Microsoft Word - Quocirca - Managed Hosting in Europe - June 2009

Managed hosting in Europe
A review of the managed hosting market and suppliers in Europe

June 2009

The term “managed hosting” describes the provision of a ready to use
IT stack including hardware and infrastructure software for the
deployment of applications. Providers house the infrastructure in
central data centres accessed by customers over the internet. In the
past this has usually been on the basis of hardware servers dedicated
to individual customers, however the increasing use of virtualisation
has allowed managed hosting providers to reduce costs by sharing
infrastructure between customers, creating the earliest versions of
what the industry now refers to as compute clouds. Computing
platforms provisioned and managed by specialists provide higher
service levels, greater ease of secure access and more manageable
costs than many organisations are able to achieve internally.

Bob Tarzey Clive Longbottom
Quocirca Ltd Quocirca Ltd
Tel : +44 7900 275517 Tel: +44 771 1719 505
Email: bob.tarzey@quocirca.com Email: clive.longbottom@quocirca.com

An independent report by Quocirca Ltd.
www.quocirca.com
Commissioned by NTT Europe Online

Managed hosting in Europe June 2009

Managed hosting in Europe
A review of the managed hosting market and suppliers in Europe

The managed hosting market in Europe is thriving despite the current economic conditions. This
report looks at the reasons why, what buyers should look for and who the main providers are.

Executive summary
• Managed hosting is attractive to organisations of all sizes as it allows them to acquire IT infrastructure at a
controlled cost, whilst reducing risk and adding value to their broader business community
Even during economic hard times, managed hosting providers are seeing growth as businesses can deploy
new applications on infrastructure paid for out of operational expenditure. The service levels offered are
often better than those provided by internal IT departments and applications are easily shared with
customers, partners and suppliers.
• Quocirca recognises four types of managed hosting provider (MHP)
First there are the pure plays for whom managed hosting is their primary business, second are the major
system integrators that offer managed hosting as part of a broader service delivery, third are ISPs and
network service providers that provide managed hosting as a value add to their networking services and
finally there are the cloud platform providers that have emerged out of the software as a service market.
• MHPs vary in how they target markets and how they sell their services
Some MHPs focus mainly on the enterprise, others more on small and medium sized business, whilst a few
specialise in working with independent software vendors. Their market focus will control how they take their
service to market and this report helps identify the right provider to approach for a given size or type of end
user organisation.
• Charging models vary but are always based around a subscription
Historically for one‐to‐one infrastructure provision, charging has been based on a fixed cost per allocated
resource, but with the increasing use of shared infrastructure there is a direct link between the customer and
physical resource and has lead to more flexible charging models such as per transaction, per volume of data
or per user/month.
• Most managed hosting providers adhere to the best practice standards for data security and IT
management
ISO27001 and related standards outline best practice for data security and is widely adopted by managed
hosting providers, as is ITIL® for good practice in IT infrastructure management. Suppliers can also help their
customers with specific needs: for example meeting the requirements of the payment card industry for
handling credit card data.
• The hardware used by MHPs is largely irrelevant to end user organisations and the software infrastructure
provided is driven by customer demand, which is mainly for Microsoft Windows and Linux
About 60% of demand is for Windows and 30% for Linux. The increasing use of virtualisation allows the
separation of hardware and infrastructure software and the sharing of resource, dramatically reducing costs.
VMware is the most widely use virtualisation platform, even by providers that focus on Microsoft.
Conclusion
All businesses have a core focus and for managed hosting providers that is the provision and management of top
quality IT infrastructure services. Businesses that recognise the benefits of a highly available and secure computing
platform should consider turning to experts for the provision of this, freeing their organisation to focus on its own
core activities.

©Quocirca 2009 Page 2


Contents
1 INTRODUCTION—FROM MAINFRAME BUREAUX TO CLOUD COMPUTING ............................................................................ 4
2 REPORT BACKGROUND ......................................................................................................................................................... 4
3 WHY MANAGED HOSTING? ................................................................................................................................................... 5
4 WHAT TO LOOK FOR IN AN MHP ........................................................................................................................................... 6
4.1 TYPES OF MHP.................................................................................................................................................................. 6
4.2 MHP TARGET MARKETS ....................................................................................................................................................... 7
4.3 CHARGING MODELS ............................................................................................................................................................. 7
4.4 STANDARDS ...................................................................................................................................................................... 8
4.5 SERVICE LEVEL AGREEMENTS (SLA) ......................................................................................................................................... 9
4.6 REDUNDANCY .................................................................................................................................................................... 9
4.7 APPLICATION TESTING .......................................................................................................................................................... 9
5 MHP INFRASTRUCTURE ....................................................................................................................................................... 0
. 1
6 CONCLUSIONS ..................................................................................................................................................................... 3
1
7 MHP SUMMARY DESCRIPTIONS ........................................................................................................................................... 4
1
7.1 TYPE 1—PURE PLAY MHPS ................................................................................................................................................. 4 1
7.1.1 NTT Europe Online ........................................................................................................................................................ 14
7.1.2 Rackspace Hosting ....................................................................................................................................................... 14
7.1.3 Savvis ............................................................................................................................................................................ 15
7.1.4 Attenda......................................................................................................................................................................... 15
7.1.5 7global ......................................................................................................................................................................... 15
7.2 TYPE 2—SYSTEMS INTEGRATORS THAT OFFER MANAGED HOSTING AS PART OF A BROADER SERVICE OFFERING ............................................. 6 1
7.2.1 Atos Origin ................................................................................................................................................................... 16
.
7.2.2 BT Global Services ........................................................................................................................................................ 16
7.2.3 Cable and Wireless ....................................................................................................................................................... 17
7.2.4 Fujitsu Services ............................................................................................................................................................. 17
7.2.5 IBM ............................................................................................................................................................................... 17
7.2.6 Logica ........................................................................................................................................................................... 18
7.2.7 Orange Business Services ............................................................................................................................................. 18
7.2.8 T‐Systems ..................................................................................................................................................................... 18
7.3 TYPE 3—INTERNET SERVICE PROVIDERS WITH MANAGED HOSTING SERVICES ...................................................................................... 9 1
7.3.1 Claranet ........................................................................................................................................................................ 19
7.3.2 COLT ............................................................................................................................................................................. 19
7.3.3 Easynet ......................................................................................................................................................................... 19
7.3.4 Global Crossing ............................................................................................................................................................. 19
7.3.5 Hostway ....................................................................................................................................................................... 20
7.4 ONES TO WATCH ............................................................................................................................................................... 0 2
7.4.1 2e2................................................................................................................................................................................ 20
7.4.2 PEER1 ........................................................................................................................................................................... 20
7.4.3 eLINIA ........................................................................................................................................................................... 20
7.4.4 Centrinet ....................................................................................................................................................................... 20
7.4.5 OpSource ...................................................................................................................................................................... 20
ABOUT NTT EUROPE ONLINE ....................................................................................................................................................... 1
2
ABOUT QUOCIRCA ...................................................................................................................................................................... 2
. 2



