enterprise web hosting buyers guide

7/31/2019 Enterprise Web Hosting Buyers Guide

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Buyers Guide:Enterprise Web Hosting

Copyright 2008, Tippit, Inc., All Rights Reserved

Enterprises have more choices, rom traditional colocation hoststhat oer military levels o physical security to cloud-computing

vendors that provide bleeding-edge technology.


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www.WebHostingUnleashed.com 4

Buyers Guide: Enterprise Web Hosting

Conversely, cloud computing is a new and unproven technology, driven

in large part by Web 2.0 and social computing. In its report, Is Cloud

Computing Ready For the Enterprise? Forrester calls cloud computing a

disruptive innovation. And although cloud computing doesnt quite sig-nal the end o inrastructure as some proponents claim, it gives the large

enterprise a cheap, easy and ast way o provisioning new servers and

hosting new Web applications with minimal investment. Perhaps spurred

by the success o cloud-computing pioneer Amazon.com Inc.s Amazon

EC2 (Elastic Compute Cloud), more and more national providers are intro-

ducing cloud-computing services, many o which are currently in public

beta mode.

Whether your company is outgrowing its own datacenter, needs a higher

level o security than the building can provide or requires greater band-

width and reliability than its IT resources oer, colocation services makesense or all but a scant ew large enterprises. A colocation provider allows

you to house your Web server in a building that oten has military-grade

levels o physical security and a T1 network that can reach around the

world. Colocation services are completely redundant, rom their buildings

air-conditioning systems down to their zero-latency networks. And the

level o bandwidth oered by a T1 provider, such as AT&T, Qwest Com-

munications International Inc., Global Crossing and Savvis Inc., makes your

Web applications run blazingly ast and nd the most ecient routes to

your online customers.

For even large enterprises with extensive datacenters, installing your own

Web servers at a colocation acility can be extremely cost eective, par-

ticularly i you can nd a provider close to your organizations building.

You only purchase the servers, and you dont have the nancial burden

and responsibility that comes with running a datacenter most notably,

the costs behind powering and cooling server racks. A colocation service

makes sense, too, when your organization wants to retain complete con-

trol over your hardware and sotware, and you need a rock-solid disaster-

recovery solution.

The colocation market is growing very rapidly in 2008, revenue is

growing 20 percent and a signicant amount o that growth is because

o enterprises, said Daniel Golding, vice president and research directoro Tier1Research.com in Washington, D.C. The capital costs o building a

high-quality datacenter can be up to $2,000 per square oot that could

be over $60 million. Its very dicult or an enterprise to replicate what

datacenters can give them aordably.

Cloud computing is the newest orm o IT outsourcing, and its quickly get-

ting attention rom large companies as a cost-eective way to host their

Cloud comput-

ing is the newest

orm o IT out-

sourcing, and its

quickly gettingattention rom

large companies

as a cost-eec-

tive way to host

their Web 2.0

applications.


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Web 2.0 applications. An evolution o utility computing (which delivers IT

resources in the same way utilities, such as electricity, are delivered), cloud

computing can be compared to SaaS (Sotware as a Service) applications,

which are also gaining ground in enterprise-application markets such asCRM. Like SaaS applications, cloud computing allows a company to use

computing resources as theyre needed, dynamically provisioning servers

on the providers network as requirements grow and paying or bandwidth

and data storage as theyre consumed. Unlike utility computing, cloud

computing includes tools or managing the computer resources collected

in the cloud. I servers in a colocation datacenter are a capital expense,

then tapping the servers in a cloud is an operating expense.

IBM Corp., which announced its Blue Cloud oering or building clouds,

denes cloud computing as a pool o virtualized computer resources that

can host a variety o workloads, including batch-style back-end jobs andinteractive, user-acing applications, and can support redundant, highly

scalable programming models that allow workloads to recover rom un-

avoidable hardware/sotware ailures.

Forrester dened this new Web-hosting oering as a pool o abstracted,

highly scalable, and managed compute inrastructure capable o hosting

end customer applications and billed by consumption. And because cloud

computing is enterprise technology packaged to t the needs o small

businesses and startups, Forrester said it has the potential to completely

upend IT as we know it.

Enlisting a cloud-computing provider makes particular sense or com-

panies that dont want to build out or build a new datacenter and need

access to highly scalable servers to run their Web applications. Cloud com-

puting means never needing a datacenter o your own but to sign on to

cloud computing means relinquishing control over your inrastructure and

trusting in the providers security measures.

In addition to giving your company the advantages o highly sophisti-

cated datacenters and advanced networking technology, colocation and

cloud-computing services oer another benet: greener IT. The amount o

energy consumed by datacenters in the U.S. alone is staggering. According

to an August 2007 report prepared or Congress by the U.S. Environmen-tal Protection Agency, the datacenter sector consumed about 61 billion

kilowatt-hours o energy in 2006; that equals 1.5 percent o the nations

total electricity consumption and about $4.5 billion in related costs.

Armed with this inormation, some colocation providers, such as 365 Main

and Green House Data in Cheyenne, Wyo., are nding ways to build and

operate their datacenters more eciently. According to Gartner, new


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acilities are increasingly taking ecological impact into account, exploiting

locations with naturally chilled water or cooling and green power sources,

such as solar or wind power. For example, Dell powers its datacenters in

Austin, Texas, by a combination o wind power and trash-to-electricityacilities.

Companies are becoming more eager to support these green IT eorts by

awarding them their business. For instance, in April, 365 Mains Chandler,

Ariz., datacenter announced that Sony Pictures Digital Inc. was the rst

customer to sign up or a new service that uses 100 percent renewable

energy, which is provided via the Salt River Projects Earthwise Energy

Program.

Even i you dont have access to a greener datacenter, your organization

can conserve energy at any colocation acility by installing newer, moreecient servers, such as Sun Microsystems CoolThreads servers or Dells

PowerEdge Energy Smart servers.

In addition, organizations that are concerned about their carbon oot-

prints are nding an eco-riendly and cost-eective Web-hosting solution

in cloud computing. Cloud computing not only allows new companies to

orego building power-hungry datacenters altogether, it also gives orga-

nizations the ability to react instantly to changes in demand, helping use

energy more eciently. And because cloud-computing providers dont

need to build their inrastructure in urban areas popular with their custom-

ers, they can take advantage o locales that tend to have lower demands

or power.

Colocation and cloud-computing services arent necessarily mutually exclu-

sive. Some companies may choose one type o hosting over the other, but

a ew o the largest enterprises may have room in their Web-hosting strat-

egy or both types; in act, theres a good chance skunk works operations

within your enterprise are already experimenting with cloud computing.

In this buyers guide, youll nd details on what to look or when consider-

ing a colocation and a cloud-computing provider; the benets the two

types o Web-hosting services oer your enterprise; and what you need to

know to determine whether colocation, cloud computing or both servicesare a good t or your organization.


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Colocation Service Overview

Put simply, when you sign on with a colocation provider, you rent space

a rack, a cage or a custom space in the providers Internet datacenter

or your Web servers. The service usually includes power, an Ethernet con-

nection and a block o IP addresses. Typically, your IT sta purchases and

delivers the hardware to the colocation acility; installs and congures it;

and then maintains it, rom replacing down disk drives to installing sot-

ware updates.

