Web hosting firms can reduce costs and enhance the reliability of sites. But careful consideration of availability, security and performance levels is needed before taking the plunge.

According to a report by analyst firm Ovum entitled Web Hosting: Usage and Markets, firms can halve the cost of operating a Web site and increase availability by using a Web host.

But choosing the right host requires careful planning. The Ovum report defines a Web host a firm that 'offers server capacity or connectivity for the purpose of hosting a Web site. This may include value-added services such as administration, implementation, application manage-ment and integration' .

Hosting services are available from telecoms carriers, Internet service providers (ISPs) and hardware vendors as well as specialist Web hosting providers, each offering different levels of service. Ovum identifies three main kinds of hosting: shared, co-location and dedicated.

Shared hosting

A shared hosting service provides space on an off-site Web server that is shared with other users. This is mainly aimed at organisations that want a basic Web presence, and is usually inappropriate for e-commerce operations.

A co-location service offers a secure physical location for a company's own Web servers and equipment, connectivity and provision for firewalls, reporting, network services or Web design. The equipment remains the property of the client, who is responsible for the day-to-day management of the Web site. Some firms favour this setup because it allows them to retain some degree of control.

A dedicated hosting service is designed to take care of an organisation's complete Web function, including provision of all hardware and connectivity and a full range of managed services. In the UK, there are only a handful of Web hosting companies that can offer a dedicated hosting service. According to Ovum, most businesses that outsource their sites opt for either a dedicated or co-location service.

Key issues to consider when weighing up hosting options include availability, meaning the amount of downtime that can be expected; security; connectivity; and the availability of value-added services. Measurable factors such as the amount of guaranteed uptime should be contained in the service-level agreement (SLA).

Christina Kasica, senior consultant at analyst Ovum and author of the report, says firms should have a good idea of what level of service they require before approaching a Web host. She says companies must consider the kind of Web site they want. Does it need to be available round the clock? Will it cater for a global audience? Will it be a basic informational site or have e-commerce capabilities? Will it need to be fully integrated with back-end systems? Does it have to handle streaming media? 'But the key set of questions is: how mission critical is it? Is it going to affect your business if it goes down? What kind of security, availability and performance is required?'

For purely informational corporate Web sites, for example, security and guaranteed uptime may not be vital. But as Kasica points out, firms need to think about how their site will evolve. They should ensure they have the option to add functions such as multimedia or e-commerce, and that the service has the scalability to meet growing demands on the site. Some hosting companies offer to analyse such requirements for free.

Richard Wigley, vice president of product development at online services provider BT Ignite, says, 'You should deal with someone who can support your current and future requirements on their back-office platforms Ã,­ their operational support systems Ã,­ without having to outsource or partner with other entities outside their control.'

As well as having the necessary resources, it is important for the provider to display a good understanding of the user's vertical market. For example, a financial institution can have very different storage and backup requirements to a manufacturer. Knowledge of a user's market is even more important if the host is also being asked to design the Web site.

In initial discussions with a Web host, businesses should try to get precise information about the level of service being offered. Does it monitor performance, for example, and how will the business be compensated for downtime beyond that specified in the SLA? The Ovum report found that the main complaints from customers included slow response times, unacceptable amounts of downtime, insufficient technical expertise and problems caused by insufficient bandwidth.

Corporations with mission-critical sites can ill-afford downtime, says Mark Wheeler, director of Web host iXguardian. He believes hosts should guarantee 99.995 percent availability on power, cooling and connectivity by providing backups. IXguar-dian is building its own power generating station, using gas turbine generators to produce electricity. These are backed up by diesel generators, which in turn are supported by mains electricity.

The firm has also addressed the biggest source of downtime: connectivity problems. 'We have built an architecture that enables us to plug into global Tier 1 networks. We can connect to three major global IP networks. If one should fail, we route content over the next best,' he says.

Realistic compensation

This level of connectivity may not be crucial, and Web hosts are more likely to offer 99.5 percent Ã,­ about three or four hours a month downtime. Even so, it is useful to compare the cost of downtime with the compensation offered in the SLA: it is not worth being compensated Ã,£10,000 for a day's downtime if it means Ã,£1m in lost business.

Web host and managed IT services company Nextra is attempting to offer users greater financial security with the introduction of an insurance policy named Insure. Underwritten by Lloyd's, the policy offers up to Ã,£1bn cover against loss of business in the case of system failure. 'Compensation purely for downtime isn't good enough,' says Barry Hartop, Nextra UK managing director. 'Companies are still not able to offer good service to customers because they can't get the absolute reliability that they require.'

Businesses should investigate both the physical and online security offered by a Web host. Ideally, a datacentre should be housed in a bomb-proof building that is locked and guarded. Software should be in place to deter hackers, detect breaches, monitor traffic and protect content.

Another important area is support, says Kasica. It is advisable to find out whether the host offers round-the-clock support and what the minimum guaranteed response time is. Talking to existing customers about the host's service is particularly valuable in this respect.

Pricing is another area to consider, but it is hard to make comparisons because most major hosting firms offer a number of packages Ã,­ what Kasica calls a 'Chinese menu' of offerings Ã,­ enabling customers to choose the level of service required.

Nextra, for example, recently took over service provider Cix, and now has a suite of Web hosting services called Ensure that includes dedicated, co-location and managed NT or Unix hosting. Global One's managed hosting services include what it calls Silver, Gold or Platinum options. Similarly, BT Ignite offers a range of co-location, shared, dedicated and customised hosting services. All these companies offer 99.5 percent availability, strong physical and logical security, and round-the-clock support.

Most companies make a fixed annual charge. IXguardian's charge is based on the number of gigabytes of disk space used, bandwidth usage and the amount of space occupied in the facility. But, adds Wheeler, the bulk of the charge is for the managed services involved. BT Ignite is unusual in moving towards a transaction-based model, which it believes exactly matches revenue with cost.

The Web hosting market is currently very volatile, with smaller firms being bought out by larger, more established ones. Cable & Wireless, for example, has recently bought Digital Island, while WorldCom has acquired Digex. Kasica believes that global operators tend to be safer bets: global concerns have a clear advantage simply by virtue of owning a global network, making them less reliant on partnerships with other service providers Ã,­ and they are also more likely to be around in five years' time.

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