1 Introduction—from mainframe bureaux to cloud computing
This paper reports on the state of the managed hosting market in Europe in 2009.
“Hosting” is a widely used term in the IT industry; the addition of the verb “managed” narrows it to include those
hosted services that are managed for the subscriber by the provider. So managed hosting does not include pure co‐
location services, where just data centre space is provided. Neither is it taken to include hosted business applications
such as email and CRM (so called software as a service, or SaaS).
Trying to categorise such things is always problematic as there is much overlap. Many managed hosting providers
(MHPs) buy data centre space from co‐location providers and have SaaS providers as customers. Perhaps the best
way to think of a managed hosting service is the provision of a ready to go managed computing stack including server,
storage and networking hardware plus infrastructure software on which customer applications are deployed. Driven
by customer demand, the software component of that stack is most commonly based on Microsoft Windows or Linux,
increasingly virtualised using VMware.
There is nothing new about managed hosting; it is almost as old as the IT industry itself. Back in the 1960s it was
possible to buy‐in compute power from mainframe service bureau and, for some, this is still a lucrative business.
There have long been service providers that will take over
existing hardware and software infrastructure and manage it,
sometimes literally putting it in a van and moving it to the
“In 2009, the managed hoster’s premises. In the last decade, however, a new sort of
managed hosting has emerged based on cheap commodity
hosting stack is most hardware.
commonly based on Initially this was mostly one‐to‐one hosting, where each
Microsoft Windows or customer had their own assigned hardware servers and
Linux” benefited from sharing the cost of just data centre and network
infrastructure with others. However, the concept of sharing has
gone a stage further in the last few years with the widespread
adoption of virtualisation, allowing the one‐to‐many sharing of
server and storage hardware enabling providers to achieve ever greater economies of scale. The culmination of this
process has led to the emergence of so called cloud computing platforms.
Whilst this report focuses on traditional managed hosting and not cloud platform providers, it is the view of some in
industry—including Quocirca—that a managed hosting service based on shared infrastructure and a cloud platform
amount to much the same thing and, at the very least, both aim to provide computing resources to similar types of
customers. Although it should be noted that MHPs largely focus on the provision of Windows and Linux
infrastructure, some cloud platforms are highly proprietary. This version of Quocirca’s managed hosting report covers
cloud computing platforms in section 4.1.

2 Report background
This report describes the benefits of managed hosting and details the services of some of the major providers. The
market is huge, so it limits itself mainly to those that provide their services across Europe. This may or may not mean
infrastructure in multiple countries as some, for example Rackspace, sells managed hosting service across Europe
using infrastructure based in just one country (UK); others, such as NTT Europe Online, have facilities across Europe.
In some cases local infrastructure can be an advantage for performance reasons (see section 5) but there are other
benefits such as better access to language skills for support and the ability to offer contracts under local law. Some
smaller, local MHPs are referred to where an aspect of their service is of particular interest.
The report does not claim to be 100% inclusive, because there are so many providers, but Quocirca believes most of
the major suppliers that fit the definition “pan‐European managed hosting provider” are included; apologies upfront
for any omissions.
With any such report there will be those reading it with an interest in managed hosting who will want to report
such errors and omissions for a planned future version of the report—Quocirca is happy to receive such feedback
via the following email address managed_hosting@quocirca.com.



The level of detail provided to Quocirca for this report varied from one MHP to another. Quocirca sent a detailed
questionnaire to all the companies that are featured. Some enthusiastically returned it within days, some chose not
complete it for non‐disclosure or other reasons. Tables and charts are dispersed throughout the report to show how
different provider’s offerings vary; where detail was not available this is indicated.
This is a free report in line with Quocirca’s business model. Upfront sponsorship for the report was provided by NTT
Europe Online and Quocirca is grateful for its support. NTT Europe Online has a vested interest as it is a provider of
managed hosting services. However, the report is intended to be impartial and Quocirca believes the reader will find
this to be the case, although the case studies included are all provided by the sponsor.

