Is IT More Expensive in Serviced Offices?

Posted by Offices North West
September 29, 2008

IT’s [pun intended!] a question that comes up all of the time in serviced offices and it generally leads to confusion, so we’ll try and set the record straight on what sort of IT service to expect and what you’re going to be paying for.

10 years ago, broadband was a pipe dream for most, with the home dial up services of Freeserve, BT and AOL dominating the market.  In the business world, things were a little further ahead and companies began to invest heavily in IT with connections over fibre, secure firewalls, and speeds in the megabytes as opposed to kilobytes.

However, there was seemingly a period of convergence with the home market catching up and now broadband speeds of up to 24 Mb are advertised for home users.

It’s the word ‘seemingly’ though that is the key one in this instance.  Although the potential speeds available at home are up there with business level services, it’s how they are delivered, maintained, secured and managed that makes all the difference between home and business services.  

So, when you’re comparing a home package for £15 – 20 per month offering up to 8mb with a 4mb shared service in a business centre for £30 there are a few things that you should consider:

  1. Is it guaranteed bandwidth?  Most home services come with a lot of small print where your ‘up to 8mb’ depends on how far you are from the exchange and how many users there are.  Serviced offices will have a guaranteed connection where 4mb is dedicated to that building – not the entire neighbourhood – and it speeds will not depend on how far the centre is from the telephone exchange.  They can manage exactly how many users are on there and therefore the speeds.
  2. Who looks after things if it breaks down?  A business centre connection will have a service level agreement (SLA) that determines response times in case of faults, which is generally 4 hours.  If your home connection goes, it will generally involve a call centre and lead times in days rather than hours.  You really can’t put a price on getting your emails and web access up and running quickly.
  3. Is it secure?  Getting a virus on a home pc is bad enough, but imagine if your business computer went down due to a virus or it was hacked.  That’s where a firewall comes in.  Business centres will normally provide a managed firewall so they can open ports if necessary, and block others where there is a risk.  It really gives you peace of mind and is crucial for any business.
  4. What are the install costs, lead times and contract lengths?  For your own connection you’d be looking at perhaps £100, 28 days, and 12 months respectively.  In a business centre it could be anything from £0, 4 hours, and 1 month!

This is only a basic look at the differences, but it really should open your eyes to the IT service you’ll expect within serviced office space.   Perhaps that extra £10 isn’t so bad after all!

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Comments

I have heard that serviced office providers make money on services such as broadband, for example are you allowed the get just one connection with a wireless router so that only one connection is needed or do you insist that broadband is charged per workstation?

Also are telephony costs more expensive than a regular business line?

Comment by sjr on October 2, 2008 @ 4:36 pm

Most serviced office providers will make some money on broadband but not to the detriment of clients.

The office provider will invest heavily in IT equipment, cabling, and installation initially. That would easily be over £20,000. Then the on-going rental and support would be upwards of £10,000 per year for a 10mb circuit.

Individual clients would have access to this service usually at around £25 – £50 per person per month. Gradually the business centre will recoup all their initial costs, usually over a period 3 – 5 years, and be able to cover the yearly rental. Remember though, if the centre isn’t full they’ll be subsidising this service heavily, which would also be the case if every client came in and put a wireless network in – for example 35 clients paying for one connection each at £25 per month would bring in £10,500 and that would barely cover costs.

Any money that is made is more than likely to be re-invested in future to keep the systems up to date and way ahead of what small businesses could have access to outside of a business centre so it is still a good deal.

With regards to call costs, most are on par with regular business services and many will undercut BT business services by anything up to 20% (or 100% in YourSpace!).

Business centres are businesses and need to make money to survive, grow and pay any shareholders, so it is not unreasonable to expect them to be making a profit in some areas.

Comment by Offices North West on October 2, 2008 @ 5:35 pm
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