Question of independence
The merits of telehotels run by single telecoms carriers, compared with those that are independent, are fiercely debated. Interxion, Redbus Interhouse, Telehouse and CityReach are examples of companies running independent telehotels, while BT, AT&T, Colt, KPNQwest, and Cable & Wireless are among the carriers that run their own.
Morgan Stanley argued that there are several advantages to customers locating in a neutral environment, including the ability to connect to a number of operators, the possibility to swap easily between a number of different suppliers, and network resilience through connectivity with more than one Internet backbone provider.
The service level agreements between the telehotels and their customers have received some criticism recently, and companies would be wise to pay attention to the details, say experts.
According to law firm Klegal, telehotel business is growing too fast for traditional property law to keep pace with it. In a recent review of telehouse contracts, Klegal found they were 'seriously deficient'.
Consequently, Klegal said customers should ensure that their contracts specify the precise responsibilities of the telehotels to keep the computers running in an appropriate environment, and contracts should also stipulate what should happen if things go wrong, including penalties.
As the price of bandwidth falls, value-added services will increasingly be used to differentiate the offerings of telehotels. Firms should shop around for the best deal, comparing the value-added services on offer as well as prices. Telecoms carriers are also stressing the value of their networks and their global alliances, and these too should be compared.
Increasingly firms are using telehotels as secure locations to run e-commerce. Analyst company Forrester Research's June 2000 Web Hosting Report concluded that companies were turning to host locations to fill gaps in their in-house provision. The report added that IT managers were pushing for more scalability, service, hardware and software as their relationships with telehotels developed.
Forrester's report confirmed the widespread view that value-added services will be as important as the basic co-location offering: 'As Internet strategies evolve, a quarter of firms will look for better customer support, a quarter say they'll need broader software and hardware capabilities. Twenty-one percent want support for e-commerce and transaction systems, while a similar number expects upgraded infrastructure to scale more for end users.'
