Let's compare a typical network solution and a hosted network solution

As we all know, having a network setup within your business is often an essential part of the day-to-day operations of a working business. Like all network solutions there are pros and cons to having a hosted solution. Lets Compare both types of network structures and start with the typical network setup shall we...

Typical Network Setup (having servers and handling the maintenance in-house or contracted)

Purchase servers, software, backup devices, any wiring needed for connectivity, ensure any compliance needed for industry specific standards are met, hire or contract someone to install/setup the network, pay for ongoing maintenance of hardware, replace hardware (servers, wiring, Etc.) every three/four/five years, start over at the beginning.

Now that we have all of the necessary ingredients for your network lets calculate the monthly cost for this type of network setup.

Add up the total cost of the servers, oh yea, include the setup fee if one was charged... now divide that number by the estimated number of years you intend to keep the servers before replacing them, now divide that number by twelve (the number of months in a year for those who are wondering why twelve). This number is the total monthly fee for purchasing those servers. Although they may already be paid off either by using your cash flow, this total is still what they cost you every month. If you had to borrow on a line of credit or other type of loan this cost increases due to interest against the borrowed money.

Next, calculate how many workstations you have currently...Got IT? Now, out of that total, how many do you replace every year? Once you have determined how many you replace each year, find the average cost you pay for a workstation and multiple that number by how many you replace each year. By now you should know that the magic number to divide that total by is what... that's right twelve. This is the total average monthly cost for replacing workstations every year.

Alright, almost done I promise... Do you have an in-house IT staff or do you contract, either way this step is simple. Take what you pay your IT Staff every month or what you are paying an IT contractor every month, this is the average monthly expense for maintenance.

Lastly, take all of your backup devices, anti-virus costs and all other related IT expenses for the year and divide that by twelve, this would be your miscellaneous IT expenditures every month. These numbers are quite high in instances where the IT maintenance and ongoing support are where they need to be considering the systems in place.

Now lets get the costs of a hosted network solution

Fist off determine how many users will be on the network. Take this number and multiply it by the monthly fee determined by a Hosted Network Company. This will be your monthly IT expenses, plus any after hours fees that may be charged. In most cases, a hosted network solution provider will not charge for after hours technical support, I'm sure that you can find some out there that do however. Simple yes, but this is just about all you need to do when determining IT costs when having a hosted network solution. This solution also grows as you grow and shrinks when you shrink. The fee for services reflect the amount of users you have, so if things get rough and you have to make some lay offs (not good) the fee decreases. With a typical network setup the maintenance fees or staff salaries stay the same. Although business has slowed a little, the costs still come speeding in not mater your businesses situation.

By the way, go ahead and extend the renewal period on workstations because the resources used on the local machines has decreased in turn saving you more money. Oh, and if one of your workstations craps out, at this point you could even think about using a thin client that costs between $200.00-$400.00 bucks.

Also, there would be no need to add up expenses concerning backups, upgrades, or repairs because you would have no equipment in-house. The hosted solutions provider would take on all of those costs for you, pretty nice of a company to do I think.

This solution typically costs less than the "standard network setup" for many reasons, the most common is because the hosted network solutions provider disperses the costs between hundreds or even thousands of clients, they can afford to always have the latest technology available. So as long as you have a fairly fast and reliable Internet connection (I would even recommend having two separate ISP's run Internet to your location for a backup connection should one fail) the hosted network solution could just save you money and headaches.

Reduce IT expenses, impossible, obtainable

If you're thinking about reducing your IT expenses, consider using an ASP or having your entire business network hosted by an IT firm who specializes is hosted network solutions. This takes the costs associated with renewing your company's servers every three, four, or five years out of the picture, not to mention the IT staff salaries or IT maintenance agreement fee's will seem like a thing of the past producing more dollars in your company's pocket for more important investments.

So, what exactly is ASP and a hosted network solution?

Have you ever read a technology article or listened to a technology show and heard the term ASP? Did this trigger the thought, what the heck is ASP? ASP stands for a number of things; however for the purpose of this blog I am using the translation Application Service Provider.

Now you know what the abbreviation stands for, but what exactly is an ASP? An ASP is any company in the business of hosting or leasing software applications. These Applications run on servers not owned by the company utilizing the services of the ASP Company, but rather running on servers that the ASP Company owns. These servers are often times located in a DATA center which houses numerous servers and utilizes multiple layers of security measures which protect the equipment as well as the software itself. Some of the security measures an ASP company may have protecting the entry into the DATA center are... biometric entry protection, password protected entry alarm system, voice recognition entry, dual entry keys, and numerous security methods. The client (users who use the ASP Company) could decide how to access the applications being hosted. The first step in accessing the applications is to have a fast, reliable internet connection. Since you, the client will be logging in over the internet the fastest connection at the price you are willing to pay would be recommended. Secondly, now it's time to choose how you access the applications via remote virtual desktop or by utilizing Citrix. Citrix is a solution that allows you to access applications without utilizing a virtual desktop or a web browser. Although, the option to utilize a web browser to access applications can still be setup with the use of Citrix.

The virtual desktop environment is just that, a desktop that "opens" on top of the operating systems desktop. That sounds confusing but really it isn’t. Think of it this way, it's like opening up a web browser that looks and acts like a desktop on an operating system. This allows for easy opening of the applications being hosted by the ASP Company. You can open your applications, folders, and files just as though you were working on your local workstation. Once you save your work and log off of the virtual desktop, you will be taken back to your local machine's desktop and applications. Also note that while utilizing a virtual desktop environment you can minimize the virtual desktop and work on the local machine while the virtual desktop is running in the background.

So, now that we have established what an ASP is we can move on to a hosted network solution. A hosted network solution, in my terms is an ASP on steroids. Essentially, a hosted network solution is utilizing a company to host all of the functions of an in-house network solution and reducing the headache associated with such a solution. In other words, host the applications your company is utilizing, handling the security over your DATA/files/applications by providing firewall protection and other security measures, host the e-mail for your company by using an e-mail server, providing e-mail anti-spam and virus protection, providing backup services to backup your DATA/files/e-mail/Etc., allowing remote access to your applications/files/DATA/Etc., and allowing your employees access rights to the DATA/Applications/files/Etc. which are determined by you the client, and anything else related to having an in-house IT solution. Many times a hosted network solution reduces the cost associated with having an in-house IT solution by allowing the client to not purchase any hardware associated with a traditional vertical network solution. This in turn eliminates the need to hire an IT staff or contract an IT firm to maintain the servers, firewalls, anti-spam appliances, and switches, hubs, or routers. A hosted network solution also extends the life of companies workstations since the applications, files, and DATA are being accessed from servers and not the local machine's hard drive.

A misconception regarding a hosted network solution is a loss of control of your businesses network. In actuality you are gaining more control over your network in the sense that you now have a complete IT helpdesk to handle any issues that may arise with your hosted network solution, with a simple e-mail or phone call you can have a user restricted from certain applications/files/e-mail/etc., and the fee for services grows with your company. For instance, with a hosted network solution when you terminate an employee, the fee for service is reduced. With a typical network solution should you terminate an employee, you will still maintain a contract or pay staff wages per the terms agreed with each of these conditions, nothing changes.

The question I leave you with is this… Now that you know what ASP and a hosted network solution are, does this change the way you look at your current IT solution?