3 Why managed hosting?
IT infrastructure has become more and more of a commoditised utility and, generally speaking, businesses don’t run
utilities, they buy them in. Furthermore, for most organisations, the availability of IT infrastructure is business critical;
it takes specialists to make sure utilities are constantly available and performing well.
Before the mid‐1990s the provision of managed hosting, in the form of mainframe bureaux, was restricted to large
enterprises. One reason for this was the cost of leasing a network connection to such services. The availability to all of
a cheap to use, standardised, ubiquitous network from the mid 1990s onwards (the internet) meant it was possible to
open up managed hosting services to all.
Whilst many enterprises make extensive use of managed hosting services it has also been a boon for smaller
organisations, especially those where internet delivery has become critical to their business. These fall into two
categories:
1. Small and medium sized business (SMBs) that have limited in‐house IT skills
2. Independent software vendors that are moving to a software as a service (SaaS) based delivery model
The benefits of managed hosting for any organisation are best described in terms of improved cost management,
business risk reduction and added business value.
Cost management
Generally speaking, managed hosting offerings are paid for through a subscription (see section 4.3), which is hard to
compare directly with the alternative of buying and managing all the components in‐house. The fact that such
subscriptions are paid for out of operating expenditure (opex), rather than capital expenditure (capex), appeals to
many businesses, especially when on‐going finances are unpredictable. Using a managed hosting platform will almost
certainly lead to a lower cost of ownership, due to the economies of scale achieved through sharing infrastructure
from servers to data centre space.
Furthermore, because MHPs pay close attention to cost it is in their interest to manage software licences carefully; an
MHP will not pay for more software licences than it needs. They also benefit from special licencing arrangements with
software vendors that are not available to end users, such as Microsoft SPLAs (service provider licence agreement). So
economies of scale apply just as much to software as to hardware.
Risk reduction
Ensuring IT systems are kept running is a specialist task. For sure, a
server can be expected to run for months or years without trouble,
but when it does go wrong, fixing it or replacing it quickly is “MHPs can reduce the
essential. Add in all the other links in the chain—storage hardware, risk of IT failure,
network routers, firewalls etc.—and regular problems with
availability are inevitable. Keeping infrastructure running, ensuring committing to service
there is built‐in redundancy and spare parts available, is the job of levels that internal IT
MHPs, who do it all based in purpose‐built, enterprise‐class data
centres. IT failure is a risk most do not want to contemplate; MHPs
departments would
can reduce the risk of it happening, committing to service levels not”
that internal IT departments would not.
Another area where risk becomes easier to manage relates to
escrow agreements. Such agreements ensure the availability of software code should the provider cease trading.
Using software deployed on MHP infrastructure means that the ownership of the software can change, without any
disruption of service. If the software was deployed on the software provider’s own infrastructure it is possible that
the hardware assets involved could be sold by receivers and that would mean the end user having to redeploy the
given software following a possible disruption of service of indeterminate length.


Managed
d hosting in Europe Ju
une 2009

Added valu ue
By its ver nature, inf
ry frastructure provided by an
MHP is deesigned to be accessed b outsiders. As
by
businesses are increasingly seeing the benefits of
s
providing direct access to business applications for
external contractors and the employees of
customers, , suppliers and partners (Fi igure 1) it makes
sense to h osted by a 3rd party with t
have these ho d
the
experience and skills to provide su open access
e uch
with appro opriate securrity. This also applies to an
o
increasingl flexible wo
ly orkforce, mak king it easier to
support ho ome and mobile workers.

4 Wha
at to look
k for in an MHP
The selectiion of an MHP P is a critical d
decision; whilsst it
is possible to change it can take a lo ot of effort to do so and co
ontracts endure for many y
years. This sec
ction examine
es
those aspeects of a mana aged hosting s service that shhould be considered before
e making such
h a commitme ent.

4.1 Typ
pes of MHP
MHPs can be divided int
to four broad categories:
Type 1—pu ure‐play man naged hosting specialists
These are MHPs that are e in business purely for the
e provision of managed hos . This genre arose in the mid
sting services.
90s as the inte
to late 199 ernet opened up the possib bility of manag
ged hosting. If
f your organissation is in a g
given providerr’s
target marrket you shou uld get all the
e attention yoou require. Such specialists generally have a high leve el of standard
ds
compliance e and uniform
m service level ls.
Type 2—sy ystem integra ators (SI) with
h a managed h hosting servicce
Many systeems integrato ors have provi ided managed d hosting as ppart of a broadder delivery o
of IT services f
for many year rs;
for example, developing a supply ch
hain managemment system for customer and then h
rs hosting and managing it fo
m or
them. For this reason, some system i integrators ar
re not all that interested in selling managed hosting in n its own righ
ht,
although s
some are, for example BT. Many SIs ha built up heterogeneou data centr assets over time throug
r ave us re r gh
acquisition
ns and the levvel of standarddisation can v
vary. Most aree undergoing data centre rationalisation n and reductio on
programs.
Type 3—in nternet service providers (IISP) with a ma anaged hostin ng service
Most interrnet service pr
roviders (ISPs)) started off li
ife in the 1990
0s to provide dial up and thhen broadband access to thhe
internet. T
This was normmally accompanied by the p provision of hoosting service
es, specifically
y web sites. So
ome have gonne
on to expaand their offeerings to inclu
ude full manag ged hosting, often with a strong SMB f focus. Standarrds complianc
ce
amongst ISSPs tends to b
be lower than that achieved d by specialists.
Type 4—cloud platform m providers
ca’s view it w not be lon before clo computin platforms a considere in the sam category a
In Quocirc will ng oud ng are ed me as
managed h hosting platfo orms. Indeed, many MHPs r refer to their shared infrast tructure offer
rings as clouds
s; Savvis says it
was “clouddy” before the e term cloud came into co ommon usage e. Whilst it is true that bot
th MHPs and cloud platform
providers offer utility c
computing platforms to th users, so
heir ome of the ccloud platform available today differ in
ms t
important ways from Qu uocirca’s defin
nition of mana
aged hosting. There are 4 m main global platforms:
• Microsoft Azure: a purely Microsoft based
M d offering
• Google: highly proprietary, a
applications based on its ow
wn tool set
• Ammazon EC3: a low level commputing platfoorm that allow
ws deploymen nt of virtual machines
• Foorce.com: highly proprietar
ry, based on salesforce.comm’s Apex deveelopment envi ironment

©Quocirca
a 2009 Page 6


4.2 MHP target markets
MHPs target certain types of customers where they have built up expertise, such as the enterprise, SMB and ISV
markets. Table 1 summarises the target markets of the MHPs covered in this report.
Table 1: Target markets

Public sector
Enterprise

SaaS
SMB

ISV
Type 1 ‐ pure play MHPs
7 Global X X X X X
Attenda X X X X X
NTT Europe Online X X X X X
Rackspace X X
Savvis X
Type 2 ‐ system integrators offering managed hosting as part of a broader service
Atos X X
BT Varies by country
C&W/Thus X X
Fujitsu Services X X X X
IBM X X X
Logica X X X
Orange Business Services X X X
T‐Systems X
Type 3 ‐ internet service providers offering managed hosting as an add on to internet access
Claranet X X X X
COLT X X
EasyNet X X X X X
Global Crossing X * X
Hostway X X X
* Mid‐market only
MHPs develop routes to market in line with their target market. This should make them easy to deal with if your
organisation fits their target profile; for example those dealing with the SMB market will often work with resellers, for
example BT via BT Retail. Some have created specialist services for the independent software vendor (ISV) market and
this is reflected by their participation in vendor programs such as Microsoft’s ISV incubator, which includes NTT
Europe Online, Attenda, 7global, 2e2 and Rackspace. Some, such as OpSource, only target the ISV market.

