environmental and connectivity issues of in-house hosting
CONS:
* You stilt need the resources to manage the Web server itself including operating system and application.

CO-MANAGED
This is a half-way house, in which you still look after the application, but now the hosting company owns and administers the server and the operating system, as well as providing all the basic co-location facilities. This represents a split in responsibility between the IT platform and the application running on it.
PROS:
* It off-loads all responsibility for hardware and operating system, allowing you to focus on the application
* Cheaper than full dedicated hosting
CONS:
* Considerably more expensive than co-location
* You still have to look after the application, which is often the main source of reliability problems.

DEDICATED HOSTING
Here the hosting company looks after everything to do with the IT of your Web site, including the application and even processing-electronic payments.
PROS:
* It off-loads all responsibility for IT, allowing you to focus purely on products and customers
CONS:
* Very expensive
* You will stilt deal with customers and products
* You may stilt have to grapple with complex integration issues involving in-house systems.

FULL-BLOWN PROCESS OUTSOURCING
This is dedicated hosting with the additional component of managing processes such as CRM and product pricing, in effect outsourcing the whale e-commerce operation, concentrating on the products or services you provide but leaving the online distribution to the service provider.
PROS:
* It off-loads some of the integration issues (or all of them if you resort to total outsourcing of IT)
* Fastest route to new online markets
CONS
* Adds even more to the cost
* Extends dependence on hosting provider beyond IT provision into customer relationship management, which may be beyond its core competence.

Case study: Warner Brothers International Theatre (WBIT)
WBIT. like some other national cinema chains. recently established a Web site supporting online ticket sales. With rivals moving online, WBIT decided it needed to act quickly, setting itself a tight four-month deadline. The business plan for a Web presence coupled with online ticket sales was only completed in February 2000. However, the company wanted to go live in time for the launch in July of the year's biggest movie. Star Wars, Episode One -- The Phantom Menace.
According to James Scott, WBIT project director, this tight deadline narrowed the field of contenders significantly and meant that only a seasoned hosting provider could be considered. BT was chosen largely on the strength of its existing relationship with WBIT for telecoms services. The deadline was met, and the site quickly proved popular, with seven million hits in a month shortly after going live.
This is an example of dedicated hosting, in which the provider looks after all IT issues relating to provision and operation of the Web site. But it is not full-blown outsourcing, because WBIT looks after the actual ticketing systems within each local cinema.
The site is managed on BT's own server farm in Milton Keynes and this interacts with WBIT's network connecting the local cinemas. When a customer checks times of films and orders a ticket, the enquiry runs through the BT server farm to WBIT's central system in its London headquarters and is then routed to the requested local cinema. The ticket order is then processed in the local cinema's system and a message confirming -- or if fully booked denying -- the purchase is sent back via the same route.

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