7 Secrets of Successful Webhosting Companies

Copyright 1999, Alabanza, Inc.
All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden.
hich web hosting companies get the most publicity? Big firms
like Qwest and Exodus. Theyve got the big clients, with the
big e-commerce sites, doing millions of dollars in transactions.
But the larger market right now is made up of millions of
small businesses and consumers that have their domain name
on a shared server. Theyll dominate the web hosting business in the short
term by their sheer volume, and their numbers are growing. But whats most
interesting is that of the nearly six million domains registered today, over
5 million of them are dormant or barely active!
Whats going to happen when these businesses want more than just their
name reserved and some basic e-mail? Will web hosting companies be able
to fill those needs, while earning just $19 per month? To survive, tomorrows
web hosting company will have to be a service organization, and an
innovator of software services - - not just a bandwidth vendor offering a
secure facility.
The company web site today is an insignificant part of most businesses.
E-mail, for example, is something quickly loaded off the web site and
deposited on the clients machine. But thats going to change. Very soon
the client machine will be diskless and no information will be stored there.
The web site will then be the very epicenter of company e-mail. But thats
only the beginning. Spreadsheets, to-do lists, calendars, bulletin boards,
and documents will all be perched on private and public sides of a
companys web site. Organizations, individuals, and hobbyists will have
the same sort of arrangements.
What do you need to do, if youre in the web hosting business, to get
ready for these changes? The secret is to focus on seven key areas. If you
can master these, your business will thrive and prosper.
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7 Secrets of Successful Web Hosting Companies
1. End-user Controls
Above all, give as much control of the web site as possible to your end user.
Youve been collecting $10 and up per month from end users who have
mostly been idle. When they wake up, theyll do one of two things: trample
your support systems, or buy more products and services. The latter will
happen if you put them in control of their web site. Theyll need less
support, theyll be happier, and your bottom line will improve. Setting up
end user controls wont be cheap, but it will pay back handsomely.
The end-user control panel should be full featured and e-commerce enabled.
With the click of a mouse, End-users should be able to administer all
the special features your system offers, such as site statistics, shopping
carts, mail management, site searches, directory protection, billing history
and more.
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Give your web site

owners the ability to manage
their own sites.
2. Client Management Software

The second most important way to prepare for your future is to get control
of your systems for managing your clients web sites, including customer
features and policies.
Everybodys always talking about scalability. What does it mean? It means
your business should be as easy to manage with 10,000 web sites, as it is
with 100 web sites.
Your business is not scalable if youre relying on manual systems. Or if youve
got completely different procedures for each site. In those situations, your
costs will actually increase as you grow because youll have to hire people to
manage the increased complexity of your company. And your service will
suffer because, with so many people involved, human error will increase too.
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At Alabanza, weve got something called the Domain System Manager

(DSM). It gives our web hosting company clients complete control of their
servers. The DSM includes: a client database, a billing database, automated
order processing, automated account set-up on the server, automated
InterNIC registration, name server management and many other features.
Our DSM enables the host to completely manage a web server in a userfriendly browser environment. By giving web hosting companies an easyto-administer and reliable system, we enable them to cut costs, increase
productivity and most of all, increase their profit margins on each IP. They
get all these benefits and more for only $2 to $3 per IP - - total cost.
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Create consistent processes for

managing your client web sites
and then create powerful software
to automate those processes
3. Automated Systems Administration

Now we come to your servers. The same rules about consistency and
scalability apply here.
Again, Ill use Alabanza as an example. Weve designed all of our server
hardware and software from the ground up to work the same way, allowing
for plug-and-play ease of maintenance.
Each of our 300 machines run the same operating system (OS), with the
same software, in the same directories, with the same parameters. Additionally, all of our hardware is custom built by the same builder to our precise,
consistent specifications. If something goes wrong with the server hardware
we have another of similar configuration to bring the clients web site up
with minimal time and effort.
We keep spare CPU configurations on-line at all times, and all disk drives
are hot swappable. If a clients server hardware were to fail, we would
literally turn a key, grab the handle on the drive, pull it out, and insert it into
an identical standby CPU. Wed reboot the second machine and the sites
would be up and running again in a matter of minutes.
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To make all this happen, we rely almost exclusively on two types of software:
software written by Alabanza programmers and software for which we have
the source code. Alabanza has been built exclusively on the GNU software
model. The GNU Project was launched in 1984 to develop a complete free
Unix-like operating system. Variants of the GNU system, which use the
kernel Linux, are now widely used. Our primary services are provided by
GNU-based software such as Linux, Apache, Bind, MySQL, Sendmail,
Procmail, Perl, Python and PHP.
Using the GNU program, we have the source code for every item that runs
on our servers, freeing us from reliance on any other commercial entity
for support of their software. When a bug is found, our programmers isolate
the error and correct it promptly.
Alabanza programmers work diligently on a daily basis, tweaking and
patching the Linux kernel and the assortment of GNU software that
provides key services on our network. Then, automated systems administer
the necessary upgrades to all of our clients machines with absolutely no
downtime involved.
We also proactively monitor the servers with our System Resource
Monitoring tools to help ensure our guaranteed up time of 99.5%.
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Cut costs by getting