4.3 Charging models
Charging models for hosted services vary, but they are all based on a subscription of some sort. The more control the
service provider has over the infrastructure being managed, the more likely they are to use virtual parameters such as
compute power used, number of virtual servers invoked or more business‐orientated metrics such as per user or per
transaction charges. When the customer specifies the hardware, charging tends to be based on material parameters
such as allocated floor space, number of rack units, power use and items of hardware under control.
With a standard commoditised stack the service provider understands what it takes to power it, maintain it and
ensure high levels of availability better than when they are managing bespoke equipment. This then allows them to
bring charges in‐line with a customer’s own business model; so, for example, an ISV providing a hosted email service
may want charging based on the number of active mail boxes whilst a ticketing agency may want transaction‐based
pricing based on tickets issued.
Those MHPs that have a focus on the ISV market will usually be flexible enough to provide charging models that
reflect those of the ISV itself.



4.4 Standards
There are a number of standards that pertain to good data centre management and data security. Some will matter
more than others depending on the deployment being planned. Table 2 shows the standards complied with by
individual MHPs.
Table 2 ‐ standards compliance

PCI support
ISO27001

ITIL® v2

ITIL® v3

COBIT

Other
7 Global Y
Attenda Y Y Y IP ISO 9001, PRINCE2
NTT Europe Online Y Y Y Y ISO 20000 (IP), PRINCE2
Rackspace PN Y Y
Savvis Y Y Y Y
Atos Y Y Y Y Y
BT Varies by data centre
C&W/Thus Y
Fujitsu Services Y Y Y PRINCE2
IBM Data not available
Logica Y Y IP ISO 9001 and ISO 14000
Orange Business Services Y Y PR Y
T‐System Data not available
Claranet Y
COLT Y Y
EasyNet Y Y Y Y
Global Crossing IP Y IP
Hostway IP IP ISO9001
IP = in progress, PR = partial, PN = Pending
ISO27001
Compliance with ISO 27001 shows the MHP follows generally accepted good practice to ensure the confidentiality,
integrity and availability of data. The standard is widely adhered to by MHPs, but check for full certification, which
means compliance is externally audited every 6 months.
ITIL®
Information Technology Infrastructure Library outlines the practices that are the most beneficial to delivery of IT
services; v3 is the latest version and many organisations are in transition.
COBIT
Control Objectives for Information and related Technology is a set of best practices for IT set out by ISACA
(Information Systems Audit and Control Association).
SAS 70
Statement on Auditing Standard 70 is targeted at those who provide outsourced services, such as MHPs. It examines
how they process transactions and how they are audited.

PCI DSS
Payment Card Industry Data Security Standard: MHPs do not comply directly with PCI standards, but they can help
their customers to. The standard which details how payment card information should be handled requires certain
levels of physical and virtual security.
PRINCE2
A project management method defined by the UK’s Office of Government Commerce (OGC) for UK government
projects.



4.5 Service level agreements (SLA)
Any contract made with an MHP should address service levels and define what the penalties are for failing to meet
them. It has already been pointed out in section 3 that one of the benefits of working with an MHP should be a better
SLA than might be expected from an internal IT function but also that failure to meet the defined SLA has
consequences.
A key metric in a SLA is system availability, or “up‐time”, as a percent of total time. Typically MHP SLAs provide
upwards of 99.95%, but remember there is a big difference between 0.05% outage which is almost 450 hours a year
and 0.005% outage which is less than 45 hours a year.
To provide visibility into the systems,
most MHPs provide some level of
End user case study—Boursorama
access to systems data relevant to an
individual customer, but the ease of Boursorama is one of Europe's leading online share
access to such information and the trading brokers and, in 2006, became an online bank
tools provided will vary. Generally, too. It is active in France, Germany, Spain and the UK.
access is provided via a web‐based
Boursorama.com brings together financial information
customer portal. Some, such as Global
from many sources to provide a single point of access
Crossing and NTT Europe Online, see
for a range of services producing over 3 million unique
the access tools they provide as being a
visitors a month. A disruption in Bousorama’s online
key differentiator.
service would mean a complete loss of contact with its
customers and cause serious reputational damage. It
4.6 Redundancy needs a guaranteed SLA with high uptime
The reason that MHPs offer such high commitments.
service levels is because their business To achieve this, Boursorama initially worked with a US
would fail if they did not. Their provider, but wanted to bring its operations close to
organisations and business processes home to improve performance times, which are critical
are based around keeping IT going 24 for financial transactions.
hours a day, 7 days a week, 52 weeks a
year. To achieve this, MHPs have to In 2003, after an evaluation of European MHPs,
have built‐in redundancy at all levels. Boursorama turned to NTT Europe Online’s French
This includes hardware, network access, operation which offered the best value whilst meeting
power supply and the data centre itself the required SLAs, could perform the migration and
(see section 5). provide full redundancy with failover to NTT’s London
data centre.
For one‐to‐one hosting, redundancy is
relatively expensive; it might require a
complete replicate system on hot stand‐
by so as soon as a problem occurs all users and transactions can be switched over whilst the failed system is fixed.
MHPs will charge a premium for this.
With shared infrastructure, redundancy is built‐in and automatic and consequently much cheaper. It is incumbent on
the MHP itself to have a fully redundant infrastructure. The infrastructure will not be reliant on a single item of
hardware: should a server or router fail, it can be replaced whilst the rest of the system keeps running. A storage
failure of some sort may lead to some disruption whilst data is recovered, unless mirrored data sets are in use (for
which some MSPs will charge a premium). Most MHPs will have at least one secondary data centre facility.