Unlike other Web-hosting services, colocation allows you to retain com-

plete control over every aspect o your Web servers and sotware; since

your IT sta is responsible or maintaining the boxes, even in the event o

server ailure, its important to choose a provider thats within a reasonable

distance rom your organizations oce. According to Gartner, most com-

panies preer to be within 50 to 100 miles o their colocation vendor.

But colocation is more than a home away rom home or your Web serv-

ers. Most colocation acilities are built near key connecting points to the

Internet, which ensure the best possible Internet connections. Putting your

Web servers in these acilities lets you access ar more bandwidth than you

could rom your own datacenter, which allows you to oer more sophis-

ticated Web services to your customer. According to Gartner, colocating

your Web servers in one o these Internet hubs also lets you maximize your

sites perormance while minimizing the cost o Internet connectivity.

Take, or an example, Terremark Worldwide Inc.s fagship acility. Terremark

is a global IT-inrastructure services provider with headquarters in Miami.

The company said, NAP [Network Access Point] o the Americas is the ag-

gregation point o 18 separate domestic ber backbones, multiple under-

sea cables and over 75 acilities-based carriers, giving customers access to

virtually any location in the world. Access to multiple Tier 1 routing tables

is provided through meshing IP peering cores, with a 99.999 percent SLA

[Service Level Agreement]. By connecting to multiple Tier 1 core back-

bones, customers reduce latency, IP hops, packet loss, jitter as well as the

ability to multihome trac on an unprecedented level.

Gartner sees more and more enterprises enlisting colocation services, and

has identied our reasons behind this trend. One, because organizations

are geographically distributed, they dont necessarily have a headquarters

in which to locate a datacenter and Web systems. Two, traditional oce

buildings dont always meet the cooling, power and weight requirements

to house dense and heavy hardware, and retrotting them is too expen-

According to

Gartner, most

companies preer

to be within 50

to 100 miles o

their colocation

vendor.


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sive. These buildings, too, rarely allow or the lock-down security measures

companies want or their server rooms. Three, colocation gives companies

that are consolidating or outgrowing their internal datacenters a cost-

eective alternative to building new acilities. And our, remote lights outmanagement technology makes administering remote systems easier,

allowing IT to even reboot servers remotely.


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The Benefts o Colocation

First and oremost, colocating your Web servers means you dont neces-

sarily have to build and operate your own datacenter. That translates into

signicant cost savings. Your organization covers the price o the hardware,

but you dont have to pay or the same amount o power, cooling and net-

work inrastructure not to mention IT personnel that you would in an

internal datacenter. Also, instead o incurring the massive up-ront capital

expenses o building a datacenter, you can pay or colocation services

monthly as operational expenses.

In act, Forrester called a colocation acility a companys best investment.

The Colocation Service Provider Directory, a volunteer-run service in Cedar

Park, Texas, estimates that the expense o a colocation acility is 1/20th the

cost o providing an equivalent environment in-house. Combined, a highly

secure, appropriately cooled datacenter with an advanced IT sta could

cost as much as $20,000, according to the Colocation Service Provider

Directory; an organization may pay just $1,000 a month or less or compa-

rable colocation services.

Also, i your company is established outside o a pricey urban area or has

even one location in a smaller market, you may be able to take advantage

o an Internet datacenter with lower labor costs and less expensive power.

In 2006, electricity in New York cost about 15 cents per kilowatt-hour, in

Caliornia about 13 cents per kilowatt-hour and in Arizona just 8 cents perkilowatt-hour. Considering that your Web services must run around the

clock, choosing a datacenter with access to cheap power can mean a less

expensive colocation service.

Colocation oers many benets beyond cost savings, rom the building

that hosts your equipment to the network you use to connect your Web

sites. Forrester suggested that the right site can reduce the number o

threats to your uptime and control the costs o real estate, power and

labor.

Any viable colocation acility is housed in a ortress-like structure that isprobably ar more secure and server-riendly than your organizations o-

ce building. These acilities are designed to support loads o server arms;

provide state-o-the-art cooling and power systems; and employ around-

the-clock physical security that would satisy even the most paranoid

nancial institution. Because theyre built to keep e-commerce fowing

no matter what happens outside, these buildings tend to be seismically

sound, have environmental controls that are always monitored and include

re-suppression systems.


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A colocation acility can be an invaluable part o your disaster-recovery

strategy. With redundant air conditioning, power and networks, a coloca-

tion service can mean the dierence between business continuity andmillions o dollars o lost revenue. According to Golding o Tier1Research,

disaster recovery is one o the primary reasons an enterprise would move

to colocation.

A datacenter attached to your building isnt any kind o a disaster-recov-

ery plan. Backup acilities and colocation is a much better strategy. Along

the way, a lot o people give up their own datacenters entirely, he said.

Not only are colocation providers buildings better than those o most

organizations, but they can build networks that are more reliable and have

less latency. These datacenters are directly connected to the providers T1networks.

With colocation, you get a better-designed datacenter thats operated by

people who really know what theyre doing, said Golding, who explained

that even i an enterprise can aord to build its own datacenter, it can be

very dicult to bring the right mechanical engineering expertise in house.

You could get a bad datacenter.

A colocation network is built to provide reliable uptime typically, it

has redundant routers, redundant Internet backbones and extra capacity.

The providers oer 99.999 percent SLAs (Service Level Agreements) or

network availability and latency; some, including national provider PEER

1 and Dallas-based The Planet.com Internet Services Inc. give customers a

100 percent uptime SLA. Based on their colocation providers SLAs, some

organizations can, in turn, oer SLAs to their customers.

Also, a colocation networks bandwidth speeds ar outpace most com-

panies bandwidth capacities. Instead o the T1, T2 or T3 lines or even the

increasingly popular OC3 line, a top-notch colocation acilitys network is

built with multiple OC192 lines. To compare, a T3 line is 45 Mbps, an OC3

line is 155 Mbps and an OC192 line is 10,000 Mpbs and is currently the

astest available connection to the Internet. This level o bandwidth means

your Web sites run more reliably and aster when hosted at a colocationacility than they probably would on a server in-house.

Just as importantly, most acilities are home to an NOC (Network Opera-

tions Center) staed with experts who monitor everything happening on

their networks and in their datacenters 24 hours a day. Many colocation

providers also oer advanced support manned by their NOC engineers.


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Colocation Market Overview

There is no shortage o colocation providers, particularly in metropolitan

areas such as San Francisco, San Jose, Cali., Los Angeles, New York City,

Washington, D.C. and Atlanta, but space in their acilities can be tight

because o increasing demand. Many colocation providers are expanding

existing acilities and building new ones to meet demand across the U.S.

Few providers, however, oer only hands-o colocation services; many

provide managed services, including managed colocation services.

I your company has a strong Internet presence, youre likely to preer

colocating your Web servers in a key Internet hub such as Silicon Val-

ley or Washington, as well as within 100 miles o your oce and a ma-

jor airport. Naturally, colocation space is at a premium in these highly

impacted markets.

