As I explained yesterday, the big cost in providing internet hosting is paying humans to provide support. However there are still some technical factors that affect the price, and that’s what we’re looking at today.

Most internet hosting customers would be familiar with the usual measures: the amount of storage space you get and the amount of data transfers (“bandwidth”) per month. Those raw measures of capacity are certainly important. You need enough capacity to meet your needs. But you also need to consider performance, reliability, scalability and flexibility.

Performance. The key issues here are whether you’re sharing a server or have your own, the performance of that server, and the performance of the network it’s connected to.

At the lower end of the market, shared web hosting means your website and mailboxes are sharing a computer with other customers — sometimes dozens, hundreds or even thousands. If you want a server computer just for your business, that’s called dedicated hosting. Obviously it costs more, but it does mean you have the computer’s total capacity. Other customers’ usage won’t affect your website. It also reduces the security risk.

There are other systems such as clustered hosting, where the load of many sites is spread across multiple computers, and virtual private servers, where it looks like you have a dedicated server but it’s being simulated — but that’s all outside the scope of this article.

Whether it’s shared or dedicated hosting, the server’s performance can make a difference. The apparent speed of your website will in part depend on the speed of the server’s hard drives and processors, the amount of memory (RAM) it has and so on, as well as the capacity of its network link. Cheap hosting providers may put many, many customers onto a relatively low-grade computer with poor network links. And a cheap data centre may provide less network capacity for a given number of customer websites.

Prussia.Net has been offering shared hosting with around 50 accounts and a total of 170 domains running on a relatively modest server with a Pentium 4 2.66GHz processor and 2GB of RAM. While this sounds small compared with a desktop computer, remember that servers don’t have to run a graphical interface. That said, this server is reaching capacity and that’s one of the factors that led us to review what we do. The server is in ServePath‘s data centre in San Francisco, which is provided with high-capacity data links to the internet.

Reliability. A system’s reliability is measured by its uptime, the percentage of time for which the system has been “up” and running. Sometimes it’s measured in the “number of nines”, for example “four nines” being 99.99% reliable.

Many hosting providers advertise 99% reliability, which sounds good until you realise that you could endure more that 7 hours of downtime per month and still be getting the service you’re paying for. That’s not good if those 7 hours take out a busy working day.

“Four nines” or 99.99% reliability is 4 minutes 23 seconds of downtime per month, and “five nines” or 99.999% reliability is a mere 26 seconds of downtime per month, or a little over 5 minutes in total per year.

Setting up such highly-reliable systems obviously takes engineering skills, planning and money.

Many hosting providers advertise 99% or 99.5% or 99.9% reliability, excluding “scheduled downtime” for systems maintenance. If you want higher reliability then you can expect to pay much, much more money. If a problem has to be fixed within five minutes, you can’t rely on someone responding to a complaint and then trying to work out how to fix things. Backup systems have to be set up in advance, with automated monitoring ready to switch everything over in the event of a failure.

Many hosting customers forget that even if their hosting server is, say, 99.9% reliable, the overall reliability of their website or email will depend on how their website has been built and what arrangements they’ve made for their web developer to be available to fix problems. The hosting server could still be 99.9% reliably serving out a broken website!

It’s also easy to forget that even if a hosting server is “guaranteed” to be 99.9% reliable, that may just mean you get your $29 monthly fee refunded if things go wrong. Again, not good if being offline for an hour means you’re losing hundreds of dollars.

Other hosting providers don’t specify an exact target reliability level, but simply take reasonable steps to keep things going. This is called “best effort” reliability. While “best effort” hosting is often quite reliable, there are no guarantees.

Prussia.Net’s data centre, ServePath promises a 10,000% Guaranteed®, 100% Uptime Service Level Agreement, which means that for every minute their network in unavailable they refund us 100 minutes’ worth of our monthly fees. However Prussia.Net itself offers only “best efforts” reliability, as we don’t have automated monitoring systems. In practice, we’ve experienced 133 minutes of unscheduled downtime in the last six months, which is about 99.95% reliability — but that’s more through good luck than planning.