4.7 Application testing

Obviously, before an application can be deployed it needs to be developed and tested. Most organisations maintain
an internal development platform, but will still need to test applications on an MHP’s infrastructure before
deployment; this includes post deployment updates. With one‐to‐one hosting, recreating the deployment
environment is expensive but with shared infrastructure it is easy and cheap and an isolated virtual environment can
be provisioned using the same underlying infrastructure that will be used for deployment.



5 MHP infrastructure
This section looks at the infrastructure choices made by MHPs and options that they offer to their customers.
MHP hardware preferences
For the purchaser of managed hosting services hardware is pretty much irrelevant; it does not matter providing the
service works reliably. However, for the MHP itself, having good relationships with selected hardware providers are
important to ensure favourable pricing and good service levels, so they work with selected suppliers from a
predictable list.
For the hardware vendors themselves, ISV case study—2e Systems
these relationships are critical, as 2e Systems is an ISV serving four major airlines in
managed hosting changes the whole Germany, where it is based. It provides services for
dynamic around how businesses pay for flight bookings, check-in, frequent-flyer programmes
server MIPs, gigabytes of storage and and mobile notification—all considered critical for the
network bandwidth. on-going efficient operation of an airline.
This is especially true in the SMB market; 2e Systems wanted to bring all its applications together
consider the sale of an accounting to offer them as a single service and, to achieve the
application. In the past each SMB would highest possible service levels for its customers, it
buy an accounting system and choose a sought a managed hosting partner.
hardware server to deploy it on—so the
hardware vendors had many Eventually 2e Systems selected NTT Europe Online
opportunities to sell their equipment because it was the most cost effective, could provide
providing they had the right channels. the required service levels and a charging system that
However, if the same accounting reflected the business model of airlines; for example, a
application is now sold as service cost per booking for ticket sales.
deployed on hosted infrastructure, the The applications are hosted at NTT’s Frankfurt data
hardware decision is made just once, by centre, which appealed to 2e Systems as it allowed the
the MHP—in fact, it was probably made teams from both companies to get to know each other
long before the decision to deploy the as they worked together to roll out the new services.
accounting application service. In this
way the hardware requirements of many
businesses are aggregated up in a single
enterprise size chunk. For the hardware vendors the stakes are high but for the end user there is no longer the
distraction of a utility purchase, they can focus at a higher level in the IT stack where the value add to their business is
more obvious—software, which is covered in the next section.
Nearly all hosting services are based on commodity x86‐based hardware. HP is the most widely used, followed by IBM
and Sun. Dell and Fujitsu are less favoured although, unsurprisingly, as an MHP Fujitsu mainly uses its own hardware.
It will be interesting to see how Cisco fares as it enters the server market with its unified computing initiative as it
already has a relationship with most MHPs for the provision of networking kit. Some still offer services around other
proprietary hardware, for example IBM mainframes, but this is generally a bespoke one‐to‐one service and is not
about sharing infrastructure. Fujitsu has a legacy MVE mainframe business from its acquisition of ICL in 2000.
For storage, NetApp is the most widely used, followed by EMC, amongst those that reported to Quocirca; IBM and HP
are generally rated as secondary vendors. Some turn to more specialist vendors such as 3 Par and Pillar; interestingly,
3 Par, a specialist provider of high end storage systems, has placed a long term bet on the ascendancy of managed
hosting as the main way in which IT infrastructure will be provided to SMBs in the long term.
For networking the use of Cisco is pretty much ubiquitous, with Juniper being used in places and some other vendors
favoured as secondary suppliers.
Software preferences
The mix of software provided by MHPs reflects customer demand more than their own preferences. Whether it is an
ISV deploying a SaaS offering or an end user deploying their own application, there will be a preferred software
environment for doing so. That said, currently two main software infrastructure stacks prevail in the IT industry for
application deployment; Microsoft Windows/.NET and Linux/Java.



Where MHPs provide figures around
usage, Windows prevails by a ratio of End user case study—UEFA
around 2:1, although some, for example The managing body for European football, UEFA,
7global, specialise in only providing provides a streaming video service for all its matches to
Microsoft. The Linux distribution most 35 broadcasters for viewers of matches in 120
widely used is Red Hat, with some countries.
Debian and SUSE. Most also support
UNIX where required (Sun Solaris, HP To produce consistent high quality output UEFA required
UX and IBM AIX), and this makes up a reliable platform, a high performance network and
around 10% of business; some reporting efficient content distribution capability. In addition it
a decline, others slow growth compared has to protect digital broadcast rights across
to its two bigger competitors, to which international boundaries.
UNIX‐based applications are often being Rather than trying to achieve this itself, in 2003 UEFA
migrated. turned to NTT Europe Online, which has enabled it to
One thing that is clear from all MHPs is provide a consistent high quality service for the last 6
the rising use of virtualisation. NTT years.
Europe Online reports that 70% of
quotes now require a virtualised environment and it is a necessity for sharing infrastructure. One platform stands out
above all others—VMware—with XEN and Microsoft Hypervisor being used to a lesser extent. Virtualisation not only
makes the sharing of infrastructure easier, but means changing requirements can be more easily taken into account.
Those MHPs that predicted future requirements expect demand for Microsoft‐based infrastructure to outstrip that
for Linux.
At the application sever level, .NET and J2EE are supported in line with operating system requirements. The J2EE
installed base is split between IBM WebSphere, Oracle (including the Oracle Application Server and BEA WebLogic)
and, to a lesser extent, open source products like JBoss and Tom Cat.
Finally, it should be pointed out that some MHPs specialise in the direct support of certain business applications like
SAP, Oracle Applications or Microsoft Exchange, SharePoint and Dynamics. This should not be confused with ISVs who
use MHP infrastructure to provide their own applications as a service.
Data centre location
Does a data centre location matter? To an extent yes, but it is more about the resources available at a given location
than the location per se. Many MHP customers will see little need to visit its premises, except maybe during the
selection phase. For some time‐critical applications, such as share trading where split second timing can make a
difference, it is seen as preferable for it to be physically close to a data centre, hence the proliferation of them in
London. However, this can lead to its own problems, especially regarding power supply.
Power has rapidly become the limiting factor for selecting locations for new data centres, and one way to get around
this is to head for areas where there is excess supply; for example South Wales in the UK, where manufacturing has
declined, leading to excess capacity. Choosing such locations has the additional benefit of abundant cheap labour,
albeit with a certain amount of retraining required. There has been a trend by some to move to be near renewable
power sources, but as wind and fast flowing water tend to be in remote areas there is a danger that any
environmental benefits are off‐set by some MHP employees, who actually need to work at the data centre site,
having to travel further to get to work.
Another consideration is network bandwidth. MHPs need direct access to the high bandwidth internet backbone to
ensure high performance, often seeking to have two providers available to provide redundancy. This is a major
consideration for any MHP building its own data centre, but for those that work with co‐location providers, such
considerations will already have been taken in to account. MHPs that are also carriers, such as BT and Cable &
Wireless will, for obvious reasons, provide primary internet access via their own networks.
Table 3 shows the European countries where the MHPs covered in this report have data centres. As mentioned in
section 2, in‐country presence can be an advantage for local language and legal support.
Many MHPs are consolidating data centres; for example, IBM has reduced its number of data centres worldwide from
around 100 to about 30. It might be useful to show total data centre floor space under management or a measure of
available spare data centre capacity, but few MHPs make such figures public, and if you are entering a contract to use
shared infrastructure, then available space is irrelevant as you want it to be filled with state of the art hardware ready
and waiting to run your applications.



