By Alan Glazer, Senior Product Manager at Hostway Services, Inc.
Startups in every industry have their work cut out for them. In recent years, this community has had greater access to cost-effective technological solutions. Still, the vast majority of startups fail.
Working against the odds.
According to Forbes contributor Neil Patel, nine out of every 10 startups fail. Several factors can contribute to these failures, according to CB Insights:
- 29 percent ran out of capital
- 19 percent were beaten by competitors in the marketplace
- 18 percent experienced pricing or cost issues
- 14 percent ignored customers
Tackling these pain points to better position your startup to succeed can hinge on managed hosting.
Managed hosting, in which a company leases dedicated IT equipment and resources, has become increasingly popular in recent years, a trend projected to continue. According to a January 2015 Markets and Markets report, the managed services market will likely experience considerable expansion through 2019 thanks to boosted adoption across a range of industries, including the startup sector.
“Organizations of all sizes are showing an increased interest in outsourcing their expensive in-house IT-related infrastructure to third party managed service providers to attain better efficiency from these resources as well as to use their costly IT personnel for more creative tasks, such as forming new policies and to smoothen out their current processes,” the report stated.
Why do startups need managed hosting?
There are several advantages that startups can reap from managed hosting, including more cost-effective access to high-performance IT equipment. Because it is a leased service, a startup avoids the high cost of investing in on-premises top-notch servers and hardware components. Instead, the company can rent these from its service provider, reserving its limited capital for other purposes.
Managed hosting also offers savings when it comes to internal IT and overall maintenance. Many startups, limited by available resources, can’t afford to have a team of IT workers to update equipment – some groups may have a single individual taking care of these responsibilities, or count on an employee to take on these tasks in addition to other duties. Outsourcing this to an expert team ensures hardware is properly maintained at all times. Not only does this save considerable time and money, but it also enables workers to focus on other mission-critical aspects of the company.
This style of hosting can also be a boon when it comes to security and compliance. The expert management it provides better ensures that critical, sensitive resources are maintained in a protected environment. In addition, some vendors like Hostway take extra steps to guarantee compliance with industry regulations like the Payment Card Industry Data Security Standard.
Managed hosting is also inherently reliable, ensuring that the startup is never without access to its important applications or customer portals. In this way, the company can provide the best possible service to its clients while having the peace of mind that its critical infrastructure will always be available.
In addition, managed hosting offers scalable, secure resources that can grow alongside the business. Because equipment can be dedicated to a single client, the environment is more protected. Since managed hosting providers inherently operate at scale, resources are readily available for expansion. In this way, the managed hosting provider can support the organization’s demands and requirements at every stage in its lifecycle.
Overall, managed hosting offers a range of advantages for startups, many of which directly address the top reasons for failure in the industry.
Alan Glazer has almost 15 years of experience as a product manager in the information technology field. At Hostway, he oversees the Managed Hosting product set and vendor relationships for Managed Services, Dedicated Servers, Colocation and Security Services. Alan holds a bachelor’s degree in Computer Science and an MBA in Marketing from the University of Delaware. He’s also a certified Scrum Product Owner, ITIL Foundation Certified and a practitioner of Pragmatic Marketing and Journey Mapping.