A few years ago there was no doubt: if the company needed some software, it also needed a server for running it. You needed to arrange backup and make someone keep an eye on the server, to be sure that it stayed up and running. And then you needed your own staff or consultants for regular upgrades of and service on the solution. A few solutions were sold as centrally hosted solutions that you could get a terminal for – a concept, which now seems more or less phased out and replaced by web-based solutions.
Today, software is often web-based, often bought as a hosted solution where you do not need at all to think about servers. And a large part of the software that is not hosted will anyway be placed on a server “in the cloud”. By that, you get rid of a large part of the burden that comes with maintaining your own server park. But still…
It is obvious that it means something in which building the hosting provider has placed their server center and if there, for instance, is a mirrored center at a different address, so that your business can continue in the case of a fire or other major disturbances. It also means something how skilled the provider’s staff is. And all the usual things around economy, reputation, etc. that you would look at when considering any other providers, also means something here. But particularly for the product categories offered by hosting providers some terms and habits are ruling, which might come as a surprise for many customers.
The simplest way of placing software in the cloud is the good old web hotel. We are used to that because it first appeared at about the time where companies showed an emerging interest in having a website. And it is clever! It is, because you, like in a real hotel, don’t need a key for the front door and you get rid of a large part of the common administration – there are always some skilled people around to ensure that the server is on, that there is a connection to the surrounding world, etc. and that the operating system is updated. On the other hand you, as a customer, do not have much influence – things are like they are. And the web hotel can usually do one thing only: run a website.
Using a web hotel is usually cheaper, and often actually considerably cheaper, than having your own web server. When you have such one you need to pay out a salary to an administrator who, in principle, easily could administer a whole bunch of servers simultaneously, and so there are advantages of large scale operation at the web hotel. But something else is that when you operate it yourself, there will be times of the day, the week, the year where the server is doing almost nothing. A B2B company, whose customers are checking the website during office hours, is basically just wasting the electricity for the rest of the time. And the hardware is getting old without doing anything for maybe 2/3 of the time. That is not very economical and thus the web hotel can, by hosting many different websites directed towards different visitors, make better use of the platform – which effectively results in lower prices.
Besides, smart people have though of something… if each web server needs about 1 GB of memory for running well most of the time but maybe 16 GB during peak operation, then you will be wasting 15 GB most of the time. Those could just as well be utilised by other websites. And this way you can place many websites, each needing maybe max. 16 GB, on the same 16 GB of physical memory. This is called over-provisioning and is a big advantage, from an economical point of view. A similar advantage lies in the fact that even if each website has maybe 10 GB of disk space, it is actually using only part of that, on average maybe a fourth – so you can sell the unused disk space again to a new web hotel. and so on with the other resources.
Over-provisioning comes with the principal risk that more websites at the same time could be at peak loads and therefore need more resources than the hotel has.
Obviously, the cheapest web hotels are using a more aggressive over-provisioning strategy where many websites share the same hardware, the same connection to the internet, etc., while the more expensive web hotels has the economical potential for over-provisioning less, and by that ensure a reduced risk.
As with a real hotel, there can be differences in the service level, where the most expensive hotels can offer almost any service for the guest, which on the other hand costs some money. The cheapest may only be able to deliver the most basic services.
The geography also means something because even though the internet certainly is weaving a web of the world, there are some connections that are better than others and typically a server close to the users will be preferable. That is, as a Danish company having most of its customers in the USA, it might be clever to use a web hotel in the USA. But quite many Danish websites are actually hosted on servers abroad so this is probably not a major problem – only when having special requirements for performance or when thinking that one can just as well go for the best possible solution. You should, however, be careful with the most extreme setups where, for instance, a web hotel for Danish visitors is hosted in Australia. The geography can, btw., have an influence on the price level for all the usual reasons, such as local salary level, electricity price, requirements from authorities, etc. and therefore otherwise identical web hotels can have different prices depending on where they are situated.
VPS – Virtual Private Server
This is in principle the same idea as a web hotel since you get rid of the need for monitoring the hardware, but you do get something that looks very much like your own server. Thus, you can log in as an administrator and install all kinds of programs. A VPS will typically have either Linux or Windows Server as the operating system and you can do everything that you could have done on your own server.
Sometimes there can be additional services added, such as a control panel by which you, for instance, can install the operating system, make a backup, and much more. You might say that this corresponds to the option you would otherwise have with your own server to stand next to it and do things from the outside. Without the control panel, you are restricted to the tasks that can be done “from within”, as an administrator of an installed server.
A VPS is sold in the same way as many web hotels with a specified amount of memory, disk space, etc. and in a similar way it will usually be over-provisioned. So here as well you will see big differences in price – the more over-provisioning, the cheaper it can get. Thus, you really cannot expect that the bought resources are simply waiting for you to utilise them, unless the provider specifically has guaranteed this.
And like with web hotels and everything else on the internet, geography of the VPS in relation to the users means something for the speed.
