Research Firm Yankee Group Underscores Managed Hosting as Route to Eliminating IT Capital Expenses

Business Wire, July 8, 2008

The Planet Announces White Paper Outlining How Increased Efficiency, Reduced Labor Costs Allow Customers to Focus on Business to Compete More Effectively

HOUSTON -- The Planet, the global leader in IT hosting, today announced the availability of a new white paper from the Yankee Group research firm that details managed hosting services as a tangible consideration for companies looking to reduce IT costs. The paper - titled Leveraging Capex-Free Managed Hosting and authored by Yankee Group Senior Analyst Gary Chen - provides an insightful examination into the formidable IT barriers faced by small- and medium-sized businesses (SMB) in today's competitive business environment. Chen emphasizes the choice of managed hosting services as a strategic and effective alternative offering enterprise-class capabilities previously not affordable for most companies.

In a separate announcement issued today, The Planet introduced its Planet Northstar Managed Hosting business. (See separate release: "The Planet Enters Managed Hosting Market Backed by New Proactive Anticipation Advantage Methodology")

"By offering enterprise-class IT systems and services for a predictable monthly fee, managed hosting helps to level the playing field, as well as improve the technical capabilities of businesses that until now could not afford to match their larger competitors," said Chen. "By using the services developed by providers such as Planet Northstar, companies can overcome resource constraints that might have limited them in the past. They can look forward to a future where IT systems can be leveraged for less upfront money and with less risk, to the greater benefit of commerce and presence on the Internet."

"SMBs continue to migrate more of their business functions to the Web, which allows them to compete on an even playing field with their larger, better-funded competitors," said The Planet's Vice President of Marketing and Product Management Steve Kahan. "Managing the associated IT infrastructure presents its own set of challenges, since it requires the expense of savvy technical staff to provide the rich experience that's required. As recommended by Yankee Group, Planet Northstar and its Anticipation Advantage methodology provide customers with access to a dedicated team of seasoned professionals who have a wealth of experience managing mission-critical infrastructures."

Why Web-Based Businesses Turn to Managed Hosting

According to the report, while many companies turn to IT outsourcing to help reduce IT costs, there are additional key considerations for moving to a managed hosting environment:

Control capital expenses: By choosing managed hosting versus a do-it-yourself approach, companies can convert IT costs from a capital expense to an operating expense, which frees up valuable cash for investment in growth strategies and revenue-producing activities. For early-stage or start-up businesses, it allows executives to add technology quickly and easily, as their businesses grow, instead of adding unnecessary hardware, software and bandwidth before it's required.

Reduce risk, improve accountability: Managed hosting providers offer not only critical core services - hardware, software, bandwidth, security and other high-level capabilities not typically available to SMBs - they also include detailed Service Level Agreements (SLAs) that offer assurances that their customers will be up and running around-the-clock. Even more important, if these agreements are not met, SMBs can switch much more easily to another firm rather than having to replace in-house assets or staff.

Gain enterprise-parity to level the playing field: Managed hosting providers enable SMBs to be on equal footing with their larger, better-funded competitors by giving them access to their own economies of scale, cutting-edge technologies, superior reliability, security and service.

Leverage expertise and best practices: By serving thousands of customers, managed hosting providers offer access to professionally certified experts who have extensive IT experience SMBs could never afford to retain on-staff. These hosters develop solid best practices and procedures for their customers which cannot easily be replicated by small businesses.

Increase efficiency, streamline operations: Small businesses wage a constant battle attempting to keep up with new technologies while still managing costs. Managed hosting helps increase efficiency and streamline operations by eliminating the burden of mundane tasks so these companies can focus instead on their businesses.

Reduce staff and labor costs: IT talent is costly, compounded by the cost of training to keep expert staff up-to-date on the latest technologies. Managed hosting provides instantaneous access to a large pool of seasoned experts who are accountable for their customers' success.

Start new projects, respond to market conditions faster: With IT resources and teams immediately available, managed hosters can scale their customers' infrastructure quickly to respond to emerging market changes.