Hosted Hosting: Should Service Providers Go Hosted?

By Author: AXIGEN Team
Total Articles: 18
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Service Provider Hosting Is Possible
The simple concept of hosted services, already known and widely used for enterprise environments for quite some time, represents the perfect solution for a great number of small and medium sized companies that require a safe and reasonably priced platform. Applying the same concept at a higher level could result in Hosting and Service Providers leasing or renting virtual real-estate for the services they provide in order to lower their initial investments or subsequent upgrade costs.

Hosted hosting could bring the advantages that hosted services usually create for enterprises to SPs' own tier and optimize their resource usage to the maximum extent possible. This also goes to prove there is a need for a new breed of hosting services, especially aimed at large SPs requiring large storage and server farms. Moreover, hosted hosting would improve the overall service quality since those companies hosting Service Providers would only have to manage the platform, leaving the service to the provider.

This increase in quality will very much appeal to the customer or subscriber base, ...
... as no one can ever turn down a better deal for the same price. What's more important, even services on offer could get a lot cheaper as the SP would only pay a fraction of the cost each month and only for the resources it requires, changing its subscription plan based on the usage rates of its services.

What if Something Goes Wrong?
Like any solution, the hosted hosting concept is obviously not bullet-proof. So, besides benefits, there must also be some down-sides that need to be considered. However, since it is not a very commonly used method throughout the industry, we do not have any real-life examples on which to base our conclusions at first glance. To find out what these drawbacks might be and where trouble might be waiting for us, we will turn yet again to the already treaded path of enterprise hosting.

The main issues with enterprise hosting are the result of inefficient business partnerships. This is the single, most important factor to take into account when moving a service to a hosted platform. This is where service level agreements (SLAs) come in and uptime rates divert growing businesses to an uncontrollable downward spiral. With hosted hosting services, part of these issues will be inherently overcome because the responsibility of the platform provider will be to manage their own platform only and thus reduce complexity. On the other hand, a side-effect makes its way into the equation: the service uptime rates will have to be much closer to 100% than for current hosting.

To provide end-users and customers with a 99.97% uptime SLA, the Service Provider must have an SLA with the service hosting partner of roughly 99.9985% or more (note the four decimals). This requirement will make most decision-makers very wary and cautious about the companies that they do business with. A clean failure record and satisfied customer base will become just the tip of the iceberg in this new paradigm of hosted services.

Conclusions
For the SP market, the future is here. The hosted hosting concept will most likely pick up incredible momentum in the following years as it creates a vast array of opportunities for all players and can even allow some of them to make up for a slow start in the past.

For further details on this new hosting paradigm, a head-to-head comparison of the pros and cons of licensed and hosted services models, or a pertinent analysis of the factors that providers should weigh in when trying to select a stable and trustworthy business partner to host their messaging services, we also invite you to check out the highly-informative AXIGEN webinar on Hosted Email Hosting, at: http://www.axigen.com/webinars/hosted-hosting_19/