| Web hosting in one of its various guises
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| | a rule of thumb, according to Paulak, a
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| should be considered by any enterprise
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| | business-class hosting service with
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| embarking on e-business. The potential
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| | management will cost between [pound]100
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| for cost savings and benefits through
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| | and [pound]400 per user per month,
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| reaching customers and coming to market
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| | depending on location and level of
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| faster is huge, but there are also great
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| | sophistication, with the average being
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| risks. The principal danger is of
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| | around [pound]200. A typical Web server
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| choosing a Web hosting provider that is
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| | can handle 50 users and 12 such servers
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| either unsuitable -- perhaps being unable
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| | can be accommodated in a rack occupying
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| to deliver the level of service you
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| | nine square feet in a room. This equates
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| require -- or worse, about to go bust.
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| | to about [pound]10,000 per server per
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| The dangers of the latter were
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| | month, or [pound]120,000 per rack per
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| demonstrated by the high-profile agonies
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| | month. Dividing by the nine square feet,
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| suffered last year by PSInet, the company
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| | this comes to about [pound]13,500 per
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| previously touted as the "Internet
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| | square foot per month, which is a good
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| super-carrier", which is now threatened
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| | 100-fold increase on what can be earned
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| with bankruptcy. The problem with the Web
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| | with co-location.
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| hosting business is that to make it
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| | The result is that dedicated services are
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| viable, major investment has to be made
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| | that much more expensive for customers,
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| up-front in data centres, staff and
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| | but when you put into the equation the
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| network infrastructure, in the hope that
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| | cost of managing the facility and
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| the customers will then come flocking in.
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| | acquiring the necessary in-house IT
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| Although rapid growth in Internet use
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| | skills, it may look more attractive. For
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| continued through 2000 despite the
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| | a mid-sized company with 100 users, the
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| dot-com debacle, PSInet suffered because
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| | cost of a dedicated Web hosting service
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| it was over-ambitious in its projections
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| | would be [pound]240,000 per year on this
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| and a little ahead of its time. Caroline
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| | basis.
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| Bryan, Web hosting analyst at
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| | So despite these costs, there is a strong
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| Datamonitor, says, "It over-reached
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| | swing in demand from co-location towards
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| itself and sunk too much money into its
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| | dedicated services, according to Sethna.
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| IP network and datacentres, while the
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| | But because of the huge cost
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| services did not take off quite as
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| | differential, a number of larger
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| expected,"
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| | enterprises that already have most of the
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| This showed that size alone is no
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| | human resources needed to run a Web site
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| guarantee of success in the Internet
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| | will at least start off with co-location
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| service business, so the question is how
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| | to test the waters. To cater for this,
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| can a potential Web hosting customer make
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| | many business sector ISPs, such as UUnet,
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| sure it is entrusting its Internet shop
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| | will continue to offer co-location
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| window to the right provider. After all,
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| | services for the foreseeable future,
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| in the case of full outsourced Web
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| | almost as loss leaders to lure customers
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| hosting, an enterprise might be relying
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| | into their Aladdin's cave of more
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| on the service provider to collect a
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| | lucrative services. As Bryan notes, "Web
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| sizeable proportion of its revenue
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| | site hosting is one of the first things
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| through e-commerce, as well as to deal
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| | that a company is quite willing to
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| with customers.
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| | outsource."
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| According to Bryan, hosting companies
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| | Dedicated services
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| that have spun off from some existing
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| | Basic co-location is technically far
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| large players in telecommunications or
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| | easier to provide and is more of a
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| systems integration are better placed,
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| | vanilla service, with fewer differences
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| because they have independent revenue
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| | between the contenders. But when it comes
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| streams and so rely less heavily on the
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| | to dedicated services, some providers are
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| goodwill and patience of their financial
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| | more capable than others, both in their
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| backers. The best UK example is BT
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| | ability to offer the high levels of
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| Ignite, said Bryan, which although still
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| | availability needed for e-commerce and in
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| losing money overall has a huge existing
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| | the range of options offered. BT Ignite,
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| network infrastructure it can call on, as
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| | for example, can now go beyond full
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| well as BT's IT solutions business
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| | outsourcing of IT to embrace customer
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| Syncordia and its outsourcing company
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| | relationship management (CRM), "In this
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| Syntegra.
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| | way we can provide not just the
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| This point is echoed by other analysts,
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| | technology but surrounding services to
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| such as consultant and analyst Ovum's
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| | get a company to market quickly," says
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| ISP-watcher Henning Dransfeld. "ISPs with
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| | Sethna.
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| a telco background can leverage their
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| | This could appeal not just to end
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| telecom network and are in a good
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| | customers but also to aspiring
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| position to offer good quality of
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| | application service providers (ASPs)
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| service," he says. This includes not only
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| | which might have a sound proposition but
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| the big incumbent carriers such as BT,
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| | not be geared up to handle CRM issues on
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| but also the likes of NTL with cable TV
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| | behalf of its own customers. "So we are
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| networks and in future others exploiting
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| | packaging this as a wholesale ASP
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| the unbundled local loop.