Scalability. To give an overly-simply explanation, this is about how your internet hosting can cope with sudden increases in demand — for example if your website suddenly becomes vastly more popular than you expect, or there’s a sudden increase in email traffic. A cheap hosting provider might be running everything very close to full capacity, which means a sudden surge in traffic will cause everything to fall over.

There’s also a business angle to this. The hosting provider might offer a certain amount of base capacity, but anything over your pre-booked capacity might still be delivered — but at a vastly higher price than if you’d organised it in advance.

Hosting can also be provided “on demand” or, to use the current buzzword, though cloud computing. This is where the data centre automatically allocates more capacity as it’s needed, and just bills for usage. This is rapidly becoming the preferred method.

Prussia.Net’s hosting server is moderately loaded. We’ve coped with surges of email 10x their normal levels without problem. However this week we saw a massive spam surge at 32x normal levels and we struggled — although this was the biggest spam surge we’ve ever seen in more than a decade of operation. I’ll write more about that soon. I’m seriously considering just on-selling cloud services instead.

Flexibility. A computer can be configured any way you want. However to make it easier to sell its services a hosting provider will usually offer only a certain set of pre-defined options. This keeps the cost down, as staff just choose from a list. Some providers will be more willing to customise the set-up, but that will always be more expensive.

Prussia.Net has always been willing to customise a client’s hosting account however they want. Indeed, this was originally one of the key differentiators of our service. However this has meant keeping prices high.

You may well be looking at this and saying, “I’m a business manager. I don’t care about these technical details. I just want things to work.” What you’re looking for, then, is a “managed service”.

A hosting provider is really just renting out capacity on a computer or multiple computers in a data centre. Questions about what options are right for your business isn’t their concern. That’s the job of your CIO or your IT Manager. “But,” you say, “I’m a small business and I want someone else to figure this out.”

That’ll be the topic of the next article in this series, “IT support vs management vs consulting”".

Comments please. This is very much a first draft of my thoughts on this topic. If you have any questions or comments, please let me know.

Internet hosting prices are usually explained in terms of the amount of storage space you get and the amount of data transfers (“bandwidth”) per month. However the real cost factor is paying the humans who provide support.

Some technical factors do affect the price of hosting, and I’ll address those tomorrow in Internet hosting: the cost of reliability. But with storage and bandwidth prices always dropping, particularly when set up on a large scale, hosting is now so cheap that Google, say, or WordPress.com and many others can provide free hosting in exchange for advertising. Or in Google’s case with Gmail, monitoring your email to build a profile so they can target advertising at you.

No, the humans are the expensive bit, and the cost can vary dramatically depending on how that support is provided. Here’s just a few of the factors.

Response time. From the time you initiate a support request, how long is it until someone answers? A fast response means paying for people to be there, and if you want to guarantee that response time then you need spare people in case it suddenly gets busy.

Prussia.Net has been providing support for our internet hosting service with a target response time of one hour, but allowing it to be slower when things get busy.

Hours of service. Do you want support to be available 24/7? Even on public holidays? Then you’re paying for a team to work around the clock.

Prussia.Net has been providing support 24/7, 365 days a year.

Phone support? Or email and web support? Phone support is much more expensive to provide than support via email and the web. Phone support requires fast response times because clients don’t want to wait on hold, and staff who are good communicators. Phone support also ties up a staff member for the entire length of the phone call, whereas with email support they can fire off a suggested solution and then get on with something else while you try that out. With web and email support, you can also save time by sending a pre-written reply.

However phone support is interactive. Support staff can quickly ask a series of questions to clarify the problem. From the client’s point of view it’s often faster — especially if they don’t have the technical knowledge to write a clear, unambiguous support request.

Prussia.Net has been providing support via email and the web. However I’ve often ended up providing phone support anyway, which is outside our cost model.

Scope of support. Just how many things are the support staff expected to help you with? Say you were expecting an important email but it hasn’t arrived. There’s no fault with the hosting server, and the support staff can see the email sitting in your mailbox. Something’s wrong at your end. Is that now the end of the call? Or are they expected to figure out whether the problem is down to your internet connection or your Wi-Fi or your email program? If it’s your email program, are they expected to help you solve that problem? How many different email programs are they expected to understand? Just Microsoft Mail and Outlook? Apple Mail as well? Your iPhone? Other, less well-known systems?