The UK’s ascendance as a financial services centre and the fact that it is well served by many global internet carriers
has led to a predominance of MHP infrastructure in the UK, this is especially apparent with the pure play providers.

Table 3: Location of MHP data centres

Czech Republic

Netherlands

Switzerland
Luxemborg
Germany
Denmark

Portugal
Romania
Belgium

Sweden
Norway
Finland

Ireland

Poland
France

Spain
Italy

UK
7 Global X
Attenda X X
NTT Europe Online X X X X X
Rackspace X
Savvis X
Atos X X X X X X X
BT X X X X X X X X
C&W X X X X X
Fujitsu Siemens X X X X X X X X X X X X X
IBM X X X X X X X X X
Logica X X X X X X X X
Orange (OBS) X X X
T‐Systems No data
Claranet X X X X X X
COLT X X X X X X X X X X
EasyNet X X X X X X
Global Crossing X X
Hostway X X X X
Security
For many organisations the fact that data is stored outside of their own physical premises when working with MHPs
raises concerns, but providing due diligence has been done in selecting a provider this concern is misplaced, especially
if they are complying with relevant standards such as ISO 27001. In fact the reverse is true; working with an MHP
should provide enhanced levels of security simply because the infrastructure it is stored on is housed in a secure
enterprise‐class facility and that those managing it have lot at stake if security is breached.
All MHPs provide fundamental IT security, including encryption, secure remote access, malware detection, firewalls
and so on, but the level of service offered and the types of products used will vary and in some cases there may be
additional charges for enhanced security.
Physical security is also an issue and gaining access to the physical infrastructure of an MHP will be harder than it is to
breach the premises of many SMBs.
Power supply and environment considerations
For MHPs, considerations around power supply are fundamental and when a new data centre facility is built or co‐
location provider selected, these data centres require a continuous and stable power supply. Most rely on taking
utility supply from the grid but have an emergency backup capability in place should the grid supply fail. This usually
consists of a huge array of batteries to keep things running for a few minutes whilst backup generators are started up,
usually powered by fuel oil stored on site for such emergencies.
As with the use of IT anywhere, MHPs are making more and more effort to make their use of power more efficient.
Hardware and software innovation helps with this and it is in the interest of MHPs to be using leading edge products


in this regard. Particularly for one‐to‐one hosting, MHPs sometimes base their charging on power usage (see section
4.3).
MHPs can drive environment messages around their efficient use of power; however some take it a stage further by
seeking to use only sustainable power supplies either purchased over the grid, or by locating near green power
generation facilities, such as eLINIA, which derives power from waste, and Centrinet that makes use of local
windmills. As has been said earlier, a remote location for a data centre near a green power source is all well and good,
providing all the saved omissions are not cancelled out by employees that have to work on site commuting long
distances.
Claims to be carbon neutral should be examined closely; for example some environmental claims are founded on
carbon off‐setting (planting trees etc. in lieu of energy use), which is considered insubstantial by many environment
groups.
Finances
Finally, check the state of a given MHP’s finances. In the dot‐com
crash at the turn of the 21st century many MHPs went out of “Few organisations
business or were acquired. The market is more mature now and
the suppliers covered in this report are all substantial organisations revert to in house
so this is less of an issue, but should still be a consideration. management once a
partnership with an
6 Conclusions MHP has been formed”
Whether your organisation is a large enterprise, an SMB or an ISV,
there will be benefits to be found in working with MHPs for
sourcing part if not all of your IT infrastructure requirements. Finding the right MHP will take a degree of due
diligence. The partnership that is formed needs to be long lasting, as changing your MHP is possible but undesirable.
There is plenty of choice in Europe from the managed hosting specialists to the systems integrators, ISP and network
infrastructure providers that provide managed hosting as an add‐on service. Those already working with MHPs
recognise the benefits through better cost management, improved customer service and more reliable service
provision. Few organisations revert to in‐house management once a partnership with an MHP has been formed.



7 MHP summary descriptions
Quocirca has defined four types of MHP in section 4.1 of this report. Entries for vendors for three of these types are
listed here by category. A final section lists what Quocirca has termed “ones to watch”, which includes smaller
providers which cannot be considered pan‐European or those who have short term plans to set up in Europe.

7.1 Type 1—pure play MHPs
A pure play MHP has operations and a sales process that is geared for all sizes of business and can scale up their
services for customers as they grow. For a managed hosting service provider to say it serves the SMB market must
mean that it has the sales process in place to deal with such business.

