Question : Outsourcing vs internal hosting of web server

I'm trying to put together a recommendation of whether to continue to host our company website internally and utilize some sort of failover mechnism or going through a web hosting company and have them handle everything.  A recent hardware failure brought this to management's attention.  We are hosting our web server on a single piece of hardware and it went down, hence, our web server went down and was down for about 2 hours.  Although, this was not during a critical time, i.e. not a lot of business was lost during this timeframe, most (approx 70%) of our business is done through purchases on our web server.  I am new to dealing with web servers and I am not sure which way to go. I've never dealt with microsofts load balancing and clustering as a failover option, but have been told in the past it is fairly easy to implement.  We are a windows 2000 server house (with options to upgrade to 2003 if it will assist)  We are also working on implementing Active Directory up from nt4 soon.   Any suggestions.

Answer : Outsourcing vs internal hosting of web server

I have a writeup that I give out often when someone is considering inhouse versus outsourced servers that goes like this:

You have a number of options:

(1) You can host inhouse
(2) You can host on a shared server
(3) You can host on a dedicated server
(4) You can host on a colocated server

While it may appear 'cost effective' to house inhouse, some of the disadvantages of (1) include:

. You must maintain Hardware
. You must provide all security, redundancy, etc.
. It could be a legal liability if your server is broken into and used to hack or spam other servers.
. If you have ADSL (asynchronous DSL), your download rate is much faster than your outgoing rate, and your hardware will appear very slow.

Let me explain why I usually recommend to recommend to people that they use a dedicated server over an inhouse server - this will help illuminate the problems with inhouse hosting.

A dedicated server solution is similar to a co-located solution where a server sits on another person's network, but for a dedicated server (sometimes known as a managed server), the server hardware is leased to you, and 100% maintained by the data center.  Coloction will provide you with similar features - see the notes at the end.

 A dedicated server will give you:

*  Security.  Dedicated servers are most often located in a locked down facility (your cost: uncertain!)  that specializes only in dedicated servers, and that is monitored 24/7/365 (your cost: sleep, or the cost of employees).  Most likely, only server farm administrators are allowed in the area that houses your server.  The server farm will have hardware and software firewalls in place (your cost: > $300), and will monitor against hackers and other drains of unusual bandwidth (your cost: once again, sleep!)

*  Reliability.  The server farm places each server on a UPS (your cost: $200 - $1000 and up, depending upon the number and quality), may be located on multiple power grids (! I have no idea of the cost!) and often has an emergency power generator in case of power outages (I would expect this to cost $1000 and up, depending upon the size of the generator).

*Bandwidth and Redundancy.  The server farm is located with high speed direct connections  (usually T1, DC3, OC3, etc.) to multiple backbones on the Internet - if one of the main routers at Sprintlink.com goes down, your service is rerouted transparently. (Your cost: it varies, although smaller ISPs that I've talked to that only have 2 or 3  links report monthly  costs of > $10,000).

* Fully outsourced hardware support.  The hardware and network are monitored and maintained by server farm staff (your cost: cost of initial server hardware, support and maintenance contract, plus hourly rates to get things replaced and/or fixed)

*  Scalability.  The server is easily upgraded to meet increased usage needs, from both a software and a hardware point of view. Components often cost less to add (as the server farm will buy in bulk) than it will to add to your own server, not to mention the hours of labor incurred.

If you bought and co-located your own server, you'll still have a rental fee (often similar in price to the dedicated server lease costs).   You also lose the outsourced hardware support advantage, and sometimes there are actually tax advantages to leasing over owning.  Generally, the cost of buying a large pipe to your facility usually cannot be justified, until you are running a facility with a good sized support staff.

I would still recommend colocation over hosting inhouse - you gain most of the advantages of the dedicated server, but be prepared - if your hardware goes down, it will stay down until you fix it!

Finally - you haven't mentioned how sharp your system administration skills are.  The responsibility of having your own server means that you need to keep up on all the latest security patches, and understand fully what you have opened to the internet.  Depending upon your skill set, you might be better off securing good shared hosting that allows you to resell accounts, and leave the security issues to the sys admins at the facility.