complete control
over your systems
administration.
4. Security
Security can kill a web hosting company. If you dont already know, hackers
are constantly trying to break into your system, and many of them succeed.
Sometimes theyre harmless. But theres real potential for problems. Without
effective security measures, you can burn up thousands of man-hours trying
to safeguard your system against these intruders.
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Now, heres where scalability comes into play again, and can affect the
quality of your security. If your servers arent managed in a uniform way,
your systems administrators can quickly be overwhelmed. If a security
hole is found on a server, it will only be addressed on that server. Each
server needs the special attention of a technician, which in many companies
is rarely provided.
Alabanza takes a proactive approach in monitoring clients servers. Each
server is equipped with a security-monitoring system that sweeps the
servers resources regularly to check for unauthorized activity. Our scripts
will actively defend the servers and notify us of any unauthorized activity.
If a security hole is found on a server at Alabanza, the hole is patched with
a few simple commands within half an hour, not only on the breached
server, but also on all of the other servers on the Alabanza Network. This
will remain true whether we have 2,000 or 20,000 servers.
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You cant afford to

overlook security. Implement
the best measures to
safeguard your network.
5. Data Center and Connectivity

Quality Physical Plant
To meet the demands of web site owners, youll need the best hardware
and facilities to ensure that your clients sites will remain up and running
on the web 24 hours a day, seven days a week. Youll need a Network
Operations Center (NOC) equipped with standby machines, top-notch
routers and switches, high-quality uninterruptible power supplies
(UPSs) and a temperature-controlled environment, all located in a secure,
monitored facility.
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The two components on a server that are most likely to fail are the power
supply and the hard drive. You can protect against a power supply failure
by making sure that you or your provider have redundant power supplys
in the server. Remember the power supply is different from the UPS. The
power supply is a small box inside of the server that supplies power to all
the electrical components within the server.
To avoid drive failure you should be sure to use name brand hard drives
with low failure rates (the lowest rate is one hour in 10,000). It is also helpful
to have a standby burned-in server in the event that you have to rebuild a
drive in an emergency.
To guard against local power failures, youll want an industrial strength
UPS system that acts as a back-up battery, maintaining uninterrupted power
in case of surges or power outages. With these backup systems in place,
you can keep your network up and running indefinitely without relying on
your buildings power.
The temperature in your NOC should be regulated and monitored 24/7
and held at a constant 65 degrees Fahrenheit. Your facilities should be in a
restricted access center, which is not open to the public.
Connectivity
A web hosting company who wants to connect to the Internet needs at least
a DS-3 data line from an Internet Service Provider such as MCI, ATT or
Earthlink. And in order to have redundancy the host company should have
two DS-3s; without two the host company is susceptible to network outages
that can cripple or destroy the business. But thats just a basic set-up.
Studies have shown that the second most common reason for downtime
is circuit failure on the Tier 1 backbone, the major data highway. To guard
against this potential problem, we have two Tier-1 providers. If one has
problems, we can route traffic down the other one. With these two carriers,
our router has up to 150,000 possible routes to send each packet of traffic.
Furthermore, because we are OnNet with Frontier GlobalCenter and Qwest,
we share their digital distribution architecture, which includes private
peering network connections to major Internet carriers such as MCI, Sprint,
UUNET, EUNET, AT&T, AOL, Best, Erols, @Home, IBM Advantis and
others. These private peering arrangements allow Alabanza to exchange
packets of data with every major backbone carrier in a one-to-one
environment quickly and efficiently.
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Alabanza uses intelligent end-user routing software called Border Gateway

Protocol (BGP), between Qwest and FGC, who use it as well. BGP can
identify which path is the most efficient for each data packet, and then route
the packet to its destination on the fastest path. This increases the speed at
which web pages sent from our NOC arrive at their destination.
In addition, FGC has high-speed links to 8 public exchanges including
both MAE East and West and several NAPS. Through these many public
exchanges, customers have the ability to reach their site wherever they
are coming from on the Internet. Thus we have the best of both worlds:
a network that is both efficient and wide reaching.
Industry analysis reveals that 70 percent of downtime over 10 hours with
any ISP is caused by telephone circuit failure. Since our NOC is in the same
building as Frontier Global Center, circuit failure is virtually eliminated
because there is no phone circuit between FGC and our facility. Instead,
there is a direct connection between our Cisco 7200 router and theirs.
The second most common reason for downtime is circuit failure on the
Tier 1 backbone. FGC, themselves a backbone, also have peer connections
with other major Tier 1 providers, which allows traffic to be switched to
other backbones quickly in the event of a crisis.
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Invest in great connectivity

to attract the high performance
sites of the future.
6. E-commerce
Youll want to be positioned to attract budding e-commerce sites. Thats
because consumer spending on the internet will reach $184 billion
by 2004 (according to Forrester Research). And that doesnt include the
burgeoning business-to-business market. The webs unlimited shelf
space and rich customer data will afford site owners tremendous opportunities to sell effectively.
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Your more sophisticated end-users will want e-commerce capabilities

for their web sites. At Alabanza, weve developed our own, called AlaCart.
You may not be in the position to build your own e-commerce software,
but you can buy or license a package. What features should you look for?
Here are some basics:
Built-in Credit Card Validation

