CIO Fred Johnson oversees FTD.com's floral delivery e-commerce site from his office in Downers Grove, Ill., but you won't find his Web servers there. Nor will you find them in Toronto, where FTD.com's application service provider (ASP), Novator Systems, designs the content for the site, uses its proprietary e-commerce applications to process orders and manages the network. FTD.com's Web servers actually run in a secure cage at a data center in Jersey City, N.J., operated by another service provider, Exodus Communications.
During the past three years, ASPs have moved from a simple Web hosting model, with a single Internet service provider's Web server at one end and a user's browser at the other, to a complex interconnected mesh of applications and services.
And the ASP with which you sign on may not be providing all of the services. Other providers often play a role in areas such as hardware infrastructure, network services, streaming media delivery and performance monitoring. So the ASP that hosts an enterprise's e-commerce Web site, for example, may actually be running it on another vendor's data center hardware and using yet another vendor's domain name services.
Companies that outsource need to know how all of those associations work, says Johnson. In the case of FTD.com, which is the online division of Florists' Transworld Delivery Inc. (FTD), the interrelationships can directly affect the bottom line.
The FTD.com system is complex and includes databases that hold pricing and product information, hosted e-commerce applications that process customer transactions, a back-end credit card verification system and a content-delivery network service that lightens the load on origin servers during peak periods. A single service-level agreement (SLA) with Novator helps manage the overall relationship, but if, for example, something goes wrong on Valentine's Day, no SLA can compensate for the lost revenue, Johnson says.
The larger ASPs are bringing many of these services under one roof, but even large ASPs use specialty service providers for things like streaming media, says Laurie Seymour, an analyst at IDC in Framingham, Mass.
And bigger may not be better if the ASP doesn't understand your business. Before signing on with any service provider, you should determine your primary service provider needs, advises Russ Lewis, executive vice president and CIO at GFInet Inc. in New York. Lewis, whose firm provides applications over the Internet for wholesale financial, energy and commodities traders, says he recently moved his online systems from Exodus to Metromedia Fiber Network Inc. (MFN) in White Plains, N.Y., because he felt the latter company was better equipped to manage GFInet's applications.
But while MFN has the optical network infrastructure to support the network, it manages GFInet's applications through managed service provider SiteSmith, which MFN acquired in February and operates as a separate business unit in Santa Clara.
Many xSPs, One SLA
Johnson turned over management of FTD's e-commerce applications, content-delivery network and performance measurement to Novator and established one SLA. Now, FTD.com has "one throat to choke" when something goes wrong, according to Seymour.
But Johnson doesn't think of the relationship in those terms. Over time, Novator has won his trust by helping him build a site that turns a profit and that on Valentine's Day this year was the fastest home page of any floral retailer on the Internet.
To make sure it can keep its promises to FTD.com, Novator has its own SLA with Exodus. Novator is also responsible for the content delivery services provided by Akamai Technologies Inc. in Cambridge, Mass., that FTD.com had once handled directly. Novator also has an SLA with Gomez Inc. in Waltham, Mass., to monitor FTD.com's network performance.
Johnson says it's simply more efficient to have Novator manage everything, although FTD.com could have used a large provider like Exodus to provide similar services.
"We provide [to FTD.com] a percentage of availability for the entire site," says Novator CEO Mark Fox. That service, he notes, includes applications on Novator-owned servers located in cages at the Exodus data center, as well as the caching service provided by Akamai.
Credit card verification and transmission of orders to FTD florists is handled by back-end systems at FTD.com's offices in Chicago, Johnson explains. Orders that come in over the FTD.com Web site, he says, are fulfilled by FTD florists, who receive order notification through FTD-licensed floral shops over a private network, which started as a wire service in 1970.
Johnson says that with millions of dollars in sales per day on the line, anything less than stellar performance from every xSP involved in the FTD.com site is unacceptable.
Johnson remains unshaken by the financial problems that have plagued Exodus, which houses FTD.com's e-commerce servers but he's prepared for the worst. "I'm not worried [about Exodus]," Johnson says, but he adds that he's ready to "compensate," should a problem arise.
Growing Complexity Creates Concern
The increasing complexity and interrelationships of hosted application services, whether they come from a single provider or multiple xSPs, strike fear into the hearts of IT managers, says Mark Shull, president and CEO of managed service provider Digex Inc. in Beltsville, Md. More applications and more providers mean there are more things to go wrong, he says.
And while each application may have 99.9 percent availability, Shull says, that doesn't necessarily translate into the same level of availability when you have interdependent multiple applications, either from one provider or many.
Novator relies on redundant servers housed at Exodus to mitigate risk for FTD.com and its other customers. But that may not be enough. Fox says that by the end of this year, his firm plans to duplicate its server farm at the data center of another provider "for a variety of reasons."
But redundancy is important, says Seymour. Adding another provider and duplicating hardware and applications across the data centers of multiple providers guarantee that if one firm has a sudden problem, business can go on as usual.
Choosing to send your applications out for someone else to host and manage "is still a scary proposition," Lewis acknowledges. To allay those fears, he recommends that companies conduct due diligence for any xSP relationship, including any that may hide behind a single SLA.
Lewis further advises that companies "look toward the bigger players; be interested in their balance sheets and who their backers are, who their customers are."
He also recommends avoiding small Internet hosting companies that say they can host mission-critical applications. If you did that, Lewis says, "you probably got hurt."