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| | offering," says Sethna.
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| It can be argued that BT has over-reached
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| | Some of the value-added services that a
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| itself with the huge investment in 3G
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| | large player can bring embrace both IT
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| mobile networks on which there will be no
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| | and surrounding business issues. One is
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| immediate return. There is also the
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| | Web caching, which is particularly
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| little matter of the $1.25bn
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| | important for international
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| ([pound]8.5bn) it is spending jointly
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| | multinationals, where a global enterprise
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| with US telecoms giant AT&T over three
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| | might want localised content located
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| years in setting up the global network of
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| | close to the relevant customers for
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| at least 44 data centres for the Ignite
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| | performance reasons. This in tarn
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| Web hosting services. But the principal
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| | requires the hosting company to have at
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| risk is of takeover rather than collapse,
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| | least a satellite data centre in each
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| with hopefully less disruption to the
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| | country in which they operate.
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| hosting.
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| | But before getting carried away with
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| In any case, at least according to BT
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| | value-added options, users should
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| Ignite's vice-president of sales and
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| | evaluate the ability of hosting companies
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| marketing Perses Sethna, the company is
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| | to deliver maximum availability, says
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| on target to start making money on Web
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| | Worldport's vice-president of sales and
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| hosting by 2003. Some of the individual
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| | marketing Frazer Hamilton.
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| country businesses making up BT Ignite
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| | This cannot be achieved through resilient
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| are already profitable, for example I.net
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| | hardware and communications alone, but
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| in Italy, which recently had a successful
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| | requires attention to the operating
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| initial public offering with BT retaining
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| | systems and applications as well. "For
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| a 50.8% stake. But other Ignite
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| | this reason we do not use a standard
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| businesses, including the UK operation,
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| | operating system," says Hamilton. "We
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| are still making significant losses.
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| | harden the operating system to make it
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| Expansion
| |
| | more secure, and also the applications."
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| The Web hosting story began in the US
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| | The essence here is to close unnecessary
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| with basic co-location services and has
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| | routes into the system that a hacker
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| since expanded into more managed
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| | could exploit, using similar principles
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| offerings, including up to full
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| | to those applied to military-grade
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| outsourcing and application provision.
| |
| | software development. Now with large Web
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| There is now a broad spectrum of services
| |
| | site hosting, there is a growing need for
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| on offer, but most analysts assign these
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| | such hardened software in the commercial
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| to just three categories.
| |
| | sector.
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| For this reason, others such as Worldport
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| | Another pressing need in Web hosting is
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| only provide dedicated services. Few if
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| | better support for peering arrangements
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| any ISPs in the hosting business want to
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| | between providers. Progress is being made
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| confine themselves purely to co-location
| |
| | in basic connectivity to create faster
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| because, as research director
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| | transmission with better quality of
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| specialising in ISP issues at the Gartner
| |
| | service along end-to-end paths through
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| Group Eric Paulak points out, it delivers
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| | the Internet, traversing the domains of
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| a relatively poor return per unit of
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| | multiple service providers. But what is
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| space and in locations such as the City
| |
| | lacking is the ability to retain
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| of London, where property is expensive,
| |
| | information about content during such
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| it is only just viable.
| |
| | multi-ISP transmission.
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| Matching hosting providers to these
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| | "We think new content peering
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| categories is easier said than done, as
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| | arrangements are needed to drive the
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| suppliers are reluctant to admit that
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| | industry forward," says Sethna. "We want
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| they are only in the co-location arena,
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| | to be able to swap content across the
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| even if that is all they are capable of
| |
| | network and retain the intelligence and
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| providing. BT Ignite addresses the entire
| |
| | functionality so that, for example,
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| spectrum, but Sethna admits cheerfully
| |
| | information on the consumer is passed
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| that all their marketing effort is
| |
| | back to the source. Then an advertiser
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| pitched at dedicated hosting because that
| |
| | might be able to have granular
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| is where the most money is to be made.
| |
| | information of who is looking at their
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| "If you look at the pricing for basic
| |
| | content."
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| co-location within the UK, it works out
| |
| | This may raise privacy issues, but that
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| at about [epsilon]100 ([pound]65) per
| |
| | is another story. Without doubt though
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| square foot," says Paulak. This figure
| |
| | the next chapter in the hosting saga will
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| can be increased by perhaps 25% by
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| | address the content distribution
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| offering some additional management, for
| |
| | question.
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| example of the IP routers, but pales into
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| | Submitted by - for help on all your
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| insignificance when compared to the
| |
| | hosting needs.
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| pickings that can be made with dedicated
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| | Article may be republished if this
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| services.
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| | portion is not removed.
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| The gulf is not difficult to estimate, As
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| |
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