Understanding managed hosting
In a managed hosting environment, the service provider leases dedicated services and hardware to the client. The hosting provider is responsible for housing and managing all equipment, while the client accesses the system through the user interface. Essentially, customers are paying for a service rather than a particular technology. As with most buying decisions, the choice to pay for a managed host provider revolves around its ability to increase your business’s profit margins. Before reviewing the financial benefits associated with managed hosting, and explaining how these can serve to increase the profits of your business, let’s review what services are included in most managed hosting packages.
Services included in most managed hosting service agreements
The services included in a provider’s managed hosting package are outlined in their service level agreement and can vary slightly based on which provider you choose. However, there are six generally accepted basic services offered by most providers. These include the following:
- Data backup
- Workload balancing
- Security processing and monitoring
- Software installation and maintenance
- 24/7 on-call technical support
- Disaster recovery procedures and systems
Be sure to carefully read your service level agreement and discuss it with the managed hosting provider before signing up. This will prevent charges for services that are irrelevant to your business and a lack of services that are vital to the day-to-day operation of your business.
Increasing company profits through managed hosting services
The primary way in which managed hosting services serve to increase the profit margin of a company is cost reduction. Most of these services offer businesses a significant reduction in the cost of day-to-day operations of the business’s IT infrastructure. Beyond that, managed hosting services increase profits through increased customer reach and an elite level of security and disaster recovery protection. More information on the six key ways in which managed hosting services can increase the profit margins of a business are reviewed below.
Six ways managed hosting services can increase your company’s profit margins
There are six key ways in which managed hosting services can work with a business to increase profit margins:
- Reduction in capital costs. Since a managed hosting provider owns and manages the hardware and software associated with an elite IT infrastructure, businesses save money on purchasing these expensive items every three to five years. Furthermore, the day-to-day operation, maintenance, and repair of these systems is a financial burden that falls on the provider, rather than your business. Lastly, most managed hosting providers offer a flat monthly rate that allows businesses to better budget and assess growth needs.
- Savings in time. Time is money. The more time your company’s IT department is spending on the maintenance and repair of servers, the less available time your business has for marketing, revenue generation, and sales. Furthermore, keeping up with the latest technological advances in IT applications requires hours of educational classes and training. With a managed hosting provider, your business does not need to spend time on continued learning and technical classes.
- Ease of scalability and company growth. Your infrastructure needs to be able to grow with your business. Sudden increases in business, website traffic, and server needs can be a liability without the ability to easily scale your infrastructure instantly. Managed hosting services provide the needed hardware and software for rapid scaling.
- More support through elite service level agreements. A hosting provider’s service level agreement is crucial to understanding the services you will receive. Managed hosting services offer elite-level agreements that outline all services, fees, and amenities included in the plan. This allows a company to budget, plan accordingly, and predict future needs. All of which save a business money in the end.
- High-level support and disaster recovery processes. Downtime as a result of a manmade or natural disaster can easily spell bankruptcy for a business. A thorough, comprehensive, tested, and effective disaster recovery procedure is complicated and costly to implement in-house. Managed hosting providers save businesses money and increase profits by offering state-of-the-art disaster recovery applications and processes.
- Expertise in the latest technology advances. Managed hosting providers have one job. That is to effectively manage your IT infrastructure. Therefore, they have the time and resources to stay on top of the latest technological advances and report on how they will help grow your business.
How to find a managed hosting provider
To learn more about how a managed hosting provider can increase company profit, contact a local provider to speak with their customer service department. Ask about the specific services they offer, what additional costs (if any) might apply, and how they plan to work with your business to increase your net profit margins.
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