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Online business is booming and there is little doubt that it is the way of the business in the coming years.
In fact, the trend is very clear – in the US alone, the share of online commerce increased by an incredible 44% (amounting to approximately $860B). Given this, it is no surprise that almost every business from retail to groceries to premium goods has either transitioned or in the process of setting up an online component.
Out of many challenges that these businesses face, the short-term and the longer-term viability of the digital storefront is perhaps the most important because of its direct impact on the bottom line. This challenge becomes more serious when we consider that the businesses are in a hurry to go online. In this rush, rash decisions are made and the inline business suffers because of unfortunate decisions.
Consider this – An online store is as good as the hosting solution that powers it. It is the hosting that provides the operational foundations for the business and provides all the resources and support that the business requires to be competitive with the host of other businesses operating in the same industry.
The Challenges of Online Business
There are four core factors that could spell disaster for any online business. All these factors stem from the decision of the hosting solution and thus have a common origin regardless of the seeming difference in the impact of these challenges.
Downtime for an online store is equivalent to the closed doors of the physical stores. Every second the store is down, it remains inaccessible by the shoppers and they will go to the competition. If you want to understand the impact of the downtime, Amazon lost $100M in just 60 minutes of downtime.
Slow Loading Pages
The quality of service lies at the heart of good business. If the pages of the digital storefront load slowly, the potential customers would move away because as the internet wisdom does, you only have a couple of seconds to capture the attention of the visitors in order to convert them into paying customers.
More than anything, online businesses run on trust. Customers give out the most important personal details (home address, DOB, credit card details) to these businesses with the trust that the business has implemented enough security measures to keep everything secure. As such, the security features of the hosting that powers the business websites attain more prominence in the light of almost consistent cyber attacks that target online businesses.
The Costs of Server Management
Servers need attention to make sure things are working as they should. Add in the effort required to keep all software components of the stack updated and secure, and you can estimate the cost of maintaining and securing the server that hosts the business websites. That’s why server admins are among the highest paid professionals in the IT industry.
Now, where do businesses go wrong?
Many first-timers (and inexperienced) managers opt for shared hosting because of the low costs and the tall claims made in the ads. As a result, when the website goes offline or worse gets hacked, they realize the enormity of the situation.
How Traditional shared hosting and Managed Hosting Stack Up?
To help you understand the gravity of the decision, I will now briefly go into a comparison of traditional shared hosting and managed hosting solutions. I will use the decision factors that businesses actually face when running an online business
In a shared hosting environment, several websites share the resources of a server. As a result, as the website demands server performance because of the increasing number of visitors, the server is unable to keep up. As a result, the website crashes and takes the business down.
In contrast, a managed hosting solution is able to deliver the resources as the website needs them because of the ability to scale up server resources. In effect, the solution grows with the business and actually keeps up (in some cases, moving ahead) with the demands of the growing businesses.
Since the websites hosted on the shared server “share” everything, the security of all websites is also a shared concern. As such, if one website gets compromised, the cascading security breach means every other website gets compromised.
On a managed hosting solution, security is implemented as part of the overall solution. These security measures include IDS and anti-malware components. Additionally, each website is deployed in isolation so that even in the rare case of a website getting compromised, the impact is minimized to that particular website only.
At the first glance, shared hosting is more budget-friendly with a price tag that is a fit for all businesses. On the other hand, the cost of managed hosting is almost double. However, in my opinion, managed hosting is still a great bargain because of the time and resources saved on server management and security. With shared hosting, you could potentially end up with a loss in case of slow speed or downtime.
Shared hosting solutions offer a bare-minimum server monitoring feature that provides only the most basic information at best. As a result, website owners get blindsided when server resources run out without any prior knowledge.
Managed hosting solutions come with either native or third-party server monitoring tools that provide detailed information on server health and performance. These tools could even raise alarm if the server resources fall down a preset threshold. This means continued business operations because website owners have a fair warning on when the server resources could run out.
Support for Business Applications
Shared hosting provides a bare-bones solution for hosting your business applications. This means that aside from the HTML and CSS of the website, there isn’t much you can do with it.
Typically, a business needs a CRM and an email hosting solution to make sure all parts of the business are in sync. Very few shared hosting solutions (if any) allow deployment of these applications and you can imagine the impact of these solutions on the continuation of the business operations.
Why is Managed Hosting the right fit for online businesses?
I hope that by now you have a clear idea of why shared hosting solutions are bad for your online business. However, if you need more convincing on why managed hosting solutions are a great fit for your business, here are six factors that should factor in your decision.
Focus on Business Objectives Only
Managed hosting for PHP and other apps allows the business managers to focus on the business objectives because the solution provider takes care of the hosting-related issues and makes sure that the business websites keep on ticking. As a result, the managers do not have to worry about technical issues and could devote more time to achieving business milestones.
The ability to scale server resources (RAM, Storage, Bandwidth, and Processing Capacity) allows online businesses, particularly ecommerce stores to make the best of Sale Season(s).
Managed hosting solutions allow for automated or manual scalable server resources so that as the traffic spikes and the number of users increase the number of requests hitting the server, the server is able to accommodate these resources. For the business, this means that every customer is served, thereby increasing the brand’s reputation.
Once the season comes to an end, the server resources can be easily scaled back to make sure that the business does not have to pay for the increased server resources throughout the year.
Server security is an ongoing effort that requires a dedicated team. Not many businesses can afford to find money (and time) to set up a server security component. Managed hosting solutions offer multiple layers of security with outward-facing firewalls and IDS.
Many managed solutions also offer secure connections with IP whitelists and password-protected connections. Two-factor Authentication (TFA) secures all accounts so that only the users with proper credentials could access the accounts.
Even with the best of intentions, disasters could still strike and business websites could go down. During this crisis, backups are the only way out. In many cases, managed hosting solutions offer on-demand and automated backup options (at application and optionally at the server level). These backups are used to restore the application and database data to make sure that the business continues without major disruption.
Costs of Operations
At the first glance, the cost of managed hosting solutions might appear to be on the higher side. However, if you factor in the cost of additional server resources, the cost of securing the server, and the cost of managing the server on a daily basis, you could have a clear idea of the long-term benefit of managed hosting solutions.
This is even true for dedicated hosting options that require a sysadmin (often a server management team headed by a system administrator) to keep everything functioning. This option is only utilized by businesses that have the need and the budget for such an expensive solution. A managed cloud hosting solution delivers the best of both a shared and dedicated hosting solution at a fraction of operational costs.
Room to Grow and Expand
With traditional shared hosting, the only way of expanding the hosting solution is to abandon the current option and reinstall everything at a server with higher specifications. This is a very risky move that could mean a serious business risk of the website going offline for hours.
With a managed cloud hosting solution, the ability to scale server resources and the ease of setting up server clones means that the business has enough room to grow without compromising on the performance and flexibility of the hosting solution.
Managed cloud hosting solutions offer the flexibility and performance that are missing in shared hosting solutions. With the host of features such as the ability to scale server resources when the need arises, the automated and on-demand backup and restore, and the balanced operational costs, this class of hosting solutions is perhaps the best option for business websites that receive hundreds of visitors an hour.