Web-hosting firms defy recession

Firms continue to build new data centers, although at a slower pace than a few years ago

Customer feedback

Cost savings is what prompted Availity to select Savvis as its managed Web-hosting provider in 2008. Previously, the healthcare SaaS provider used IBM's data centers. Availity hosts its application -- which is used by 50,000 healthcare providers -- at Savvis data centers in Dallas and Atlanta.

"It's so critical to be up all the time when you have an Internet-facing portal application like ours," explains Jon McBride, CIO of Availity. "If you look at the cost of building a first-class data center that will be millions of dollars, and that's not our core business or our core strength. We were looking for someone to take care of all the pipes and pings and all that...We would rather spend our resources on our application."

McBride says Availity's 100-person IT shop focuses on adding new features to its software, which has doubled its user base in the last year.

"We do 600 million transactions annually," McBride says. "We need very high uptime and great performance....The other thing we get with Savvis is the ability to have geographic redundancy."

Dave Banks, CTO with Propertyroom.com, says the police auction Web site can handle bursty traffic because it runs on Savvis' cloud computing infrastructure.

"They manage the hardware, they manage the OS, the patching, the firewalls, the load balancing, all the network hardware and the infrastructure for us, and we have our software running on top of it," Banks says.

Banks says Propertyroom.com runs its application on seven virtualized servers at Savvis' Chicago data center. "I've never even seen the servers," he adds.

Doerr says CIOs like Banks and McBride are looking for ways to focus their internal resources on mission-critical applications while offloading rudimentary IT operations.

"Where [CIOs] add value is as a change agent for the business, as they incorporate technology and evolve the business for opportunities provided by technology," Doerr says. "None of that is dependent on how well they operate a data center facility, or operate a server, or patch a server or operate a firewall."

Salesforce.com, for example, is running its entire IT infrastructure on three Equinix data centers, while Bechtel is using Equinix data centers to support its push to a private SaaS model.

Equinix says the main reason companies such as Bechtel and Salesforce chose its data centers is because they are carrier-neutral and allow for reduced latency on applications that run across many networks.

Equinix provides "a network aggregation opportunity for the enterprise," Starr says. "The savings [customers] get by having access to all of these networks under one roof can offset what they are spending with Equinix."

Whether the demand for Web-hosting services is a stop-gap measure for enterprises until the economy recovers or a permanent trend remains to be seen. Web-hosting firms report that once they get an enterprise customer to outsource an application to one of their data centers, the customer tends to off-load more applications and add more managed services over time.

"A CIO running out of data center space will look across the portfolio of applications and take those that are the most modular, most standard, lowest overhead from a risk perspective and move them out of the data center into a relationship with a service provider, freeing up power and space in the primary data center for critical applications," Doerr says. "Once they get experience with a service provider...they reach deeper into the data center" and offload additional applications.

Starr says it's very difficult to take an application out of an Equinix data center and bring it back in-house. "It's a very sticky business model," he adds.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags recessionSaaShostingdata centresequinix

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Carolyn Duffy Marsan

Network World
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?