Prussia.Net, as part of its internet hosting service at least, has in the past been a little vague about this point. In theory our contracted support provider is only meant to help you solve problems with the hosting server, not with the computers and networks your end.

Level of detail and customisation. When support staff send you a technical answer, do they link to appropriate documentation on the web, like a software manual? Send an outline procedure? Prepare detailed step-by-step instructions? What level of technical knowledge should they assume on your part?

Prussia.Net hasn’t had a consistent policy here, and I suspect it’s caused confusion.

Scale versus personalisation. A big support centre is better able to cope with sudden increases in demand, and can arrange to have common problems handled by less-experienced staff (see the next item). That reduces costs. They’re also more likely to have seen the same problem before and have a pre-written response. But the flipside is that you’ll rarely get the same person handling your requests. If the support centre keeps comprehensive notes that’s not so much of a problem, but keeping good notes takes time and time is money.

A big support centre probably won’t have any idea about your business and the way your computers have been set up, so unless you can explain that to them it’ll take a while to reach a common understanding. Conversely, a small support centre means that you’re dealing with the same set of people and after a while they’ll get to know you and your systems.

Prussia.Net’s support team is provided by Bobcares, an Indian firm which specialises in providing support services to more than 200 companies worldwide. Overall Bobcares has more than 300 engineers on staff and is responsible for supporting 3.5 million websites, but Prussia.Net’s needs are provided by a specific team of six people who handle us and a number of other clients — so you’ll tend to get the same people answering your questions. It’s a compromise.

Skill level of staff. 90% of support requests are a few common questions. The most cost-effective approach is to have less-experienced staff handle the initial contact (“first level support”), and only escalate it to more-experienced staff if it can’t be solved. First-level staff can also work from a set of scripted questions. If the scripts are written well, the staff members don’t necessarily need a technical understanding of what they’re asking.

Conversely, some providers have what’s sometimes called “business grade support”. With the most expensive providers, from the very start you’ll be speaking directly to a fully qualified and experienced network engineer. Not cheap.

Prussia.Net’s team at Bobcares is in the middle. Everyone has technical qualifications, but initially your request might be handled by a staff member with less experience. If their first email to you says they’ll need time to get back to you, that probably means they’ve had to ask a supervisor for help.

From a client’s point of view, the ideal support deal would be a specific person they could phone 24/7. An experienced network engineer who knew everything about their business and computer set-up, who’d answer immediately and start working on their problem. It ain’t gonna happen.

Even if a client were willing to hire a full-time network engineer at, say, $100,000 a year and pay their on-costs, that person still needs to eat, sleep, take time out for training and paperwork and take holidays. And one person can’t be expected to know about everything. These days IT is broken down into a number of specialities.

At the other end of the spectrum, if you’re paying $29 a month for hosting, the service provider makes maybe $4 profit. Dealing with just one technical support request kills the profit for that month, and the next three.

Yet in my experience most small businesses want something better than the low-grade support provided by commodity hosting providers. If an important business email hasn’t arrived, waiting 36 hours for emailed technical support won’t cut it.

I suspect that what most small businesses really need isn’t “hosting support” but “technology support” or even “technology management”.

Small businesses and their staff don’t have the skills to start troubleshooting a problem from the beginning, so they don’t know whether they should be calling their internet service provider (ISP), hosting provider, some technical support guy or the shop that sold them their computer.

I’ll expand on these thoughts in the third article in this series, “IT support vs management vs consulting”, to be published on the weekend. And as a bonus link, try my essays from the other year, There ain’t no shortcuts to professionally-managed IT and the cranky “I don’t understand computers” is not an excuse

Comments please. This is very much a first draft of my thoughts on this topic. If you have any questions or comments, please let me know.

