Building E-Commerce

December 15, 1998

The bottom line for outside hosting services is usually that itıs cheaper, both in terms of hard dollars and soft dollars as they apply to the technical talent required to get one of these systems running. Enterprise IT departments usually have budgets big enough that the dollar problem is minimized. What they want is control, and theyıll hire the talent and buy the equipment needed to make that happen.

If youıre on the fence, a simple guideline might be that hosting services are most established at running storefront operations. Extranets, whether partner-to-partner or even partner- to- partner- to- customer, are still best controlled from inside the company. Thatıs not to say that third-party extranet hosting services donıt exist, itıs just that theyıre more of a dark horse as compared to storefront operations.

If in-house e-commerce is the way you want to go, you start at the same place as hosting, namely bandwidth. The difference is that youıre just building it yourself. Usually, this requires a consultant because what youıll wind up with is a highly complicated SLA (service-level agreement) negotiation with your local telco. Unless youıre up on the latest developments in the WAN bandwidth market, hire someone who is.

As weıve discussed, buying a high-speed Internet connection is as much an issue of where you are located as it is with the width of your pipe. Then there are the added issues of installation costs, subscription costs, traffic allowances, quality of service guarantees and emergency fail-over. SLA consultants will get you the best deal possible, not only in terms of raw connection speed, but also in how that speed best applies to your budget, business location and project.

Donıt let the consultant take your instructions and execute them on his/her own. Sit in on all negotiations and ask questions. Why is he/she considering a cable connection instead of T1? Itıs great that the telco is guaranteeing emergency fail-over, but exactly how would that be accomplished? Depending on how important your e-commerce servers are to your business, consider a backup carrier service. In case MCI goes down, for example, your data could be routed via Sprint. This is expensive, but could be worth it depending on your situation.

MCI, UUNet and Sprint are considered the largest Internet backbone service providers, in that order. If your company is located in an area serviced by one of these giants, start with one of them when comparing price versus service. Those with headquarters in other areas of the country (or world) should look for a backbone-level provider in their geographic area; GTE, PSINet, DIGEX, IBM, AT&T, and GeoNet are a few backbone players with small market share.