A VPS is particularly useful for running software that is not typical website software and therefore isn’t available through a web hotel, or when you wish to have more control of the server, for instance with regards to installing security certificates of your own choice, adjust parameters such as the amount of memory available to PHP, or many other things. It can be interesting as well in situations where you wish to run several programs together on the same server.
Part of the service is out of the customer’s control, like for instance the assignment of IP addresses to the VPS. Sometimes there is only a virtual address, at other times there is exactly one permanent address. If you need more, for instance for installing an SSL certificate, you must make sure that provider can deliver it.
A good example of software that can be run on a VPS is Bitrix24 BizPace Enterprise – a system for collaboration, CRM, social intranet, and a lot more – which in the self-hosted editions offers more functionality and more control of, e.g., appearance and setup than the hosted editions like Bitrix24 Professional. The latter, on the other hand, excel by exactly being easier to administer. A VPS with your own software instead of a hosted solution is, thus, often a question of getting more options by accepting more administration.
Where a VPS is typically just “a slice”, i.e. a virtual slice of a large and well equipped server running several VPS’es, a dedicated server is on the contrary a physical server, placed as an individual unit in the data server center, with all the advantages and disadvantages this brings. The advantages include that you with certainty have some defined resources available and that there are people around to switch on the server if it went down, along with other similar services. The disadvantage, on the other hand, is that you as a customer must do more to administer the server and, as a purely economical consideration, that there is no shared economy in this concept – when the server is off load, you are wasting its resources, just as you would if you had your own server placed at home.
The concept is attractive in those situations where you cannot live with sharing resources with others – maybe you have a highly variating need for resources for tasks that are so important, that you do not want to risk running into the consequences of other customers’ peak loads. In such situations, maybe you could have had the server at home, but if you do not have the needed personnel, infrastructure, etc it can be beneficial to have it at a hosting provider. And if you need it for a limited period only, it will most likely get cheaper than buying a server. The savings from big scale operations are, however, limited, so measured on monthly operating costs, the price level of such a solution will often be similar to that of running your own server.
For the providers, this server type is attractive to sell because they can avoid part of the support connected with, for instance, a web hotel or a VPS and, additionally, the server can be re-used for other customers or perhaps included in the server part for the web hotel, should you decide to quit the agreement.
Perhaps you have a very special hardware configuration that cannot be rented from any hosting provider, but since you already have the server, then how about simply moving it to a place where someone can keep an eye on it in cooled and fireproof facilities with reduntant power supply and solid connections to the internet? This is what colocation is about. You get rid of the need for having your own server room but you can still have your own server with its individual specifications. This is, for instance, interesting when you have old systems and servers to be phased out in connection with the introduction of new ones.
It is often possible to buy a server through the hosting provider. This means that you get a dedicated server that you own – and possibly on a payment plan. The economy in this arrangement can be better than a model where you rent the server and in addition, you can take it home when it has been fully paid for. Even if you own the server, you naturally pay for having it in the server center.
A colocated server is the one of the hosted server types that has the lesser degree of shared economy and is, therefore, also generally the most expensive type to have. Additionally, there is of course also the risk that it breaks and needs spare parts and other costs along the way.
Some providers are offering products like a WordPress server or similar, where the server typically is comparable to a web hotel, only directed towards a particular purpose. This can be attractive for both the provider and the customer – the provider do not need to make a lot of other services available that would need maintenance even if they are not being utilised by this customer. And the customer gets a service that is targeted to the need, thereby not having to neither pay for some other service options that would not be needed anyway, nor having the trouble handling some of the administrative setting, as these are already set to fit the purpose.
Win-win in most cases, but you still face the risk that over-provisioning could lead to poor performance in peak load periods, and, therefore, you should choose the quality in correspondence with the purpose.
It has become common for hosting providers to actually not having their own server centers but instead rent the resources. The smallest setup of this kind can be bough for a couple of hundred kroner per month, for which you can rent a small VPS or a so-called reseller web hotel, which is equipped with software through which you can sell web hotels and VPS’es to your own customers – who will then share the resources of the rented server. In principle this can happen through several levels – where a provider has bought a VPS, sold part of it to a customer who again sells part of that to his customer.
It is very common, actually, and also some of the largest providers of web hotels run on servers they have rented themselves from large server centers. Besides, there are quite a lot of optimistic companies who in this way have established a modest web hotel business that may be expanded later.
Actually it is a good thing, since it gathers a large part of server operations in professional environments where care can be taken of the practical problems with the operations itself, and where also thoughts can be made on environmental issues, data safety, etc. that a small server center may find it difficult to pay for. On the other hand, it is clear that it does not improve performance to run several virtual servers inside of each other, so it is generally recommended that you as a customer take a look at how many levels are in play – especially if performance is an important parameter.
A variation of this theme is often seen at web agencies, offering to create and operate websites for their customers. As a customer this is attractive because you fully get rid of the problems around developing and operating the site, and for the agency it is attractive because it gives a steady income along with good preconditions for keeping the site fit. But typically, such sites will be created in a reseller web hotel, and as such reside inside of several virtual environments. Not necessarily a problem but still worth considering.