7.1.1 NTT Europe Online
As its name would suggest, NTT Europe Online (NTT) is the European online services subsidiary of the Japanese
communications giant NTT. NTT Europe Online was formed in 2006, 6 years after NTT acquired Verio, a managed
hosting service provider with active operations across Europe. NTT has expanded the original service and now has
data centres in Germany, France, UK, Spain and Switzerland, giving it local language and contractual support in all the
major European markets.
NTT targets both the enterprise and SMB markets with a range of services, including the straight provision of hosted
infrastructure and other services such as application management, video archiving, threat management and
virtualisation services. NTT also works with ISVs and is a delivery partner for IBM, Microsoft, Sun and Oracle.
Managed hosting, provided using a shared infrastructure, constitutes 90% of NTT’s business and it has been growing
at about 40% per year. It sees cloud computing, and in particular private clouds, as a natural extension of this. 50% of
its infrastructure is Microsoft Windows based and 45% Linux, the remainder being UNIX.
NTT is ISO27001 certified and is seeking PCI certification. Its engineers are trained to ITIL® v2/v3 level. It has various
pricing models based on per transaction, per volume of data processed, per unit of processing time used etc.
depending on requirement. NTT sees cloud services as an important next step in its evolution and will be launching
new services in 2009 with a focus on security and reliability.
http://www.ntteuropeonline.com/

7.1.2 Rackspace Hosting
Headquartered in the UK, Rackspace Hosting Europe provides managed hosting, email hosting and cloud services
across Europe, Middle East and Africa. In 2008, Rackspace opened a new 4,600 square meter data centre in Slough
(UK) to supplement its facilities elsewhere in the UK, USA and Hong Kong. All of its data centres are SAS 70 compliant.
Traditionally Rackspace Hosting has provided dedicated servers to enterprises, SMBs and ISVs, offering platforms
based on Microsoft Windows, Red Hat Linux and VMware.
In the last few years Rackspace has developed a cloud platform known as Mosso, which gives customers the cost
benefits and scalability of a virtualised infrastructure. It has three cloud services: CLOUD Servers, a Linux development
and deployment platform; CLOUD files, a storage and content distribution network; and CLOUD Sites, a deployment
platform for specific supported technologies such as PHP, MySQL, Python, .NET, SQL Server and IIS.
Rackspace is noted for what it calls “Fanatical Support®”.
http://www.rackspace.co.uk/support/



7.1.3 Savvis
Savvis provides a wide range of hosted data centre services from co‐location through to cloud offerings, which it has
had for over 4 years. Shared infrastructure services are built using Savvis’s flexible service model based on standard
components. Savvis provides its services to customers across Europe and beyond, but it has core strength in the UK.
Its main data centre infrastructure is in the UK with points of presence in Europe. It has recently built a new state‐of‐
the art facility in Slough in addition to data centres in Reading and London.
Savvis’ focus is principally on the enterprise market, where it has always provided dedicated hardware services,
enabling its customers to consolidate multiple data centres into a single Savvis facility. Over the last five years Savvis
has moved more and more into the provision of shared and utility based infrastructure. It has announced two Cloud
Compute offerings, which have been modelled on its successful heritage as a utility computing provider. “Dedicated
Cloud”, where servers are provided on a one‐to‐one basis with other infrastructure shared and “Open Cloud”, where
everything is based on shared infrastructure.
Savvis’ data centres in Europe are all ISO27001 accredited and SAS 70 compliant. Savvis follows ITIL® standards and
also helps some of its customers to achieve PCI compliance.
http://www.savvis.net/

7.1.4 Attenda
Attenda brands itself “The always on Managed Services Company”. It has four data centres in the UK and Germany,
providing services targeted at the mid‐market and ISVs. Attenda is part of Microsoft’s incubator program for ISVs
wanting to move to a SaaS model.
Around half of Attenda’s business is the provision of hosted servers on a one‐to‐one basis, but it also has a sizable
customer base using its shared infrastructure and is developing a cloud platform where it expects to see the most
growth in the next few years. The majority of its customers use a Microsoft based software stack.
Attenda has achieved ISO 27001, IS0 20000, ISO 90001, PRINCE2, ITIL® v2/v3 and Carbon Neutral Office compliance
for all its data centres and is working towards full PCI compliance. This all means Attenda has tight process control.
It offers a number of pricing models, including price per item of hardware, price per user, price per transaction and/or
a fixed price for agreed services over the length of a contract.
http://www.attenda.net/

7.1.5 7global
7global is a UK‐based provider of managed hosting services focused almost entirely on the provision of Microsoft
infrastructure and applications, although its provision of shared infrastructure is achieved using VMware for
virtualisation. Its data centres are all fully ISO 27001 compliant.
7global believes growth will mainly come from the provision of application‐level services, for example Microsoft
Dynamics CRM, SharePoint portal and Exchange email, rather than at the pure infrastructure level, although this is
currently the majority of its hosting business. 7global is an incubator partner for Microsoft independent software
vendor (ISV) programme.
For infrastructure provision, 7global provides fixed price contracts for agreed resources over a given period of time,
whilst application‐level services are charged on a per user per month basis.
http://www.7global.com/



7.2 Type 2—systems integrators that offer managed hosting as part of a broader service offering
Some organisations that provide managed hosting services are not really interested in selling them as standalone
services, the provision being embedded in larger contracts around IT delivery. Some of the big systems integrators,
such as CSC and HP/EDS, fall into this category and are not covered in this report.

7.2.1 Atos Origin
Atos Origin is a global systems integrator that does well over 90% of its business in Europe. It is principally focused on
the enterprise segment and sees managed hosting as part of a broader services engagement. IT has 31 data centres in
Europe.
Atos has reached its current size through merger and acquisition and its data centre portfolio reflects this. However,
Atos has striven to ensure a single standard across all data centres which are all managed to ITIL® v2/v3 level to
ensure what Atos calls a “continuous service delivery model” (CSDM).
Its history of serving enterprises has left Atos with a sizable mainframe customer base and 50% of its managed
hosting revenue is mainframe‐based, the majority of the remainder being Windows and UNIX. Most is based on
dedicated hardware, either co‐locating equipment owned by customers and managing it for them or provision of one‐
to‐one utility servers owned by Atos. There are plans to provide virtualised hosting on a one‐to‐many basis.
Traditionally Atos has had usage‐based pricing but for more dynamic delivery it uses a system called MOOD (managed
operations on demand), whereby the customer pays a base price and what they pay is adjusted each month
depending on whether they have over or under used the service. Atos has recently implemented a pay for use pricing.
Atos has a green IT initiative, called H@RMONY, for advising its customers and ensuring good management of Atos’s
own IT infrastructure.
http://www.atosorigin.com

