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So you’ve decided to take the plunge and start your own small business. While your head is swirling with ideas about the perfect data center you’ll have someday, right now you have to face reality: What do you really need to get running, how much will it cost, how much can you afford, will you be able to run it, and will you need to hire someone? All of these are legitimate questions.

Many small business owners will run out and buy some hardware and try to put it all together. But when they run into problems, they turn to a local IT consultant to fix their issues, which may well become frequent. The other side of the coin offers its own pitfalls as well. Are you willing to trust the Web site of your company to be run somewhere else, by someone you don’t even know? What about your e-mail, or even your file storage? These are some of the things we will be looking at in this blog entry, so that you can make an informed decision and help get your new company off on the right foot.


Web hosting is commonly something businesses use outside companies for. There are many reasons for this, but one of the main reasons is bandwidth. To get significant bandwidth to run a large site dropped into your office can be pricey. Not to mention there can be complicated hardware you have to deal with. While this option is becoming easier with business-class DSL and cable becoming more widespread, these services cannot provide the bandwidth a large site needs to operate, nor can you generally have services for increasing bandwidth dynamically.

Hosting your own Web server, though, is fairly simple. Hardware requirements for a small Web server are fairly low grade for Windows or Linux, even an old desktop will probably suffice. Two of the most popular Web hosting programs (Apache Web Server and Microsoft IIS) are totally free (IIS comes with Windows and Apache is available for both Windows and Linux). One thing you should watch for: IIS in Windows XP Professional is limited to 10 concurrent connections. The version of IIS included in Windows Server 2003 is unlimited in this respect, and Apache has no such requirements. It is hard to see the benefit of hosting your own Web site (unless you have other needs compelling you to buy the needed bandwidth), when you can easily find business-class hosting for under $10 a month.

One thing you will notice with most Web hosting packages is that they include a number of e-mail accounts. E-mail has developed into a business requirement for nearly any company, but what’s the best way to get it? Creating your own e-mail server is again a fairly simple process. The hardware requirements are not much more than a desktop system, but it requires a somewhat significant bit of technical knowledge to get it up and running. One of the main advantages you have is the ability to have an e-mail system that gives you exactly what you need. Shared calendaring, Web and mobile access, and the backup schedule can all be tailored to your exact needs.

That being said, you can always use the free POP3 accounts that come with Web hosting. This is a cheap (free if you buy Web hosting) solution that can generally meet many needs. If you need a more full-featured system, there are now several vendors providing Microsoft Exchange hosting for your company. You can use your own domain name; you will just need to point your DNS MX records to the location the provider tells you to. This solution gives you full access to shared calendaring, Web access (via OWA), mobile access, and generally POP3 and IMAP support. Also, you will usually be provided with 24/7 support, automated backups, and a free copy of Microsoft Outlook for each of your users. Again, if you go this route you will need to pay a monthly per user fee. You can typically find Exchange hosting priced at $10 a mailbox or less.

One new contender in the hosted e-mail service is Google’s Google Apps, including Gmail for your domain . This service has two options. The standard edition service is free. With it you can have your e-mail domain hosted by Google, using its Gmail interface and system. Signing up for this gives your users a 2GB mailbox, a customized URL for sign in, and access to their mail through all of the standard Gmail means (Web, POP3, etc).

If you sign up for the Google Apps Premier Edition, you will be given 10GB mailboxes for your users, a 99.9% uptime guarantee for your e-mail, 24/7 support, the ability to turn off Gmail’s normal ads, and the ability to do conference room and resource scheduling. You will also have full access to Google’s other applications, including docs and spreadsheets. This option costs $50 per user, per year. While this seems substantial, it does break down to only $4.17 a month per user.


There is also another option. Instead of buying your own server and building what you need, you can have your server hosted. You can run your own IIS and Exchange (or Apache and Sendmail) server. Generally, you will be responsible for the installation and configuration, but the actual server itself is the responsibility of someone else, though some providers will configure your server for you also.

Usually with this you will get a service level agreement (SLA) guaranteeing your 99.9% uptime, regular backups, and 24/7 support. Having your own server also gives you the ability to set up a VPN and use it as your user’s file server. And being on the Web, your users will easily be able to access it from anywhere. You can generally find these servers beginning around $100 a month. These are usually a good deal, but be careful. You may be responsible for any software licensing costs for whatever you install on the system.

Comfort level

The final decision will be yours. Are you comfortable with someone else handing your data? Do you feel secure that your outsourcing solution will be there for you when you need them for a restore or just general support? Do you have the technical expertise to do everything you need? If not, will you be able to find someone to help you? What will happen if your hardware fails? How will you migrate to your own servers if you outgrow your outsourcing solutions? All of these and more are questions that you must answer. There are pitfalls and dangers to both options; you just have to choose the one that will be right for your business.

For an in-depth analysis of outsourcing, including benefits and pitfalls, check out the TechRepublic Pro Quick Guide: Effective Outsourcing.