Kate Craig-Wood, MD of IT Hosting company, Memset, believes the best way you can protect yourself from IT suppliers going bust is by disintegrating the IT services supply chain. The rationale goes like this: Do not host your software with the same people that build it (eg. Salesforce.com or Google) since all your eggs are in one basket.

Instead, purchase your software from one provider, but have a direct relationship with the host. Some of our customers are starting to do this with us and Zimbra. Zimbra is sort-of like Google docs, but open source, and they host it with us, and backup to a third-party host (which is cheap to do).

Good for resellers too

Managing the backup and hosting process might be a new way that resellers can differentiate their offering or add value to the supply chain as more and more businesses look to protect their data as they move to a Cloud Computing model. Ensuring ease of data migration between cloud providers is paramount for businesses moving forward.

By not being tied to one provider, a business could easily migrate to another host, or if Zimbra becomes unsupported, for example, they would not lose their data, and we would carry on hosting while they work with us to find a new software solution. If we fail, they still have their data and Zimbra can help them get set up again. We (the managed hosting provider in this example) would not own their data even if we did fail, but no harm in belt-and-braces.

Hosting commoditisation is here

Software providers cannot realistically compete in today’s commoditised hosting market place, and instead should stick to their strengths. This also applies to migrations – when moving customers between hosts there are now companies that specialise in the migration itself but have no interest in selling software nor hosting. One such company is SEM Solutions, with whom we have recently started working.

Another big win from supply chain disintegration is that you gain total price transparency; no more getting stitched up by one provider who is just whacking a huge mark-up on a commodity service like hosting (yes, I’m talking to you, local government CIOs).

Not only does it show you which bits cost what, thus allowing you to compare with the market rates, but disintegrating the supply chain also makes migration to a new cloud/managed hosting provider easy since you just need to work with the software supplier to migrate to the new host, and are not tied in to one provider. Equally, since you own the data on the service (because you are buying the hosting direct), moving to a new software provider is greatly simplified.

Where is my data?

Outsourcing e-mail and data to a cloud-based provider also raises issues with data location policies and acceptable Service Level Agreements. A potential issue with any Cloud-based outsourcing is that the location is often outside the UK and thus in breach of data protection laws saying you can’t move info across International boundaries.

Furthermore, if you do need to store documents, do it yourself, rather than trusting some nebulous non-geographically-specific organisation to do it. Simply rent a server from someone UK-based that has solid SLAs. You certainly don’t pay more; for example our storage solutions cost as little as £0.02/GB-per-month, based in Reading and is a dedicated IT resource. Amazon’s “Simple Storage Service” is more like £0.10/GB-per-month.

Eating my own dog food

So, do I take my own advice? Yes! Memset is one of the fastest growing technology SMEs in the country, and all our business critical information and systems are hosted in the cloud (or at least our little bit of it) and accessed over the Web. None of my staff have Microsoft Office, we do not pay for any software, and we do not need servers in our office for administration applications.

Everyone has a laptop, and since all our systems and documents (we use a Wiki for the latter) are hosted online everyone can work from home without the complications of a VPN. We do not use any paper for internal communications either, thus minimising “the printer has broken” type problems.

We also use Trac project management and documentation management system for all our internal documentation, task and project management. It is free and simple to host yourself with any managed hosting provider. Simple, scalable systems like Trac have also made it easy for us to obtain and maintain our quality, security and environmental management systems (ISO9001, ISO27001 & ISO14001 accreditations).