7.2.2 BT Global Services
Despite the “B” in BT standing for British, since its privatisation in the 1980’s BT has expanded through acquisition and
organic growth to become a truly global operation. It has data centres in all the larger Western European countries
and parts of the Americas and Asia Pacific.
Such growth means that the degree of standardisation across its data centres varies considerably, so BT has put in
place a program it calls UNITE aimed at ensuring common standards and levels of operating efficiency. Whilst this
means services will vary from one country to the next, this will be hidden for those that engage with BT through its
virtual data centre programme (VDC).
VDC customers have a choice of a Windows or Linux software stack, for which it charges on a per virtual machine, per
year basis with an increment for gigabytes of data stored. BT has historically provided one‐to‐one hardware server
hosting, including mainframes where required, but it expects high growth to come from VDC. BT sells its hosting
services direct to enterprises and to SMBs via its retail channel.
As BT owns its own network, it is a good choice for those who require a strong SLA for network performance across
multiple countries. BT claims that 42% of its data centre power supply is from renewable sources and aims to deliver
ever better environmental standards as outlined in its “Society and Environment Report” available at:
http://www.btplc.com/Societyandenvironment/ourapproach/sustainabilityreport/index.aspx



7.2.3 Cable and Wireless
Cable and Wireless (C&W) is a global telecommunication network provider that also provides managed hosting in
Europe as part of its broader data centre to desktop IT consolidation services. The majority of its hosting business is
the provision of dedicated infrastructure to large enterprises and government bodies; with the latter there is
sometimes limited sharing between related organisations.
There are some limits in its software infrastructure provision; for example only SQL Server and Oracle databases are
supported. It also offers application‐specific services such as hosted Microsoft Exchange and Citrix server based
computing.
C&W data centres are managed to ITIL® level 2 and are all ISO27001 compliant. It is a Microsoft gold partner and 80%
of its deployment is Microsoft based, the remainder being Linux and UNIX.
www.cw.com

7.2.4 Fujitsu Services
In March 2009, Fujitsu announced it was integrating its former joint venture operation with Siemens into its own
operations and, in EMEA, this means with its IT Services arm, Fujitsu Services. Whilst Fujitsu is a Japanese company,
its strength in Europe has been largely down to the acquisition of UK‐headquartered ICL in 1990. This history leaves
Fujitsu with a sizeable legacy business of hosting VME‐based ICL mainframes. Its historic strength lies in providing
hosting services to enterprises although it also provides services for SMBs and ISVs.
Fujitsu has 38 data centres in Europe, with locations in all the major Western Europe countries. Through these it
provides one‐to‐one hosting services and shared hosting service via what Fujitsu calls IaaS (infrastructure as a
service).
As it sells hardware as well as services, Fujitsu favours its own kit when customers do not have a preference and its
infrastructure is based on Fujitsu servers running a range of either Windows, Linux or UNIX based software stacks—
Fujitsu reports its business growth in all 3 areas with Microsoft being the strongest.
Its data centres are ISO270001, SAS 70 and ITIL® v2/v3 compliant. It uses a range of charging models, ranging from
per item of hardware to per transaction and unit of power consumed.
http://www.fujitsu.com/global/

7.2.5 IBM
IBM provides managed hosting services as part of its systems integration arm, IBM Global Services (IGS). IGS has 11
data centres in Europe, having consolidated from over 100 in the late 1990s, improving its already respected service
levels.
IBM’s managed hosting services are aimed mainly at its enterprise customers, although it does serve small and
medium sized businesses but mainly through the provision of specific hosted applications servers, for example for
email and CRM.
IBM has over 90,000 servers under management, with around 70% running Windows, 25% UNIX (mainly IBM’s own
AIX) and just 5% Linux.
http://www.ibm.com/



7.2.6 Logica
Logica is a pan‐European systems integrator, which doubled in size in 2002 by merging with the Dutch consulting
giant CMG. In 2006, it acquired WM‐Data, a Nordic SI, which brought with it further infrastructure management
capabilities. Logica offers managed hosting services to its customers as part of broader systems integration
engagements. Its focus is primarily enterprise and public sector where it offers a broad range of services from pure
infrastructure provision to more application‐oriented services.
Logica’s long history leaves it with a legacy mainframe hosting business. It still sees some growth in demand for
hosting and managing customers’ own kit and one‐to‐one hosting, but 50% of its managed hosting services are now
based on shared infrastructure, where it sees strong growth, and expects this to evolve into a cloud‐based offering. It
charges for its hosting platform on a fixed price basis.
All data centres are ISO27001 and managed to ITIL® level 2, with level 3 training in progress. SAS 70 compliance is
offered, but only where the customer demands.
http://www.logica.com/

7.2.7 Orange Business Services
Orange Business Services (OBS) is part of the France Telecom Group. It has data centres in France, UK and
Switzerland. On a pan‐European basis its services are targeted primarily at large enterprises, although in France it is a
prominent provider to SMB and public sector customers.
Its services include both one‐to‐one hosting and shared infrastructure, including Microsoft, Linux and UNIX based
platforms. It reports growth in demand for Linux but says that the biggest growth area is for virtualised infrastructure,
whatever the operating system.
All its data centres are SAS 70 certified and OBS has achieved ISO27001 and ISO20000 compliance. Its global
management procedures are aligned with ITIL® v2 best practice and ITIL® v3 is under consideration. In the past OBS
has offered mainly fixed price contracts but is moving more toward per MIP or per user pricing.
http://www.orange‐business.com/

7.2.8 T‐Systems
T‐Systems provide a wide range of hosted services as part of its broader IT services delivery focussed mainly on
enterprises. T‐Systems’ presence is mainly in Germany and Eastern Europe, where it focussed its main effort in selling
its hosted services. T‐Systems did not provide any direct input for this report.
http://www.t‐systems.com/


Microsoft Word - Quocirca - Managed Hosting in Europe - June 2009

Microsoft Word - Quocirca - Managed Hosting in Europe - June 2009

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