The difference between ISPs and hosting companies: What every business needs to know

When you’re taking your business online, you’ll often find that you need to deal with two different companies; one is a hosting company, and the other is the Internet Service Provider (ISP). There’s a little bit of confusion between the two, because there are sometimes overlaps in terms of the services they both offer. However, they are ultimately different types of business, and having your company online requires that you interact with both in most instances.

What is a hosting company?

Behind almost every website that you’ve ever visited sits a hosting company. That’s what they do – they host websites, and while it is technically possible to do that yourself, for most businesses (especially smaller businesses), it’s sometimes not worth the expense to do it in-house.

A hosting company provides what is known as a ‘server’ – a box that sits in a data centre somewhere, and through which your website is delivered when someone visits. They effectively create the link between your website’s raw data and the customer, wherever they are in the world.

Obviously, that server is critical – if it has a fault or outage, no one can access your website, and if you happen to sell products through your website, that means that for a period of time your business will not be able to sell to the customer. It’s also a bad look for your company – customers don’t tend to trust businesses that don’t have reliable websites.

The reason hosting companies are so popular is that they also offer support services, including the maintenance and upkeep of servers, so that your website’s uptime is as reliable as possible. Many hosting companies also offer support with setting up domain names, and some even offer SEO and other low-level marketing support to help get your website in front of as many people as possible.

What is an ISP?

ISP stands for ‘Internet Service Provider’, and in simple terms ISPs are the ones that give you access to the internet. After signing up with an ISP, you’ll likely be given the option of purchasing the required router/modem through them, or it may be offered as part of your plan when you sign a contract. This router/modem is needed for your business to connect to the internet. From there, you’re connected and can start browsing the internet, using the bandwidth (data + speed) that your ISP offers you.

With the nbn™ being installed across Australia, ISPs will act as the ‘middle-man’ through which you can access your nbn™ service. NBNCo will not directly sell to customers in Australia. Rather, they provide the service to the ISP, which then sells it on to you.

Because ISPs are right at the entry point to the internet, they also typically offer customers a host of other services. One of the most common ‘add-ons’ is phone lines and communication solutions. The nbn™ replaces existing telecommunications infrastructure, meaning that people can no longer use their traditional phone lines once the nbn™ has been installed. ISPs will typically offer services that leverage the internet connection they provide. For residential users, ISPs also typically offer entertainment packages that include subscription television channels and sports.

So… what’s the difference between an ISP and a hosting company?

To put it very simply, ISPs give you access to the internet, while hosting companies give you access to the websites that they host on their servers. However, there is overlap, and it’s important to understand why that overlap happens, and how it plays out.

As part of the services that ISPs offer, website hosting is a common one. ISPs are familiar with the ins-and-outs of the internet and run plenty of servers, so it’s a natural extension to also offer website hosting services.

If you have particularly complex hosting needs; for example, you’re running a news media outlet that relies heavily on video and gets a lot of traffic, or you’re running a bustling eCommerce store, then the hosting services that an ISP offers might be inadequate. Generally speaking, ISPs don’t offer large amounts of data for hosting, so if you get a lot of traffic you’ll find that the traffic exceeds the hosting plan that you’re on, meaning that it will be taken offline.

However, if your hosting needs are more modest, then an ISP might be the better way to go. The reason is simple: cheaper web hosting services tend to be advertising-supported, and you’ve got no way of controlling the content of that advertising. You may well end up presenting your customers with objectionable content, or even ads for your competitors!

You need an ISP. There’s simply no other way to access the internet. However, your company may or may not need a hosting company. Ask the following questions based on the web hosting that your ISP offers: Is there room for my site to grow? What kind of uptime am I promised? Is the data on my website going to be secure? What is the nature and design of my website?

If your ISP’s hosting service is enough to answer each of those in the positive, then your business probably doesn’t need a hosting company just yet.

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