Q&A with Peter Kay

A reader asks: We’ve got a growing online sales channel and are considering what to do for our next steps in growth. Should we consider hosting our own Web server?

You ask a good question that underscores a powerful trend in IT (Information Technology), and that is outsourced computing. The traditional way of automating business processes was to buy software and hardware and connect it to your network. With outsourced computing, you simply connect to a service over your high-speed Internet connection. There is no hardware or software to buy.

To answer your question, it is better, faster and cheaper for you to procure a hosting service as opposed to buying a server and doing the hosting yourself. In addition to the cost issue, you face additional security risks. Web servers are designed for public access, so, by bringing yours in-house, you invite thousands of potential hackers right to your front door.

Let’s talk more about the benefits of outsourced computing, which also apply to your hosting question. First, you don’t need to purchase or upgrade any hardware. Most companies do not fully utilize new hardware efficiently and, with its two-year depreciation, rarely get the full value from the investment. Second, there is no software to maintain, upgrade or patch. Ongoing software maintenance is a fact of life in IT and requires consistent care and feeding. Outsourced computing frees you from this overhead. Third, there is no installation lag time, because there is no hardware or software to install. You just connect and go.

My advice is to not only outsource your hosting, but to also examine outsourcing other computing tasks as well. For example, Quickbooks now offers “Online Accounting;” salesforce.com lets you automate your sales force; and netledger.com is a complete suite covering sales, accounting, HR and a Web site. All of these applications are online, available 24/7 and can be had for just a small monthly fee.

The office network of the near future will have a high-speed Internet connection, good network design, including firewall, a desktop computer for each user and that’s it. All other functions will be handled by outsourced computing available over the Internet. It costs less, works better and lets you focus more of your resources on your business and not on technology, which is what technology is all about in the first place.

Peter Kay is the president of CyberCom, a Hawaii firm that innovates technology-driven business opportunities and can be reached at peter@cybercominc.com.

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