Many companies begin their online venture with the decision of whether to purchase and host their own server, or use managed server hosting. Basically, managed server hosting means that a hosting company manages your server(s) for you. In other words, you are renting a server from the hosting company. What are the costs of managed server hosting? Are the risks low enough and the benefits high enough to make the price right?

There are several potential benefits to using managed server hosting:

Scalability - Bandwidth needs fluctuate according to advertising and consumer patterns, as well as unforeseen, sometimes bizarre, events. With managed server hosting, you can upgrade or downgrade your bandwidth as needed simply by letting your hosting provider know your needs. This allows you to use the host's staff and resources, rather than hiring extra staff as would be required if you handled your own hosting.

Equipment - With managed hosting, you are simply renting the host's equipment. As new technology becomes available, your host upgrades and you continue renting. If you are handling your own server, you have to purchase the equipment yourself. A server and communications gear, including special routers if needed, costs between $5,000 and $15,000.

Support - Your managed hosting provider will take care of all support functions for your server. This includes monitoring servers, repairing hardware failures or network problems, and backup power supplies for the servers. Hosts also provide bandwidth and connectivity to the internet, as well as server backup should your server fail. Many hosting companies also offer the option of periodic data backup as an added precaution against data loss or corruption.

Security - Your host will take care of installing necessary firewalls and server monitoring equipment to help protect against viruses, denial of service attacks, and unauthorized access.

In addition to the list of benefits mentioned, one of the major benefits of using managed server hosting is time. Every service offered by the host is a service that would have to be covered by your staff if you were to manage your own server. In small- to medium-sized businesses, where staff and resources are often limited, the time spent managing the server could lead to a loss of time actually running the business and its day-to-day operations.

The alternative to losing time and production would be to hire additional staff specifically for the server management, which could well cost more than the revenue from the website. Other costs associated with maintaining your own server are acquiring communications, typically in the form of T1 lines, firewalls and security tools, and a physical location for the server. In all, the expenses for buying and maintaining your own server for the first year typically range from $58,000 to $107,000, with annual expenses of $50,000 to $100,000 after that. Again, small- and medium-sized businesses would be the ones to find this the most difficult to cover.

As with anything, there are a couple of risks to using managed server hosting:

Sensitive data - Hosts guarantee the safety of the data on your site, but they cannot guarantee that they will never have an employee violate your trust and access sensitive material. They also cannot guarantee that nothing will ever happen to that material. If you are going to have a large quantity of sensitive information stored on the server, managed hosting may not be the best choice for you. While maintaining your own server will not guarantee the safety of your information, it does give you the peace of mind of having it under your control.

Fraud - There have been cases of hosting providers loading customer's bills with hidden charges. This is not a common practice, but it has happened. Anyone who is considering managed server hosting should take the time to research the provider before signing a contract.

Once you have weighed the risks and benefits of using managed server hosting, it is time to consider the costs of the service.

Monthly fees for hosting vary by provider. Most offer hosting packages, providing a specific size server, specified bandwidth, and various options. The size of your business and the reason for your site will make a difference in the specific services you choose. If you are interested in additional options, such as security certificates for providing secure ordering pages or data backup performed by the host, you will incur additional fees. The typical cost for a hosting service is generally $1,500 to $5,000 per year, which is considerably less than the cost of having your own server.

Obviously, the cost for using managed server hosting is a fraction of the cost of purchasing and managing your own server. For small- and medium-sized businesses, managed server hosting is the easiest, least expensive way to have a website. Even large businesses who do not want the added responsibility of servers and technical staff can benefit from managed hosting.

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