Why Your Agency Should Offer Managed Cloud Hosting to Clients

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When it comes to end-to-end services, digital agencies offer an impressive range. From requirement analysis to post-deployment maintenance, these agencies do everything to make sure that their clients are able to fully leverage their projects for maximum business efficiency.

In this backdrop, many agencies (particularly those that deal with web-based projects) also offer hosting as part of their services to their customers. While small and up-and-coming digital agencies might not have hosting on their service brochure, mid-tier and top-shelf agencies see hosting as an integral service offering to their clients.

Setting up Hosting for Customers

For a web-based project, web hosting is an essential component that determines the success (and failure) of the project. Since the agency has developed the project, many clients trust the agency-managed hosting for their project.

High-performance applications (online stores and CRM in particular) demand a hosting solution that’s able to keep pace with the high request volume and a large number of concurrent connections. Clients with these projects can’t compromise on the post-deployment performance of the applications. As such, agencies prefer an in-house hosting setup that caters to the specific requirements of the projects.

Agencies Benefit From In-house Hosting

Before going into what benefits agencies get from an in-house hosting setup, it’s important to understand the major requirements of high-performance projects. Without going too much into the details, in-house hosting solutions are set up to make sure that custom-built projects continue to perform on the following parameters:

• the number of visitors per hour/day/month
• the number of simultaneous visitors
• the maximum number of connections allowed
• the number of simultaneous requests/orders
• the size and complexity of the products catalog (number of products, product categories, attributes)
• the content requirements and traffic on content assets such as blogs
• the volume of search queries on the site
• the size and connections on the database

With in-house hosting solutions, agencies (and their clients) get a whole range of benefits such as those outlined below.

Custom Hardware and Software

Hardware requirements for custom, high-performance projects generally include three components: CPU, RAM and Disk Space. Since each project has custom requirements that are often not available in off-the-shelf hosting solutions available in the market, agencies opt for setting up in-house hardware platforms for their customers.

Custom hardware setups usually cost more than the conventional, commercially available hosting hardware architecture. The cost of setting up and maintaining the hosting architecture is usually the responsibility of the dev agency, which usually bills the client for these services.

Another related (and in my opinion, more important) requirement of these projects is a custom environment that comprises an OS layer and a facilitation layer made of servers and caches. A custom environment allows agencies to build their projects without worrying about conflicts with the OS and server software required to execute the codebase. Thanks to in-house hosting, digital agencies can completely customize the OS and server layer to the project specifications.

End-to-End Management of Project Hosting

Project requirements change and clients often revise their requirements and scope. These changes also impact the hosting requirements and specifications. Since the hosting process is being managed in-house, the agency can take proactive actions to improve hosting setup specifications and ensure continued performance for the application.

Passive Income Stream

In almost all cases, agency-managed hosting solutions are built and maintained on the client’s dollars. The agency proposes hosting setup specifications and sets it up once the client pays for it. Once the setup is active, the client pays for the maintenance and upkeep of the hosting solution. This is a passive income channel that is often an important supplement to agency revenues.

Challenges In-agency Managed Hosting

Despite the benefits, managing an in-house hosting setup can prove to be a drag on the agency operations. In particular, agency-managed hosting causes the following challenges for the business processes.

Hosting Architecture Requires Continuous Attention

Since this is an in-house managed hosting solution, it’s obvious that the agency is responsible for keeping both the hardware and software layers operational. While the hardware layer (the physical server machines and the networking equipment) have a lower ratio of failure, it’s important to note that the software components of the hosting solution require detailed attention and upkeep.

Both hardware and software vendors regularly release patches that fix bugs and enhance product functionality. In many cases, these patches are mission-critical and essential for the continued performance of the project’s hosting. In in-house managed hosting, this is the responsibility of a dedicated team that performs no other function.

The Constant Need for Security

Web servers are the prime target of cybercriminals because of the wealth of information and user data on them. The problem with server security is that it's a full-time function that requires specialists on the team. The same goes for clients’ applications (CMSs such as WordPress are especially vulnerable) that could potentially open up security loopholes in the server and application security. Not many agencies can afford a dedicated infosec expert on the payroll. Thus, there's always the danger that clients’ applications can get hacked because the agency-managed hosting is unable to maintain the required security standards.

Sysadmins Prove to be an Overhead

Sysadmins are among the highest-paid professions in the ICT industry, and rightly so! They manage entire data centers and handle all aspects of hosting servers from provisioning to maintenance. The problem with sysadmins is the high recruitment and operational costs of these professionals. Thus, hiring a sysadmin to manage in-house hosting is a serious decision that's out of the budget of many dev agencies.

Deviation from the Core Business

Digital agencies are in the business of building applications and custom projects that create value for their clients. An in-house hosting solution requires competence that lies outside the normal scope of the dev agencies. In addition, managing hosting solutions require expenses that eat away into profits without generating enough revenue to justify their inclusion in business offerings.

Shared Hosting is a False Start

The good news is that many agencies are aware of the issues with in-house, agency-managed hosting and have come to realize that this is not the ideal solution for managing clients’ hosting focused expectations.

However, since the clients’ requirements continue to grow and the need for hosting solutions for custom-developed apps is on the rise, a number of agencies have turned to shared hosting as an alternative to agency managed in-house hosting solutions.

When opting for shared hosting solutions, agencies try to reduce the cost of hosting solutions while providing a comparable hosting solution to the clients.

Before going into the description of why shared hosting solutions are in fact counterproductive for dev agencies, it's important to understand how shared hosting solutions work.

Shared Hosting in a Nutshell

As the name implies, shared hosting is a solution where several websites/applications are hosted on a single physical server. This means that the physical resources (CPU, RAM, Disk space and bandwidth (in some cases) get shared among the websites hosted on the server.

While this is not a bad solution per se, it's not the right ft for high-performance applications. These applications have a minimum server resource requirements that often exceed the allocated “quota” allocated by the shared hosting server.

Many digital agencies try to integrate shared hosting solutions in their customer-focused services by eliminating sysadmins from the equation and asking the developers to manage the hosting servers for the clients.

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