In general, you can choose between a large national provider, which oers

services at datacenters in locations nationwide and sometimes globally,

and smaller regional providers, which have just one or a ew locations in

the same region. This list includes some o the biggest national providers

as well as a smattering o the many regional providers across the county:

National providers include:

365 Main: Has three locations in the San Francisco Bay Area, one in

Arizona and one in Virginia

Cogent Communications Inc.: Has 34 datacenters across North

America and Europe

EQUINIX INC.: Has 18 datacenters around the world, with U.S.

locations in Silicon Valley, New York, Chicago and Dallas, and

international sites in Hong Kong, Tokyo, London and Munich,

Germany

NaviSite Inc.: Has 15 colocation datacenters in the United States,

including in Chicago, Houston, Las Vegas and San Jose, as well as

two in EnglandPEER 1: Has ve locations in the United States, including Los

Angeles, New York City and San Jose and three in Canada

Qwest Communications International Inc.: Operates datacenters in

most major cities across the U.S.

SAVVIS Inc.: Has acilities in Caliornia, New York, New Jersey,

Miami, Chicago, Dallas and Boston


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Terremark Worldwide Inc.: Has acilities in Miami, Silicon Valley and

the Washington, D.C. area as well as in Madrid and Sao Paulo, Brazil

XO Communications: Has 33 acilities in major cities across the United States.

Regional providers include:

AIS (American Internet Services) in San Diego

Earthnet Inc. in Boulder, Colo.

Green House Data in Cheyenne, Wyo.

ServePath in San Francisco

RagingWire Enterprise Solutions Inc. in Sacramento, Cali.

RebelNetworks in Toronto

The Planet in Dallas


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Key Services and Features o Colocation

No matter the geographic location or the provider operating them, most

colocation acilities oer the same eatures. These include military-grade

levels o physical security around and inside the building; a variety o

environmental controls, many o which are redundant; and dierent

congurations or the space you rent or your servers. Most providers also

oer additional managed servers or an additional cost to help you

maintain your Web boxes.

Physical SecurityColocation providers make it impossible or anyone to wander in o the

street. Physical security measures oten include security guards patrolling

the building, biometric readers controlling access to server rooms, digi-tally recorded surveillance systems and locked cages or customers boxes.

Server rooms may be equipped with alarms and motion detectors. Savvis,

or example, houses its datacenter acilities in unmarked buildings with

bulletproo glass and alse entrances, vehicle blockades and man traps

that allow only one person to be authenticated at a time. NaviSite, PEER 1

and Qwest are among the providers that control access to their colocation

datacenters with palm scanners and secure card-key readers.

Also important is the way the buildings are designed to withstand natu-

ral disasters as well as their internal environmental controls. For instance,

Terremarks acility in Miami was built to withstand the worst that naturecan throw at it, including a category 5 hurricane: the equipment foors are

32 eet about sea level, the roo has 12 million pounds o ballast and the

windowless exterior panels are 7-inch-thick steel-reinorced concrete.

On the other side o the country, buildings in Caliornia are seismically en-

gineered to remain standing in an earthquake, and vendors anchor racks,

cabinets and equipment to cement slabs to ensure their protection. Savvis

includes seismic isolation equipment that cushions their acilities against

movement in its seismic engineering. Interior environmental controls

usually include re detection and suppression systems with sniers that

sense smoke, heat-detection systems and dry-pipe sprinkler systems thatstrictly limit the amount o water sprayed onto the datacenter.

Redundant Power and Cooling SystemsMany colocation providers, including Terremark, oer 100 percent SLAs or

their power and environmental systems because they build them to be re-

dundant, ensuring that even in the event o a total power grid ailure your

Web servers will continue running at the appropriate temperatures. Each


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acility has UPS (uninterruptible power source) systems as well as diesel

generators that will keep the juice fowing or several hours. NaviSite, or

instance, has a ull-site generator in its San Jose, Cali. acility that will keep

the boxes humming or at least 44 hours; its Houston datacenter has botha ull-site generator that will keep the lights on or at least 72 hours, as

well as six 10,000-gallon underground uel tanks to keep the gas-powered

generators running.

The redundant cooling systems are designed to maintain airfow, specic

temperatures and levels o humidity in each server room. NaviSite keeps

its datacenters at about 72 degrees and 45 percent humidity, plus or minus

ve percent. The machinery involved in these cooling systems is massive.

The equipment at Equinixs colocation acility in Chicago includes 750-ton

centriugal chillers, N+2 redundant chilled water pumps and condenser

water pumps, cooling towers and air-handling units.

Blazing NetworksAn enterprise moves its servers to a colocation acility not just or the

ortress surrounding the datacenter, but or the ast, reliable, low-latency

IP networks to which you can connect your Web sites. These are coloca-

tional carriers o Internet trac. Cogent, or instance, said that more than

10 Petabytes o trac crosses its networks every day, and Savvis claimed

that its T1 network provides more than 25 percent o the worlds Internet

routes.

Like Savvis, Qwest operates a T1 network, though most other colocation

providers operate T2 networks. There are ewer than 10 T1 networks

also called backbones, or the vast amount o trac they handle in the

world. They can connect to every other network on the Internet via peer-

ing and do not have to pay or IP transit. T2 networks connect upstream to

T1 networks, do some peering with other networks and pay or IP transit.

Marketing eorts aside, T2 providers do not necessarily operate inerior

networks.

PEER 1, headquartered in Vancouver, British Colombia, is an excellent

example o a T2 network. According to its web site, PEER 1 built its network

on a series o dedicated links between all acilities using multiple high-

speed connections. The company has peering relationships with over 500networks, and uses our T1 upstream providers to ensure reliability.

These high-perormance networks help customers reduce IP hops, packet

loss and jitter in their Web trac. Providers state-o-the-art networks

might include optical technologies, such as Cogents all-optical IP back-

bone, and smart networking congurations to maximize customers

network perormance. And theyre blazingly ast, oten operating at OC192


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speeds. Customers can usually choose among dierent bandwidth op-

tions to get the speeds they need to support their Web applications. For

instance, Qwests public connectivity options include 10 Mbps and 100

Mbps, and Cogents colocation connectivity options are 10 Mbps, 100Mpbs and 1,000 Mpbs.

Two other common eatures specic to the colocation providers network

are important to consider: i the provider is carrier neutral and i it oers

and charges or cross-connects. I you choose a carrier-neutral provider,

you can use any carriers network services, allowing or greater fexibility

when it comes to connectivity options. On the other hand, some coloca-

tion providers are carrier-specic and will lock you into those services.

Carrier-neutral providers generally oer cross-connects, which allow you

to connect to other networks with which your provider peers. For example,San Franciscos ColoServe peers with more than 45 networks and charges

a $99 cross-connect ee. (Cross-connects can also reer to connecting an

organizations servers in two separate cabinets).

