When a respected analyst house like The Yankee Group suggests that the web hosting market in Western Europe is set to be worth around £5.2bn by 2006, it is little wonder that there are so many companies offering their outsourcing services and promoting their applications. After all, with such a lucrative pot of gold on offer, who would not want to be involved? Web-hosting firms surely have never had it so good.

The reality at the moment, however, is somewhat different. The market has been through considerable turmoil during the past 18 months, with major overcapacity in data centres leading to many of the original companies either going out of business altogether or finding themselves having to go through painful restructuring and reduction in size and ambition.

The message that has been sent out to the business community as a result has been, in part, a negative one – if you hand over your web presence to a third party to look after, be careful, because there is a danger they will not be around the next day.

This is a pity, because for many law firms the decision to outsource their IT infrastructure is still possibly the wisest one they can make. The benefits are not only in terms of cost, but also for improving security, which must be a key concern. While security is a main issue, outsourcing also offers expertise in technical support, connectivity and physical infrastructure, as well as removing the administrative headache of running a 24/7 operation.

Firms have invested so extensively in new technology infrastructure that they now find the costs of running it in-house outweighs the benefits. For those firms, outsourcing is often the best solution.

Given the two contradictory situations – a market ripe for outsourcing, but a sense of mistrust of the outsourcing industry – what should a law firm look for in deciding whether or not to outsource its IT?

The answer is a mixture of the technical and the practical. Technical in that a firm must appreciate the applications available to it and pick the one most likely to suit its needs and practical in that it should go to a hosting company that not only understands its business, but can be relied on to be a trusted long-term partner.

Part of this reliability is being able to offer comprehensive and stringent service level agreements, based not only around the performance of the internet connection or systems hardware, but also around business processes.

Internet service providers (ISPs) need to offer comprehensive infrastructure monitoring and maintenance for their customers, every minute of every day of the year, as well as the resilience in terms of machinery that can offer genuine peace of mind.

And, of course, all customers need top-level protection at the 'virtual' level. With this, outsourcing becomes a much more attractive option and firms should seek out the best hosting application for them. The most important consideration when making this move is the impact your web presence has and what you are aiming to achieve. Objectives range from a simple point of presence on the internet through to a fully functioning e-commerce operation designed to generate revenues from external customers.

A site set up for e-commerce, for instance, must consider important issues such as payment mechanisms and credit card security. Companies must also ensure their ISPs support their technologies and operating systems and that the hosting solution they choose is appropriate for the task at hand. To deal with these differing issues, a variety of different types of hosting solutions exist. These include fully managed hosting, a dedicated server, a co-located server or a shared hosting option.

Fully managed hosting
Although the most costly set-up, companies lacking net experience have the most to gain here as the site is handed over 'lock stock and barrel'. Everything is managed for you, from maintenance issues such as monitoring and administration support through to crucial areas such as security. It is a 'bespoke' service with dedicated experts on hand 24/7 should things go wrong.

Dedicated server
Under this arrangement, companies may choose to lease a server with the operating system and hardware specially configured to their needs. The host is then responsible for supporting the system and hardware and may well offer technical support, while the customer is responsible for maintenance.

Co-located server
Co-location is a more basic option, with the onus placed on the customer in terms of expertise and maintenance. Here the hosting company will provide the 'rack space' as well as physical requirements like power supply and air conditioning, network feed, fire protection and building security. The hardware and software is generally owned, installed and managed by the customer.

Shared server
Companies with minimal experience or requirements and financial resources can go for a shared hosting option, where they can develop entry-level websites without the expense of having to buy a web server. While the most cost effective option, this does have limitations, particularly with regard to security, given that sensitive information like financial details are less protected.

Whichever option suits your requirements, it is imperative to ensure that you feel comfortable with the company itself. Does it understand your business needs? Does it care about service level agreements? Is it likely to have the solidity and credibility that will reassure you when handing over responsibility for a crucial part of your business?

Perhaps most important of all, is it a hosting partner with which you can grow? Your hosting requirements may be limited at present, but who knows where your business may be in one, two or five years time. Scalability is crucial. Having a hosting company that can accommodate that growth and provide a service to match your demands is probably the most important investment decision you can make.

For those looking to enhance their IT systems, outsourcing can be one solution that can provide massive benefits to your firm. By choosing a reliable ISP you can remove the burden of complex IT systems and gain peace of mind.

Simon Jackson is business manager at Star Internet.