On-line credit card processing
Highly customizable look and feel
Unlimited product categories and sub-Categories
Automatic shipping and handling charges,
customized by the user
Automatic tax table, completely customizable
Product search capabilities
Secure Order Processing
Online Documentation
Another important part of e-commerce is security. Whenever you process an

order online or handle any sort of private or confidential information, you
need to make sure that you have the necessary security features in place so
your information cannot be intercepted.
We enable clients to do the online processing securely using Apache-SSL,
the highest-grade encryption available. They have to purchase their own
digital certificate from Verisign or Thawte and have us install it. There is no
extra charge for setting up forms for secure transactions.
The last step is credit card processing. The leading company offering a
gateway for online credit card transactions is CyberCash. It has been servicing credit cards securely over the internet since April 1995, and works with
leading financial institutions and payment processing networks.
Processing credit cards online is more complicated than it appears. To do it,
you need to go to your bank and get a merchant account. Your bank will then
get in contact with CyberCash. CyberCash acts as a gateway between the
bank and the web site where the payment is coming from. You do not pay
CyberCash directly, but you need to pay your bank for this service. CyberCash
allows you to actually process orders on-line, as opposed to collecting credit
card information and then processing the transactions manually.
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CyberCash links your virtual storefront with your credit card processor,
providing authorizations at the time of purchase. After the sale, CyberCash
provides a full HTML interface for capturing and settling transactions. This
real-time, secure credit card authentication service is based on digital
signatures. Theyre able to make it as safe and easy to transact business on
the internet, as it is off-line.
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Growth will come from

e-commerce. Offer the
most robust e-commerce
capabilities possible.
7. People & Support

Automation by itself wont solve your problems. Automation will only
extend the talents and capabilities of your people. Hire the very best
personnel you can afford dont skimp. Automation will magnify the
abilities of your people many times over. That means that a 10% increase
in human talent could yield more than a 100% increase in productivity
with the right systems.
Be sure to hire proven talent from the best companies. Check references.
Have job prospects meet with several people in your company before you
hire them.Try to achieve a high retention rate.
The goal here is to provide the best human support to your customers
possible. Again, even in your policies, aim high. At Alabanza, we provide
around the clock support because we know our clients are running
mission-critical applications on their servers. Our call center is open from
8 AM-12 PM, Monday through Saturday. For those who prefer e-mail, we try
to respond to e-mails within a couple hours. But at the very least, we will
guarantee a response on the same business day or else that month is free.
Additionally, we have at least two technicians monitoring the network 24/7.
In an emergency, they can be paged via e-mail. Our support also means
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assisting our clients in monitoring their machines. Our monitoring program

sweeps the machine every couple of minutes to check the system resources,
and if there is a problem, the machine itself will beep our technicians. Many
hosting companies would charge extra for this type of support, but making
it standard will separate you from the competition. Again, aim high. Your
customers will reward you for it.
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Invest in the human side

of your business. Youll stand
out from the competition.
Conclusion
By now youve realized that these seven secrets are not so secret theyre
the fundamentals of great web hosting, and their underlying principles
apply to any successful business. But we all need to remind ourselves
constantly to focus on those areas of our business that are most important.
I hope this report has helped you to do just that.
More Info
If youd like to receive periodic updates on important issues in web hosting,
just send us an e-mail at http://alabanza.com/requestupdates.html. Its a
great way to make sure your business is on the cutting edge of web hosting.
If youd like to find out how Alabanza can automate your web hosting
systems, and help you take greater control of your business, just fill out
the form at http://alabanza.com/requestinfo.html. Someone will contact
you shortly.
11

7 Secrets of Successful Webhosting Companies

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Copyright 1999, Alabanza, Inc.

Give your web site

2. Client Management Software

At Alabanza, weve got something called the Domain System Manager

Create consistent processes for

3. Automated Systems Administration

Cut costs by getting

You cant afford to

5. Data Center and Connectivity

Alabanza uses intelligent end-user routing software called Border Gateway

Invest in great connectivity

Your more sophisticated end-users will want e-commerce capabilities

Built-in Credit Card Validation

Another important part of e-commerce is security. Whenever you process an

Growth will come from

7. People & Support

assisting our clients in monitoring their machines. Our monitoring program

Invest in the human side

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