Real-Estate ConfgurationsEvery colocation provider oers a wide variety o space or rent its one

o the ew choices customers have. This is the primary basis or determin-

ing the customers contract. It can also demand a high degree o fexibility

on the customers part, especially in congested markets where demand

is high and availability is low. According to Gartner, colocation space in

Chicago, Atlanta, Los Angeles, New York City, the San Francisco Bay Area

and Washington, D.C. is lling rapidly. Gartner also claimed that its get-

ting more dicult to rent more than 10,000 square eet unless youre lucky

enough to be an initial anchor tenant in a new acility.

In general, you can get as little as 1U o space on a shared rack to a cus-

tomized cage stocked with locked cabinets. PEER 1, or instance, lets you

choose rom 1/8 o a cabinet, 1/4 o a cabinet, 1/2 o a cabinet, a ull cabi-

net or a customized cabinet. XO oers rack shelves, a hal cabinet, ull cabi-

nets and cages. And with todays high-density servers and blade servers,

you can t a lot o compute power in one cabinet; or example, Terremarks

cabinets are 7 eet tall, 23 inches wide and 27.5 inches deep. The providers

cages are also customizable according to the customers needs.

I you expect your space requirements to quickly grow, you might con-

sider renting more space now than you currently need. It can be easier

and less risky to add servers to an existing cabinet setup than mov-

ing equipment to a larger space. And, i youre in a tight market, that extra

space might not be available in the coming months or years.

I you expect your

space require-

ments to quickly

grow, you might

consider rentingmore space

now than you

currently need.


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Its important to nd out how long it will take to complete your server

installation. Can you install your servers immediately? Or will it take several

days or even weeks to get your inrastructure up and running? Cogent

called its installation time rapid, with most installations averaging eightdays (guaranteed installed within 17 days).

Technical SupportBecause your IT sta is responsible or maintaining your servers, most

colocation providers include minimal tech support with their contracts.

Their acilities usually are monitored by an NOC, which is staed around

the clock with network engineers. Some o them will help you resolve net-

work issues, make conguration changes and even help with inrastructure

restarts.

Also, or an additional ee, you can almost always get assistance via a servicecalled remote hands or helping hands, which is intended to stand in or

your IT sta until they can arrive on the scene. These technicians will reboot

your boxes and perorm simple troubleshooting tasks, such as observing

and delivering reports about the indicators on your servers. You can oten

pay or remote-hands service either on-demand or with a subscription. Co-

gent, Equinix, Terremark, XO and Qwest are among the providers that oer a

version o this technical support service. Unlike most vendors, 365 Main and

The Planet include remote hands in their services. The Planet and Equinix

also give customers access to a portal or submitting support tickets; the

Planets portal lets customers track their bandwidth usage.

Additional ServicesAccording to Gartner, ewer providers oer bare-bones colocation services.

For many, the real money is in the managed services they can provide,

particularly to customers that have chosen to colocate ar rom their head-

quarters.

Terremark, or instance, oers installation services, which includes unpack-

ing and mounting your boxes, labeling cables, taking equipment inventory

and assembling your rack; staging services, such as assembling, congur-

ing and labeling your equipment; and engineering services, which include

migration planning, risk and contingency planning, needs assessment and

network design.

Similarly, 365 Main oers a bevy o add-on services, including network and

server monitoring, network design, circuit testing, system conguration

and installation, system diagnostics, power and data cabling and more. The

company also provides datacenter relocation and consolidation services,

which span the process rom dening a strategy to installing and testing

equipment to deployment.


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PEER 1 also has a range o optional services or colocation customers.

The providers Super DNS hosting service promises aster perormance

and tighter security when you let PEER 1 host your domain name. Its Port

Monitor tools let you dene thresholds or bandwidth usage, DDoS Shield

mitigates the impact o an incoming DDoS (distributed denial o service)

attack and Global Load Balancing oers more control over your Internet

trac by letting you restrict an IP address to just one location among

clusters.


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Colocation Costs

Its a basic act o business: As demand increases, prices rise. This holds

true with colocation services. According to Gartner, customers that are

renewing colocation contracts this year should expect to see at least a 20

percent price increase, and pricing may be as much as triple that o three

years ago. In act, the research rm has ound that customers in some

impacted cities have had their contracts renewed at as high an increase as

100 percent.

Gartner noted that the typical selling price has increased to $40 and $65

per square oot, and that doesnt include the cost o power. The research

rm also said that prices in the most congested markets, such as San Fran-

cisco, New York City and Washington D.C., could cost as much as $120 persquare oot by the end o 2008. Gartner believes prices will stabilize near

that level because escalation beyond that point would mean that con-

struction or leasing will become more cost eective or many enterprises,

thus reducing demand or colocation space.

The rising cost o energy is also helping drive up colocation ees. Power,

said Gartner, is the limiting actor smaller datacenters arent equipped

to handle new high-density boxes thus colocation providers price their

contracts accordingly.

Nevertheless, colocation is still less expensive or most enterprises thanbuilding their own datacenters. Providers oer contracts with dierent

terms, and customers pay by the month. Many providers oer discounts

i you sign a year-long or longer contract; signing a contract that spans

two years or more can also help protect your organization rom the ever-

increasing costs o colocation services. The monthly ee is oten deter-

mined by the amount o space you rent plus the bandwidth to which you

subscribe. Power costs gure into the nal ee as well. Some vendors also

charge a set-up ee, but you may be able to negotiate around that.

Few providers want to disclose their pricing without talking to customers

rst about their requirements. However, PEER 1s acility in Los Angelesadvertises dierent plans or a yearly contract: $2,200 a month or a hal

cabinet with 50 Mbps connectivity or $3,000 a month or a ull cabinet and

100 Mbps connectivity.

As another example, Colorado regional provider Earthnet charges by the

cabinet space, and also gives customers three bandwidth options. For in-

stance, an annual 1/2 cabinet contract costs $449 per month and includes:

21 U o rackspace, 10 amps o power, 150 GB o outgoing data transer and


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eight IP addresses. An annual ull cabinet contract costs $849 per month;

this buys you 42 U o rackspace, 20 amps, 175 GB o transer and eight IP

addresses. I you require more bandwidth than these plans oer, you can

pay $150 a month or 500 Kbps, $275 a month or 1 to 3 Mbps, or $225 ormore than 4 Mbps. Earthnet also charges a monthly $50 ee or each cross-

connect between its network and outside providers networks.

Power also gures into your total colocation costs, and most providers

charge a fat monthly rate. Pay close attention to this rate more and

more organizations are installing denser servers with higher power re-

quirements. Some vendors, such as 365 Main, have been able to negotiate

discounted power rates with local energy providers, a perk ew companies

can wrangle on their own. Unlike most other providers, 365 Main charges

or the power the customer consumes, determined via a real-time billing

system that records monthly power usage.


20/40



Cloud-Computing Overview

While colocation is a service based on hosting your Web hardware, cloud

computing can be viewed as a service based on hosting your Web applica-

tions. Instead o renting space in a providers ortress, cloud computing lets

you rent space in a providers inrastructure, the cloud. Cloud computing

allows you to take advantage o the uniquely tuned inrastructures o Web-

hosting companies like Amazon.com Inc. and Google. Who knows better

how to build an inrastructure to deliver Web applications and servers than

the giants among Internet giants?

