Shared Web Hosting Vs. Server Collocation for Online Business

One reason that many people seek to start online businesses is that the cost to get started is very low. Basic web hosting packages can be as low as a few dollars a month. A risk that many online business start ups take, however, is not reevaluating their web hosting strategy as their business grows. Using so-called shared hosting reduces the control that a company has over their site and can later be a problem. The alternative, collocating a server, is more costly but gives a great deal more control and security.

Shared web hosting is what you usually buy when you purchase an inexpensive hosting package. In a shared hosting environment, a single server may be hosting many, many web sites. This can lead to a number of problems. For example, one of those sites may suddenly experience a large increase in traffic. When that happens, less of the server's resources will be available to the other sites on the same machine. This leads to poor performance for your site because another site is using up the resources. There's also the potential for theft of your data and code. While most data center employees are honest, you don't know who's working for your web host and what they're doing. They have administrative access to the server and may decide to snoop around. Additionally, security holes in the other web sites can jeopardize the security of your site.

The alternative to shared hosting is to purchase your own server and have it collocated. Collocation is a term which simply means that you place your server in an ISP's data center. This has a number of advantages. The obvious one is that you have greater control over your site's server environment. You have complete administrative access to the server and can install any software you want. There are no other shared sites potentially causing problems and the employees at the data center have no access to your data. Additionally, you get all these benefits without the expense of building your own data center or acquiring the necessary systems to support hosting your own server.

There are disadvantages as well. Since the ISP will not have access to your server, you'll be responsible for performing system administration. This means you'll need to be familiar with the various software systems needed to run your online business such as email, DNS and web servers. You'll also be responsible for the security of your system. You'll need to make sure you keep your software patched and that your configuration doesn't create any security holes. This is important as many ISPs have clauses in their collocation agreements that allow them to take a server offline without notice in the case of security breaches. You'll also need to perform your own backups. Fortunately, there are a number of excellent online backup services that may do the trick for you such as Mozy and Rsync.

Once your online business start up has moved beyond the initial proving stage, it might be time to consider moving away from a shared hosting solution to collocating your own servers. While this has a number of strong advantages, it does cost more and require more knowledge about managing servers. Failing to plan for future infrastructure is a mistake that many online businesses make. By considering the pros and cons of collocation earlier on, you can be better prepared to grow your online business in the future.