[Update 16 April 2010: I should point out that the Prussia.Net service hours and response times I refer to here are for technical support relating to internet hosting. Prussia.Net provides other services, with different service levels, and this too has confused some clients because they didn't necessarily understand which service their question related to. For example, when we did general IT support, that was only available in (extended) business hours Monday to Friday, not 24/7. Administration matters were only dealt with during business hours, and with a 2-day turnaround. But clients would, and still do, send urgent technical requests to the administration email address -- and then wonder why it isn't addressed promptly. I'm not sure how you solve this.]

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My business Prussia.Net always has clients who resist any long-term IT planning. While researching potential suppliers to handle our increasing workload, I stumbled across the best explanation I’ve ever seen for how the process should work.

Many SOHO and very small business seem to have no plan for their IT at all. Most, actually. They just call for help when something breaks, and only replace computers and other equipment when it’s completely dead. They complain that their computers are slow or unreliable, and yet resist spending anything on preventative maintenance or minor upgrades which could deliver substantial improvements.

Zern Liew and I have discussed the causes of this before. However the two key elements are, I think, a lack of understanding of IT issues and the perception that doing things professionally will be expensive.

Last year Australian IT services company First Focus‘s website presented a 3-phase model for developing professionally-managed IT. They removed it when they renovated the site, which I think was a mistake. But here it is anyway, thanks to The Wayback Machine…

In the Learning phase, [we] will meet with your management team to hear about you. What are your priorities? What would you like to be able to do? How much do you want to spend? How much are IT problems costing you right now? Based on this information, we will create a proposal for moving your business towards a “best practice” IT environment. The proposal will include fixed costs, recommendations and alternatives, and we will discuss it with you in plain English to map out what’s going to happen next. During this phase, we will also distribute a survey to all members of staff in your organisation. The results of this survey will be used as a baseline for measuring improvements in your organization’s Network.

The Stabilisation phase is all about ensuring your network meets a minimum level of reliability and usefulness for your staff. A poorly designed or cobbled together network is only going to cause you an endless series of problems. Our goal is to prevent problems from recurring by fixing the root causes, rather than the symptoms. Critical problem areas are addressed first, and typically this phase may include the delivery of one or more Focused Solutions to address key business objectives.

The Support phase is all about ensuring your cost-benefit. This “phase” is more a continual process, where First Focus ensures your network stays highly organized, documented, and stable. Preventative maintenance, Software updates, and Staff training are the hallmarks of this process. A regular strategic IT review is also conducted in order for First Focus to report to your management team, and in order for the management team to keep First Focus aware of any new business objectives or requirements. We will also survey your staff on a regular basis to help you measure any improvement in your organisation’s Network.

Very sensible stuff. The killer for me, though, was their final paragraph:

There are no shortcuts to this process; we can’t maintain your network to the standards we are satisfied with, until it is in a stable state. And we can’t move your network to a stable state until we understand the business processes and objectives your network must support.

100% correct. Businesses can’t ignore planning and maintenance and then whinge about poor reliability and sudden unexpected expenses when things need to be fixed. And yet this is precisely how most small businesses seem to run. It’s like getting a dodgy second-hand car, failing to check the water levels or change the oil when recommended, and then being surprised when the engine blows up.

Even though First Focus dropped that explanation from their website, they’re definitely a contender for Prussia.Net’s outsourced IT support. Expect my call soon, chaps.

There, I’ve said it. Now, with that out of the way, let me explain…

I don’t mean you need to know how computers work, or how to set them up, program them, maintain them or fix them when they break. You don’t need to know how to connect a computer to the Internet, build a website or any of that stuff either.

However you should know enough to make effective decisions about how they’re used in your business. You should know how the leaders in your industry are using the technology. You should be aware of developments that might affect your plans.

In short, you don’t need to know the technology itself, but you do need to know its implications for your business.

Australia’s had a Goods and Services Tax since 2000. If you waved your hand and said, “Oh, I don’t understand GST,” your shareholders would have every right to sack you for incompetence.

Sure, your accountant handles the details. But at the very least you know that the GST is 10%, and you can handle basic business operations like quoting for a customer’s work.

Well, we’ve had the Internet commercially since 1995, and computers for much longer. They’re a core part of doing business. Waving your hand and saying, “Oh, I don’t understand computers” should equally be a sacking offence.

So what do you need to understand…?