Because its new, cloud computing is rather nebulously dened, varying

among service providers. It generally reers to a platorm and a type o

application. According to IBM Corp., the cloud computing platorm dy-

namically provisions, congures, recongures and de-provisions servers

as needed. When reerring to the servers in the cloud, they can be either

the actual boxes or virtual machines provided by virtualization technol-

ogy. A network providers cloud inrastructure should also include security

devices, network equipment and other assets common to any datacenter.

On the other hand, cloud applications, as described by IBM, are extended

to be accessible through the Internet, and use large datacenters and pow-

erul servers that host Web applications and Web service.

Research group Forrester provides another denition. Cloud comput-ing looks very much like the instantiation o many vendors visions o the

datacenter o the uture; its an abstracted, abric-based inrastructure that

enables dynamic movement, growth and protection o services that is

billed like a utility.

With cloud computing, customers never have to purchase their own Web

servers and have a pay-as-you-go plan or using providers servers. Also,

users dont have to license any particular sotware to access a cloud-com-

puting providers server. Because cloud computing is delivered as a Web

service, customers log in to the providers site via their browsers.

Cloud computing is still in its early days and, in a ashion typical o new

technology, is proving itsel among smaller companies and departments

within larger enterprises. This new outsourcing model is becoming more

and more popular with Web 2.0 companies, startups and other bootstrap

businesses because it gives them access to supercomputer resources that

they probably would not otherwise be able to aord; the only hardware

investment necessary is a desktop PC. As Forrester said, with cloud com-

Because its new,

cloud computingis rather

nebulously

defned, varying

among service

providers.


21/40



puting, two guys in a garage can build a service, grow it to $100 million in

revenues, and never buy a single server along the way.

Similar to colocation, cloud computing can also be an extremely cost-eective way to build out datacenter capacity without making any capital

expenditures. Organizations are nding, too, that it can be a practical com-

ponent o an enterprises disaster-recovery strategy. In addition, compa-

nies that experience spikes in trac such as an online toy store that gets

overwhelmed during the holiday season can use cloud computing to

handle the increases in trac only when they happen, eliminating expen-

sive servers sitting idle the rest o the time.

This new orm o IT outsourcing can give young companies a competitive

advantage, allowing them to very quickly provision a server in hours

or minutes rather than days and get their new Web applications outto customers much aster than ever beore. Some organizations are using

cloud-computing services as a cheap and ast test environment; because

you only pay or what you use, its relatively simple to provision a server,

throw up your new Web application, test it and tear down the server when

youre done.

Cloud computing is a paradigm shit in a lot o the development [occur-

ring] in the Web 2.0 movement. Its dierent rom the dot-com movement

you really have to prove your business, make money and then get und-

ing, said Michael Sheehan, technology evangelist or cloud-computing

provider GoGrid in San Francisco. He explained that cloud computing, with

its utility-based pricing model, gives companies a chance to get estab-

lished in the marketplace.

For all its promise, however, some pundits dont believe cloud computing

is ready or the enterprise yet. In a March 2008 report, Forrester said

cloud computing doesnt meet enterprise quality, availability or trans-

parency requirements, and yet, this classic disruptive technology does

provide enterprises with a very low-cost, no-commitment way to quickly

get new services and capabilities to market that entirely circumvents the IT

department.


22/40



The Benefts o Cloud Computing

Cloud computing seems to be part o the Web 2.0 movement, driven in

large part by startups that arent mired in old ways o computing and

organizations that are excited by the new opportunities the technology

oers their businesses. The advantages o cloud computing may also be

realized more readily by bootstrapped companies that are looking or the

most economical ways to access enterprise-grade compute resources.

Established enterprises, however, stand to benet rom cloud computing

as well. For instance, Forrester reported that The New York Times is using

Amazon.coms EC2 services to put its archives online.

Cloud computing oers many benets, some similar to those o colocation

services and some completely unique. Like colocation, cloud computing

oers signicant cost savings or many enterprises, those will eclipse

the amount o money saved by enlisting a colocation provider as well as

an aordable, redundant disaster-recovery solution. Beyond that, compa-

nies that jump into cloud computing will experience unparalleled provi-

sioning speeds, no organizational boundaries limiting developers and an

environment that enables technical innovations. Together, these benets

can give organizations a competitive edge in the marketplace. I your

business isnt ready to tap into the cloud yet, Forrester said it expects these

platorms to mature quickly and better meet enterprise needs during the

next two to three years.

Like colocation vendors, cloud-computing providers have high-perorm-

ing, extremely reliable networks. Their services give you access to the type

o low-latency, highly available network upon which leading Web-services

companies rely. Think about it: When was the last time you got a 404 er-

ror page rom Amazon.com? One o the benets o cloud computing is

reliable disaster recovery; even i a server in the cloud ails, the providers

redundant network will keep your Web applications available. Forrester

reported an interview with an unnamed cloud customer who said, In the

cloud model, high availability is very simple and aordable. Disaster recov-

ery and resiliency are dramatically cheaper.

Saving money is one o the primary reasons an enterprise would enlist

a cloud computing service. When you put your Web applications in the

cloud, you have to purchase almost nothing no dedicated Web servers

and no server operating systems. All you need is the desktop machine your

developers use to code their applications and log in to the cloud. As cloud

computing eliminates the necessity or an internal datacenter, it obviates

the need to hire IT personnel to operate and maintain the datacenter.

When you

put your Web

applications in

the cloud, youhave to purchase

almost nothing

no dedicated

Web servers

and no server

operating

systems.


23/40



Even i your enterprise does currently run a datacenter, leveraging cloud

computing can mean that you dont have to continue building out your

inrastructure, particularly i you need additional capacity or certain times

o the day or even seasonally.

Forrester reported that an undisclosed large telecommunications compa-

ny reduced capital expenditures or particular applications by 30 percent

by using the cloud. It also achieved signicant headcount reduction or

systems administration. The same company additionally reported to the

research group that it was able to repurpose the cloud inrastructure more

than any o its previous inrastructure deployments.

Second to the money cloud computing can save an enterprise is the speed

with which it allows your IT sta to provision new servers. Cloud com-

puting lets developers entirely circumvent the old hardware requisitionprocess, which can save weeks o development time meaning that your

organization is getting new applications deployed or your business more

quickly or new Web services out to market aster than ever beore. Now,

youre moving at Internet speed.

With cloud computing, your IT sta can set up a new server; test their new

services, applications or models; tweak them until theyre ready to go live

on your production servers; and then tear down the virtual server in the

cloud. There are no lengthy, rustrating delays waiting or a test box to be

procured and delivered, and no hety expenditures on new equipment.

IBM described the amount o time server provisions take on its cloud oer-

ing (intended or enterprises that want to operate their own cloud rather

than engage with a service provider) as ollows: Instead o the our to 12

weeks IBM estimated is required to procure and build a pilot inrastructure,

cloud computing provides a ramework that reduces the boarding process

to approximately one hour.

