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Mike Drach, theWHIR.com
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August 16, 2001 — (WEB HOST INDUSTRY REVIEW) — By hosting their Web sites and technology infrastructures internally, over one-third of U.S. businesses are overlooking a chance to save 30 to 40 percent on their costs, according to a study released by Jupiter Media Metrix (jmm.com) on Wednesday. Over the next three years, these costs could add up to between US$6 million to $12 million.
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“Companies that continue to host their own sites will gain little
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competitive advantage and spend more money on staffing and technology than
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those that outsource these functions,” said Jupiter research director David
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Taylor. “Those that act and act now will be saving millions in the long
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run.”
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The most highly trafficked sites stand to derive the greatest savings from
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outsourcing hosting responsibilities, according to the report. For
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instance, analysts found that an in-house staff of 18 to 25 costs over three
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times as much per yea, while management tools and expenses run an additional
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$2million over a three-year period. In addition, recurring costs such as
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bandwidth, co-location services and vendor management can easily add more
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than $1 million dollars in costs during the same period.
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Jupiter predicts that an increasing number of business will choose to
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outsource their hosting needs over the next three years, as the available
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savings become more apparent. Currently, some executives have been slow to
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make these changes because of concerns over security and control issues, as
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well as poor customer service by outside vendors.
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Along with these findings, Jupiter also reported that over 80 percent of
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companies undertake Web development projects before their site hosting and
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technology infrastructure design is built. According to Jupiter analysts,
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nine out of ten of these ventures will face some form of avoidable
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rebuilding as a result.
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“Companies engaged in Web development projects must select a technology
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infrastructure provider simultaneously with an application developer,” said
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Jupiter. “Doing so will cut implementation delays by 25 to 30 percent by
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eliminating wasted development time.”
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The report advised companies to consider a range of criteria when choosing a
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hosting provider, including reliability, scalability, security, proven
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success, accountability, response speed and customer service.
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Additional key findings will be presented in full at the Jupiter Web
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Enterprise Forum on September 12-13, in San Francisco. The forum will
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examine the planning, development, and management problems affecting all
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businesses that embrace Internet technologies. For more information, see
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Jupiter’s Web site.