Geeks usually get this wrong, and berate “stupid users” for not knowing how the technology works. No.

A typical small businessperson no more needs to know how computers work than Sir Richard Branson needs to be a rocket scientist to run Virgin Galactic. But he does need to know what’s happening in rocketry.

Most businesses are not IT businesses. Most businesses do something else. They make and sell shoes, plan and execute wedding parties, import stuff and sell it to retailers, sell real estate, make pizzas in 10 different stores and deliver them all over a city, drill holes in people’s teeth and fill them again…

Here’s my first-draft list of some of what a non-IT business should know:

1. Know the difference between a server, a workstation, a router and a firewall. That’s like knowing the difference between a car, a truck, a tractor and a trench digger.
2. Know the structure of the industry, and who’s responsible for what. You should know that the person who sold you the hardware is only responsible for the hardware not the software; know whether your software vendor is responsible for training or support or not; the difference between your Internet service provider (ISP), hosting provider, domain registrar, web developer and so on.
3. Know the expected lifespan of your hardware and software, and the expected replacement or upgrade costs — and be planning for it. Knowing that a computer will last X years and that your operating system will be declared obsolete in Y years is like knowing that your truck will last 10 years with good maintenance and will cost $250k to replace.
4. Know the likelihood of various things going wrong, and the rough cost and timeframe for fixing them. Do you rely on the information kept on your server? What happens if that server dies? How long will it take to fix? How will you cope in the meantime?
5. Know current market prices, so you know if you’ve got a good deal. Taking just one example, you should know how much you’re paying for your Internet connection, what percentage of the capacity you’re using, how fast your usage is growing, how long the contract runs — and how that compares with competing plans.

That’s just a start. I suspect the list should be longer. Any suggestions?

Unless you’re a really tiny business you don’t need to know all this personally. However if you’re too small to need a full-time IT manager then someone in your businesses still needs to be across this. Whoever makes the decisions needs to be making informed decisions — otherwise they’re failing in their duty to the shareholders.

Apart from that management-level knowledge, every computer user — you and all of your staff — should know what to do when things go wrong.

If your car’s fuel gauge warns that you’re running on empty, you know to find a service station and fill up the fuel tank. You know roughly how much that’ll cost. On the other hand, if the oil temperature light keeps coming on, or you hear a weird grinding noise, you know it’s time to see a mechanic — an expert. You don’t fiddle with random controls hoping to fix it.

Similarly, you should be able to handle day-to-day computer issues. When an error message says that you’re out of storage space, you should be able to tell whether it’s your local computer’s hard drive that’s full, or your server, or your email mailbox or whatever. You should also know when that error message is serious enough to call in that expert.

To discuss your car with a mechanic, you need a common language: brakes, steering wheel, gear lever, radiator, tyres. Similarly, you should know the basic parts of your computer, both hardware (monitor, hard drive etc) and software (web browser, word processor, dialog box, menu bar etc).

You should also know about the security risks you face online, and how to operate safely and securely.

There may once have been a time when you could get away with “Oh, I don’t understand computers.” That time has long since gone.

If you and your staff don’t know this stuff, then it’s your job as manager to make sure they do.

Finally, IT and the Internet changes fast. I know personally that technical solutions I might have recommended only two years ago are now inappropriate. But most non-IT businesses aren’t used to this pace of change, and their knowledge is often out of date. To cope with the faster pace, they need to change the way they operate.

Most importantly, businesses need to adopt a process of continual review and improvement.

OK… where’d all this come from?

Over the years I’ve had various Prussia.Net clients say “I don’t understand computers” as if it’s OK to be ignorant of that aspect of their business. But imagine if someone said “Oh, I don’t understand money,” or “I don’t understand insurance.” You’d wonder why they’re allowed to keep running that business!

I don’t want to brow-beat anyone, but I do want to stress that it’s something no business can ignore.

A business can certainly decide, for example, that they don’t need a computer-based customer relationship management system. But they should know what a CRM system does, at least, and whether it’s the right choice for them.

This is very much a first draft. Comments are more than welcome. My focus is on the smaller end of the small business market — 10 computer-using staff or less — where these issues are often ignored.