Engaging a server via a provider is a similar process: A developer logs on

to the providers Web site, creates an account (or accesses an existing one),

denes what he needs and uploads his applications. According to GoGrids

Sheehan, the typical deployment time is just ve minutes rom when you

congure a server through the providers Web portal to when you can SSHor RDC into the actual server. Moreover, it takes just a ew seconds to cre-

ate a load balancer.

Thus, a cloud-computing provider gives you on-demand scalability. When

you need additional capacity, you simply go online and add more; when

you need less, you can just as easily scale your virtual machines capacity

back. According to Layered Technologies Inc., a cloud computing provider


24/40



in Plano, Texas, your application can be scaled rom a raction o a server

to dozens o machines with no need or code modication because your

application isnt tied to a particular box on your network.

Lastly, cloud computing rees up your IT sta to ocus on innovating new

Web applications and services or your business. Instead o tracking down

compute resources and managing hardware, your developers can spend

their time on their code. You can prove the value o a new application by

hosting it in the cloud, letting users give it a spin, and then expand the

application as it becomes more successul. Extending the Web 2.0 parallels,

Forrester called this approach viral-based. As Forrester said, new technol-

ogy plays well in the cloud.


25/40



Cloud-Computing Market Overview

The rst providers to oer cloud computing services are the Internets

most successul Web services companies, such as Amazon.com and

Google, and huge, national enterprise hosting providers, such as Rack-

space US Inc. and Terremark.

Forrester described the players in this market in its March 2008 report, Is

Cloud Computing Ready or the Enterprise?: The leading Web-services

companies have built their businesses around innovative new approaches

to IT inrastructure that maximize datacenter management and eciency

investments that have given them a distinct advantage over competi-

tors that came to Web services rom a traditional IT oundation.

In this report, Forrester also identied a ew common characteristics that

have allowed these providers to turn their massive datacenters into prot

centers with cloud-computing oerings. Even the largest enterprises rarely

have these kinds o hyper-scale computing resources in place and the

experience to eciently manage them.

First, hosting providers buy datacenter equipment, including servers and

storage, by the thousands o units (rather than by the handul like most

large companies), and so have serious negotiating power over the cost o

hardware, sotware and support. With any luck, providers will pass these

savings on to their customers. Second, these Web-services companies havedeveloped excellent practices or handling dynamic workloads, and can

spread Web applications across thousands o servers and scale them with-

out disrupting service. Third, by monitoring the inrastructure consump-

tion o each Web application they oer as a service, these providers have

gained particular expertise in managing dynamic capacities. And ourth,

because Web-service providers are already tracking IT-resource consump-

tion by application, they can turn this reporting into a pay-as-you-go bill-

ing system or their new cloud-computing oerings.

Dan Golding o Tier1Research likens the current state o cloud computing

to the Internet in 1993 he thinks no vendor has achieved the vision ocloud computing, and each service is decient in one way or another. He

said, Well get there, but it will take a couple o years.

Golding described some o the tradeos that are currently inherent to

cloud-computing services, saying that no one vendor has gotten every-

thing just right yet. For instance, Amazon.coms pioneering service is quick

to provision, but it only has a command-line interace and supports Linux,

according to Golding. In addition, some vendors oer live tech support,


26/40



while others have nothing more than FAQs posted online and a hosted

user community. Amazon.com isnt the only provider to support only Linux

operating systems, though more vendors are coming online with Microsot

Windows support.

This market is still small compared to the number o vendors oering co-

location services, but more providers are launching new cloud-computing

services. Some o them are still in public beta mode, but many are produc-

tion services.

Cloud-computing providers include:

Amazon.coms Amazon Elastic Compute Cloud (EC2). This fagship

Web service includes Amazons S3 (Simple Storage Service) and is

in beta

ENKIs Computing Utility, which use 3Tera Inc.s AppLogic

GoGrid, which is in beta; GoGrid is a ServePath company

Googles Google App Engine, a ree preview release with size

limitations

Joyent Inc.s Accelerator, which is in production

Layered Technologies GridLayer, which is based on 3Teras

AppLogic

Mossos The Hosting Cloud, which is in production.

Terremarks Enterprise Cloud

Xcalibre Communications Ltd.s FlexiScale, which is in production

Its important to note that several additional vendors, including IBM, Dell

and 3Tera, sell the sotware, hardware and services necessary or an enter-

prise to build its own cloud; these oerings are outside the scope o this

buyers guide.


27/40



Key Services and Features o Cloud

ComputingCloud computing invites comparisons to utility computing, but it oers

more than just compute resources. Cloud computing also includes database

and storage services or instance, Amazons EC2 is bundled with Amazons

storage Web service, S3 and, because services can be turned on immedi-

ately, it is ar closer to the on-demand ideal than utility computing.

Even though cloud computing is a new orm o enterprise Web hosting,

providers have rallied around similar eatures and services in their oer-

ings. In general, cloud-computing services are built on a standardized

inrastructure, use virtualization technology and employ a pay-as-you-gobilling system. Technical support is spotty among providers, although

most o them have an online community and maintain blogs. They use

dierent metrics to measure resource consumption in the cloud. And they

currently are more likely to support a Linux-based OS than Windows, but

that is changing.

In general, when you procure cloud-computing services, you pay or the

amount o memory, storage and bandwidth you consume. Providers tend

to oer pre-congured bundles o RAM, gigabits o storage and band-

width, which gives developers an easy place to start with the service.

Networks in the CloudAlthough ew providers disclose details about the network on which

theyre operating their cloud service, the network, by denition, must be

robust and stable to support cloud computing. According to Forrester,

undamental to the cloud-computing model is standardization o the

inrastructure and abstraction layers that allow the fuid placement and

movement o services.

Some vendors use their scale-out server hardware or both compute

resources and storage, while others are adding SAN (storage area net-

work) storage. Network security is also an important component, particu-

larly or enterprise customers; a cloud inrastructure includes integratedrewalls, or instance, and connections should be secured by SSL (secure

sockets layer).

Some cloud-computing providers are venture companies o large managed-

hosting vendors. For instance, Mosso is a Rackspace company, and so it is

built on Rackspaces redundant network and datacenter. Similarly, GoGrid is

a ServePath company. Others, like Terremark, are major multinational inra-


28/40



structure- and managed-service providers with T1 networks, and are simply

adding cloud computing to their growing portolios o services.

Many providers will tell you what kinds o servers they have or rent, and

oten give customers a choice o size and speed among the kinds o serverimages that can be provisioned. Whether you want just a small bit o addi-

tional compute power or enough resources to mimic a ull datacenter, you

can provision the amount you need through your Web browser.

Amazon.coms EC2, or instance, gives customers two types o CPU in-

stances to choose rom, standard and high, and users speciy the size

instance rom within one amily. Amazon said the standard instances are

well suited or most applications, while the high-CPU instances are well

suited or compute-intensive applications because they have more CPU

than memory. So, the smallest standard instance (also the deault) is 1.7 GB

o RAM, 160 GB o storage space and a 32-bit platorm. EC2s largest high-

CPU instance has 15 GB o RAM, 1,690GB o storage and a 64-bit platorm.Similarly, GoGrid lets you choose rom six options with a dierent number

o Xeon CPUs, RAM and storage space. The smallest server image has 1 x

Xeon with .5 GB o RAM and 30 GB o storage; the largest has 8 x Xeon with

16 GB o RAM and 2,000 GB o storage space.

Some vendors oer a tool or customers to track the amount o resources

theyve consumed, which helps you monitor your usage and maintain a

tight budget. Mosso, or instance, shows the number o compute cycles

used in the control panel.

