Outsourcing Brain Power
The other reason to employ a hosting service instead of an in-house server concerns expertise. The hosting services that lease connections from larger ISPs are selling their knowledge and expertise. They know what theyıre doing not just in terms of bandwidth, but also Web commerce. Indeed, some are starting to specialize in commerce servers for particular industries--storefronts for retailers, online Webzines for publishers and business extranets for manufacturers, to name a few examples.
Additionally, most will specialize in certain software brands, especially when it comes to e-commerce. Hereıs where you need to be careful. Many commerce-oriented hosting specialists will implement a single brand of commerce server software and attempt to customize it to fit each customerıs needs. For small shops this isnıt a problem; in fact itıs usually an advantage. But for larger companies that need to consider special circumstances and massive amounts of legacy software, such an approach could be constricting.
Find out as much as you can about the software your potential hosting service uses. Will it support conversions into open file formats? What back-end database is employed, and can it export your data effectively? What are the companyıs policies on customers wanting to move on? If the company boasts that it can handle any kind of software brand to fit your situation, smile and ask to see examples of this in their customer base.
Electronic payment is another thorny issue. Businesses have long relied on EDI/EFT, which usually requires a third-party clearinghouse, called a VAN (value-added network). If business-to-business commerce is what youıre after, then finding a hosting service that understands EDI is crucial because itıs still the accepted standard. Many businesses, both large and small, specialize in supporting both you and your outside partners with EDI services, but thatıs usually an added cost above and beyond hosting.
For storefront commerce users, the main issue is credit-card payments. Sometimes these services are a separate software application all their own; sometimes theyıre a module in an overall e-commerce server software package; and sometimes the hosting service simply bumps them out to yet another third-party. Some companies specialize in taking any kind of electronic payment from the customer and then dishing it back to the vendor in whatever format required.
As you can see, the arguments for and against outside hosting are many and complicated. The core advantages can be summed up as follows:
- Minimizing WAN bandwidth and network hardware headaches
- Capitalizing on the experience of the hosting serviceıs e-commerce experts
- Having much of the business plumbing required for e-commerce in place
- Minimizing the need for additional IT staff and hardware to maintain 24-hour up-time and quality of service for customers and business partners.
To be fair, the disadvantages include the following:
- Removes you by at least one layer from both a key network element as well as a core business mechanism; should something go wrong, youıre reliant on these folks to keep your business running
- Might lock you into a single vendorıs e-commerce software solution
- Might similarly lock you into a single vendor or bankıs e-commerce payment scheme
Selecting a hosting service provider is not a casual task if you intend to run any kind of e-commerce effort. How much space theyıll give you on their servers and how much that will cost you per month are insignificant questions when compared to exactly how they connect to the Web, what solutions they run, how much flexibility you have and what they intend to do if ever the whole thing goes down. Many IT managers, especially those with deep pockets and truly large-scale e-commerce projects, donıt feel safe using an outside source. They prefer to keep things in-house.
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