Website Hosting Agreements

A well-designed, well-maintained website can be a huge asset to a business. Yet like many other business investments, websites must be actively managed and maintained. Website hosting is one of the ongoing expenses associated with a commercial website. A finished website cannot simply be “tacked up” on the Internet like a flier on a bulletin board – it must be hosted on a server connected to the Internet, and will only appear online while the server is running. Service providers for website hosting are not hard to find, but contracting for such services can be intimidating to the uninitiated.

Website hosting agreements come in two basic forms: managed services agreements and co-location agreements. Co-location is easier to understand, although less convenient for the average user. In essence, a co-location agreement is a lease of storage space and Internet connectivity. The customer is responsible for providing and maintaining his own server equipment. Since few active services are required, co-location agreements generally deal with liability issues and guarantees. The customer will guarantee that it owns the server equipment being stored, and that it has the right to distribute the content it posts online. The provider will make guarantees relating to the server’s uptime and physical security. Also included are basic terms such as the length of the contract and termination rights.

Co-location provides site managers with substantial control over their sites and equipment, but offers few support services, and is more expensive than a managed services arrangement. It is most appropriate for technologically sophisticated companies, or companies large enough to support an independent IT department.

A managed services agreement, as its name implies, is one wherein the customer turns over some or all control of his website to the service provider. Rather than providing his own server, the customer will rent space on one owned by the service provider. In addition to the Internet connectivity and security features provided in co-location agreements, managed services agreements also include a variety of other services. These can include backup servers, software updates, email services, security patches, database services, website usage reports and more. The amount and type of services offered can vary widely between providers, so customers should shop around for a provider whose package of services best meets their individual business needs.

The trade-off in a managed services agreement is in control over content. Although customers will be able to make changes to their websites, they may need to be submit them through the service provider with some amount of lag time. For customers who want a more hands-on approach to content editing, some service providers offer so-called “back-end scripting” software, which allows the customer to update his site independently from a remote location.

Businesses will consider many factors when choosing a web hosting agreement, including website size and functionality, security concerns, cost, and desired maintenance. As with any service agreement, the better an organization understands its own needs, the better positioned it will be able to negotiate an effective contract.