For the enterprise looking to consolidate a datacenter, providers are begin-ning to oer virtual datacenter services in the cloud. Layered Technology,

or instance, has three Virtual Private Datacenter packages. The largest one

includes 8 CPUs, 8 TB o RAW storage, 4 TB o usable mirrored disk space,

32 IP addresses, 10,000 GB o bandwidth and scaling rom our to more

than 48 nodes.

Load balancing is oten another network eature. A GoGrid account

includes F5 BigIP load balancing, which is automatically set up in about

ve minutes. It includes three Virtual IP addresses, which are the IP ad-

dresses the load balancer uses to direct trac to your servers, more o

which can be purchased. Mossos Hosting Cloud also includes enterpriseload balancing.

Storage ServiceServer space wouldnt be very useul to many enterprises without storage

space to hold their data. Many cloud-computing vendors include storage

services; indeed, you cant purchase Amazon EC2 without also purchasing

S3. Mossos service includes 50 GB o SAN storage space, and Layered Tech-


29/40



nologies includes 40 GB o disk space in its monthly server package. Joyent

Inc. uses Sun Microsystems Inc.s Sun Fire X4500 servers to integrated stor-

age and server in a single high-density box.

Some cloud providers also oer a cloud storage solution in addition to the

application hosting service.

SotwareAlso important or many cloud-computing oerings is virtualization. This

is generally transparent to the user, but it explains how a cloud-computing

provider makes such ecient use o its servers.

Server-virtualization technology allows the vendor to abstract its hardware

into multiple virtual devices. Most o these providers use open source

virtualization technology; the Xen hypervisor is particularly popular, and isused by GoGrid, FlexiScale and others.

In addition to virtualization, a cloud inrastructure uses sotware, such as

3Teras AppLogic (a powerul and popular grid OS), that makes it easy or

the customer to add, move or change an application thats hosted in the

cloud.

The only sotware that a customer tends to see at all is the online portal

used to sign up or and access a providers cloud-computing services and

management interace. Most vendors have developed a Web-based GUI

to simpliy server provisioning and management. Amazon EC2s command

line interaces are the exception.

Some providers also oer development tools. Google has an SDK (sotware-

development kit) that programmers can reely use to develop Google

Engine Apps; you dont necessarily have to have a cloud computing account

to download and use this SDK. Mossos Hosting Cloud also includes sotware

or creating Web sites, databases and email accounts in its cloud.

OS SupportMany cloud-computing vendors initially supported servers and applica-

tions running Linux-based OSes, including Solaris, Red Hat Enterprise

Linux and Ruby on Rails, but more and more are adding Windows supportas well. Joyents Accelerators, Amazon.coms EC2 and XX support only

Linux OSes. In comparison, Terremarks Enterprise cloud, Mossos Hosting

Cloud, Google App Engine and GoGrid support both Linux and Windows

OSes. Also, cloud-computing vendors who have built their services around

3Teras AppLogic should be OS neutral.

A ew vendors, including Terremark and GoGrid, oer precongured server

images that make it even easier and aster to get started.

The only sot-

ware that a cus-

tomer tends to

see at all is the

online portalused to sign up

or and access

a providers

cloud-computing

services and

management

interace.


30/40



As cloud computing matures, these services should evolve to support nearly

any type o application you want to host. Forrester sees no reason why cloud

computing inrastructures wont soon support any x86-compatible OS.

Technical SupportFor some cloud-computing providers, technical support seems to be an

aterthought. Because its not necessarily a given eature, technical sup-

port can really dierentiate one provider rom the pack. The players with

a traditional hosting background, such as Terremark and Mosso, currently

oer more robust technical support, either included or as add-on services.

The Web-services companies dont oer much in the way o tech support

beyond what the community members are willing to provide about their

experience with the cloud service.

O its tech support, Joyent said, Joyent Accelerators are designed and priced

or a well-trained operations and systems sta, and at their price point

include only minimal support. This includes merely an inaccessible accelera-

tor, slow perormance and malunctioning system-level unctionality. Joyent,

unlike some providers, does oer additional tech support as an add-on.

In comparison, Mosso and GoGrid include in their services 24/7 tech sup-

port via online chat and the phone.

Amazon.com has an online resource center or customers, but i you want

more traditional tech support you have to pay or it as an add-on service.

Googles community may help you, but there is no tech-support oering

beyond its discussion groups and developers guide.

Almost every cloud-computing provider has a growing online community

that contributes to user orums and a knowledge base, and there is usually

a technically minded company representative blogging about the pro-

viders cloud and services.

Unlike colocation providers, cloud computing providers dont all oer

SLAs. For many, their services are too new; others dont have the customer

support in place. GoGrid and Mosso are among the ew that do oer a 100

percent uptime SLA.


31/40


32/40



Although its not true to the pay-as-you-go cloud-computing ideal, some

enterprises might preer a monthly package, such as Mossos Hosting

Cloud. For $100 a month, the service includes online sotware, 50 GB o

SAN storage, 500 GB o bandwidth and 10,000 compute cycles (which theprovider equates to 11 million page views). I your Web applications grow

beyond these parameters, Mosso automatically charges you or the addi-

tional capacities: 50 cents per GB or additional disk space, 25 cents per GB

or more bandwidth, and 1 cent per additional compute cycle.

In comparison, Layered Technologies also charges a monthly ee or its

GridLayer Virtual Private Server plus a $19 set-up ee. For $49 a month,

you get 40 GB o disk space, 256 MB RAM allocation and 1,500 GB o data

transer. Twice as much disk space costs $10 more a month. This provider

also oers virtual datacenter packages, which range rom $349 a month

or a developer package to $3,996 a month or the ully-loaded, premiumdatacenter package.

You can also subscribe to DynaVol, Layered Technologies Web-based

storage service. Monthly ees range rom $15 or 25 GB o data storage to

$1,300 or 5,000 GB o storage.


33/40



Which Solution Is Best or My Site?

For the largest enterprises, whether to engage with a colocation provider

isnt even a question colocating servers makes too much sense, i only

as part o a disaster-recovery plan. For these companies, the true question

is i they should also start experimenting with cloud computing. I your

organization needs to decide on one type o Web-hosting option over

another, there are several actors to take into account.

First, i you preer your Web applications to be hosted on servers in the

same geographic region as your companys headquarters, or i you want to

have physical access to them, you should choose colocation. Despite grow-

ing demand or colocation space, there are countless colocation acilities

around the country and you can assuredly place a Web server within easytravel distance. Cloud-computing providers, on the other hand, dont guar-

antee any sort o geographic location or your Web applications.

According to Forrester, Layered Technologies is one o the very ew cloud-

computing providers that will allow you to place your application in a

specic geography. Amazon.com has dierent geographic regions, but

wont accept requests or specic locations. Forrester pointed out that this

runs aoul o certain government regulations that require customer data to

be retained within a countrys borders.

