Hosting Services | SERVERS



Analyze the impact of running applications on hosted external servers or doing the opposite and bringing hosted services in-house. With the competitive pressures of on demand services like software-as a-service (SaaS) and cloud computing as well as decreasing infrastructure costs, the cost of hosting services are expected to decline considerably over the next few years. Consider the following cost reduction possibilities relative to hosting services:
  • As outlined in cloud computing, have requirements documented in SLAs with penalty clauses for noncompliance. Renegotiate if there are constant service shortcomings.
  • If allowable in the terms of your contract, renegotiate your contract for lower costs. To realize a lower price, you may need to sign a longer contract, include broader services, have a lower SLA, or use of offshore resources.
  • A strong and close partnership and relationship with your provider is also helpful when renegotiating a win-win solution given your cost reduction goals.
  • Include a clause for annual rate review in order to obtain reductions in market rates.
  • Carefully review baseline volume commitments given a decrease in business volume.
  • Include a business downturn clause in the contract to account for layoffs or the sale of a division.
    Top Tip: Hosting

    "We were able to save a significant amount of money by changing hosting partners. We did this by taking advantage of virtualization, using cloud computing for non-production environments, and restructured the landscape using the QA environment for our disaster recovery environment. We also kept multiple players in the mix to get favorable pricing."
    —Lina Shurslep
    Navarre Corporation


  • There continue to be changes and increased flexibility in how hosting, application, and managed service providers charge for services. For example, some providers are moving to utility-based pricing model with charges per user per month over a three-year period rather than fixed costs over the three-year period. Review options on a regular basis and determine the most cost-effective option given your business needs.

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