Next Generation IT affordable for the SME

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21st century enterprises information technology is no doubt a strategic part of their business, both for large multinational organizations as for smaller companies such as SMEs. There are indeed different possibilities to fulfil this need, such as maintaining an own data center or taking advantage of the possibilities offered by co-location, hosting and cloud computing providers.

In our experience, owned IT infrastructures, both allocating them in own space as in from a specialized co-location provider rented space, are the most expensive and probably only available to large companies with a substantial budget and qualified IT staff dedicated to keep up and run them at all levels.

Even being the more expensive option, it’s still the most common one in large companies whose IT departments have always worked that way and, possibly due to the sense of security that may be gained by knowing the exact location of the servers which contain the companies data, connecting them personally and even periodically visiting all the infrastructure, make them yet refuse to move their systems to a hosting provider or even to explore cloud computing.

The transition that is already going on is the relocation of the technological infrastructure from a company owned space to a rented one, often in Madrid or Barcelona in the case of Spanish companies, taking advantage in terms of connectivity and fault tolerance offered by buildings and co-location companies fully dedicated to this purpose.

When a company decides to outsource the location of their IT systems to a co-location provider they have to choose between two types of data centers, those associated with communication operators or manufacturers, such as Telefonica or Ono and those data centers known as neutral ones, such as Globalswitch, Interxion, Terremark or Cogent. In the second case it would be usually easier to get connectivity with multiple carriers and absolute independence of the equipment manufacturer.

Data Center of choice

Co-location service costs depend on space required. Starting at €50 per month you will become allocated one rack space unit and can then rent up to complete racks that could cost between €500 and €1,000 per month depending on the co-location provider. There usually are other costs associated to the connectivity and often to the power consumption, and you must buy the servers and all other equipment needed.

Regarding the SMEs, many of them may not have been able to afford to invest their limited resources in large IT infrastructures, neither housed in their companies own space nor by hiring a co-location provider nor to have the professionals needed to exploit them. In this case, their IT systems may render insufficient for their real needs, with poor redundancy and backup levels and almost non-existent disaster recovery threatening their business continuity in the event of an incident as likely to happen as an electrical overload or a broken water pipe.

Today there are real alternatives to IT co-location at bargain compared to what was usual, enabling not only large companies to benefit from them but also SMEs. The cost of a hosted server, in many cases, is even comparable to what only the consumed power would cost. Nowadays next-generation IT infrastructure can be deployed at a cost affordable by any SME.

Large companies also benefit of the lower IT costs by hosting them, including the server and the hosting space, communications, power and cooling, and may pay the same as they paid so far only for the co-location, that in most cases only includes the needed space, having to invest a significant amount of both, financial and technical resources, in the acquisition and initial server provisioning.

At this point, hosting presents itself as practical and profitable for everyone. Now the question is which hosting providers are offering the best performance at the best price. In this regard we would talk about our own experience, which is obviously particular to The Xipalia Group, but which we believe might be helpful to take the right decision in similar situations.

The Xipalia Group uses hosting services to host its entire IT infrastructure since its inception. In our case we decided for OVH which at that time seemed to be the best option. Currently we have only a small infrastructure but we can still highlight the excellent performance of OVH, keeping in mind that it is mainly oriented to IT professionals with skills and enough knowledge to manage their own servers at the best prices on the market.

However, much to our regret, from mid- September until still today, OVH does not allow to hire new dedicated servers online, especially on their European sites, due to a rethinking of their business strategy focused on reducing what they call turnover, which comes to be the trend of their customers to renew their servers with the upcoming range each time they were made available and apparently impacting so adequate return on investments OVH has done in the past.

Waiting for OVH to resolve this situation and excited to see what their new business strategy in the future will be, we have begun to explore alternatives that could offer the same performance at similar prices. Note that OVH prices have been unbeatable so far. However, at the current OVHs situation, we must have viable alternatives.

Some of these alternatives, which have even been commented on in the OVH forums, could be online.net, hetzner.de or server4you.net. Prices are similar, starting at around €10 a month for a lower range virtual server, going through mid-range dedicated servers for €50 up to even managed dedicated high-end servers with prices from €100 to €300 per month. The best alternative to OVH, in our humble opinion, is currently the one offered by Server4You.

Now it’s your turn. ¿What kind of IT infrastructure is being used in your company and what do you plan for the future?

Posted in Information Technology