Second, i you want to oer SLAs to your customers, you could choose eithercolocation or cloud computing. I you go or the cloud, however, choose

careully unlike colocation vendors, ew cloud providers oer SLAs, which

you can pass on to your Web site visitors. Those that do have SLAs oten

charge more or their cloud services. Forrester addressed concerns about

stability by noting that most startups wont be scared o by the absence o

SLAs even though it may be a deal-breaker or some enterprises.

Third, i your organizations goal is to phase out a datacenter, colocation

is probably the better choice. It allows you to operate your current inra-

structure as though it were a hyper-scale datacenter, so you dont lose the

investment you already made in those boxes. However, i you want to addcapacity to your current datacenter, cloud computing makes more sense

you get high-perormance servers or zero capital expenditures and no

commitment.

Fourth, i your organization wants to try out new Web services or tech-

nology acquisitions without interering with its production servers, then

cloud computing is a better choice than colocating another server or this

purpose.


34/40



In act, Forrester recommended that companies use cloud computing to

immediately evaluate new Web 2.0 unctionality coming into the enter-

prise. Also, Forrester said that replacement o existing systems, particularlymission-critical systems like email, should be put o or two to three years,

while cloud computing oers mature. Theres a good chance that cloud

computing will soon oer an alternative too cost-eective to ignore.

And th, your organization may need to weigh the advantages and dis-

advantages with the types o expenditures associated with the dierent

hosting models in order to choose. Perhaps your budget has room or only

a capital expense rather than another operating expense. I youre simply

relocating servers to a new colocation provider, then you incur only op-

erating expenses or the service. Similarly, a cloud-computing service can

be tallied as an operating expense. However, i you plan to purchase newequipment to install in a colocation acility, your organization then incurs a

capital expense.


35/40



Solution Comparison Chart

When it comes to comparing colocation services with cloud-computing

services, the dierences become immediately clear. Enterprises that preer

a consistent, predictable billing cycle and traditional technologies are

more likely to choose colocation or their Web hosting. Cloud computing

oers signicant cost savings, but because its a new technology, some en-

terprises may want to experiment with it beore moving their production

Web applications to a cloud provider.

Colocation Cloud Computing

Status o service Production Some production;

many providers ser-vices are still in public

beta.

Customers hardware

investment

Signicant. Typically,

customer must pur-

chase, congure and

maintain server.

Minimal. Customer

does not purchase

hardware beyond PCs.

Provider hosts all inra-

structures.

Customer licenses

server sotware

Yes No

Billing terms Contact sales to set up

terms. Generally re-quires long-term sales

contract.

Do-it-yoursel online.

Pay-as-you-go, month-ly or annually, based

on how much RAM

you consume or how

much RAM is included

in prepaid plans.

Global services Yes Yes

Geographic locality Yes; customers may

preer a colocation

acility near their head-

quarters.

Limited; ew providers

will place your appli-

cations in a particular

geographic location.

Inrastructure dedi-

cated to individual

customers

Yes No

Physical access to

hardware

Yes No


36/40



Service plan options Customers choose

type o space, includ-

ing single server rack

space, secure cabinets

or shared cages.

Customers choose

among plans that may

be based on RAM us-

age, storage space or

hourly rates.

Immediate deploy-

ment

No Yes

Oers 99.999% to

100% SLAs

Yes No

Enterprise-load bal-

ancing

May be add-on service Limited

OS support NA Linux, limited Micro-

sot Windows, limitedmixed environments.

DNS Support Limited Limited

Spam/virus blocking May be add-on service Limited

Network storage May be add-on service Yes

Firewalls May be add-on service Yes

24/7/365 technical

support

Yes Limited


37/40



Checklist: What to Ask Beore You Buy

You should answer several questions about your organizations needs,

requirements and culture as you decide between a colocation and a cloud-

computing provider. You should also consult with potential vendors beore

subscribing to a new service. You may nd that your Web-hosting strategy

would benet rom both types o Web hosting.

Consider these questions:

Is your company willing to use a service in public beta mode?

Many cloud-computing oerings are not yet in ull production.

Is your company looking or a way to get new Web 2.0 applicationsup and running as quickly as possible?

Does your company require dedicated bandwidth at all times?

Colocation providers usually guarantee dedicated bandwidth.

Are the bandwidth requirements o your companys Web

application consistent? Do you need to be able to scale up and

down quickly to meet peaks and valleys o demand?

Does your companys IT sta have the internal resources and

expertise to manage high-end servers at a colocation acility?

Does your company have SLAs with your customers to whom you

need to adhere?

Is your organization comortable with open-source sotware and

applications? Cloud computing generally incorporates open-

source solutions, including Xen or virtualization and Linux or

OSes.

What speeds are available on the providers network? To ensure

the kind o speed and reliability enterprise applications require,look or a provider with OC192 connections; at 10,000 Mbps each,

these are the astest available Internet connections.

What kind o physical and network security does the provider

oer?

How does the provider ensure reliability and redundancy?


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Does the provider oer 24/7/365 technical support? Is it included

in the basic contract or must you pay an additional ee or it?

Does the provider oer you all the services your company needs ina package or a single rate?

Are you willing to entrust your companys Web applications to

a lesser-known provider? Or do you preer to host your Web

applications only with a brand-name national provider?

Do you recognize the providers other customers? Many brand-

name companies use colocation providers and, increasingly,

cloud-computing providers to host their Web sites. That can be

a sign o technical reliability and nancial stability. Ater all, you

want your provider to last as long as your hosting contract.


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Conclusion

Although many businesses have the in-house expertise and the datacen-

ter capabilities to host their Web applications internally, ew can aord

to do it all themselves. The cost savings oered by both colocation and

cloud-computing services are too compelling to ignore, particularly when

a company actors in the reduced headcount that becomes possible with

outsourced IT inrastructure. Enterprise Web hosting can also help organi-

zations reduce their carbon ootprint and support greener IT policies. And

both colocation and cloud computing oer economical ways to protect

against application downtime and server ailure.

Colocation is an established service that is oered by many recognizable

players in the IT outsourcing market, so no matter where your company

is located, youre likely to have access to high-quality colocation acilities.

Cloud computing may not be proven like colocation, but it certainly has its

place in an enterprises outsourcing strategy and Forrester recommend-

ed companies o all sides begin experimenting in the cloud now.

This new dynamic platorm will start to better meet enterprise needs later

this year, and enterprise-class names will enter the space, noted Forrester

in its March 2008 report. The research rm recommended that companies

should determine which applications could be candidates or cloud ex-

perimentation based on business criticality.

When it comes into jumping into either colocation o your datacenter or

into a cloud-computing venture, Dan Golding o Tier1Research advised,

Skepticism is in order. Caution is in order. Dont say, 2009 is the year we do

cloud computing. He suggested companies instead should examine both

types o hosting and ask, What can we do dierently with colocation or

with cloud computing that wouldve been hard beore?


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Tippit, Inc.

514 Bryant Street San Francisco CA 94107


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