Making Heads or Tails of Hosting Costs

Updated: April 30, 2009

Not so long ago, comparing costs among hosting providers was a relatively straightforward and painless process: A business would check out a few vendors , see what each offered in terms of bandwidth and disk space, consider a few other factors like setup costs and support, and sign the deal. No problem.

But that was then, and this is now. These days, as hosting has splintered into several different submarkets, determining whether a provider is offering the best deal in terms of price and service quality has become a far more complex and confusing matter.

To help your business cut through the clutter and find the deal that most closely matches its needs and budget, here is a rundown of the key factors to consider when researching various types of hosting providers.

Dedicated Hosting

What It Is: Under a dedicated-hosting arrangement, the vendor provides the customer with an exclusive server and full control over the machine.

How to Compare Costs: Your business should compare plans on the basis of bandwidth size and storage space. You'll also want to examine the level of support supplied by each provider, as well as any additional fees.

Managed Hosting

What It Is: Managed hosting differs from dedicated hosting in that customers are not only supplied with an unshared, dedicated server but also with a full array of management services.

How to Compare Costs: Check out each plan's amount of supplied bandwidth and storage space, as well as which management services are included in the contract and which are available at an additional cost.

Colocation Hosting

What It Is: Colocation hosting differs from dedicated- and managed-hosting plans in that customers install their own servers, networks and storage equipment inside of a facility, alongside hosting infrastructure from other customers.

How to Compare Costs: Although your business supplies most of the technology in a colocation arrangement, there is still a variety of expenses to consider. With each plan, examine bandwidth size, space-rental fee, rack size, physical-access restrictions, physical-security support and any additional fees.

Clustered Hosting

What It Is: Clustered hosting "virtualizes" resources beyond the limits of a single server. By spreading system-protection, load-balancing and site resources across multiple machines, clustering aims to enhance security, availability and scalability. Customers may purchase as much computing power as they need from a shared server pool.

How to Compare Costs: Other than examining bandwidth, storage and support levels, buyers should look at the cost of, and any restrictions on, scaling computing power. It also pays to look at each provider's promised levels of availability, as well as security guarantees (if any).

Rich-Media Hosting

What It Is: Rich-media-hosting service providers specialize in the distribution of video and other high-bandwidth content formats.

How to Compare Costs: Look for the usual rate tiers related to bandwidth, storage and support levels. With rich-media hosting, your company will also need to compare the number and location of each provider's "points of presence" to make sure that content will be efficiently distributed to all users.

Cloud Hosting

What It Is: Cloud hosting runs Web applications on a "cloud" — a collection of external, virtual servers interconnected either on a corporate network or via the public Internet. The idea behind cloud hosting is to provide a resource that's highly scalable, reliable and available, with little or no regard to the system's underlying technology or physical location.

How to Compare Costs: Cloud hosting is an emerging technology, so providers are trying a variety of different models, including subscription-based and pay-per-use services. In either case, key cost-comparison factors include bandwidth size, storage capacity, scalability, flexibility and availability rates. Some providers also charge a "per-compute cycle" fee, a benchmark that's used to measure how much processing time a customer's applications require on the cloud.

The Bottom Line

As the hosting market becomes increasingly stratified, the most important step is to decide which service approach to adopt. Only then will it be possible to fairly and accurately compare prices and plans among different providers.

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