So you want to set up your own hosting company?

So you’ve sat down and decided to start offering hosting to others. You already know it’s a saturated market, however you’ve got your usp (unique selling point) all sorted out.

Then you realise there is a myriad of options out there to go for depending on your budget and what profit you would like to make. This article outlines the different options you could go for, whether you are just starting out or you have actually reached critical mass and you are ready to jump into setting up your own datacentre (which isn’t a task for the faint of heart).

Shared

Let’s start at the beginning. As you probably already know, you are sharing the server you are on with up to at least 100 other customers. This is fine when you’ve just got a couple of websites, you won’t run into any problems.

Reseller

Shared accounts aren’t really suitable for having more than one client of your own on the server you are sharing with other customers. This is where reselling comes in.

Basically you have a bigger share of the server from your hosting company, they give you a preferential rate, then you resell that space to your customers ideally at a profit. You will still however be sharing that server with lots of other resellers. So you have to be careful with how much you give to your clients, try to avoid overselling. Overselling is basically cramming as many clients on to your reselling space as you can, hoping that they won’t max out the plan that they are on. It has caught many resellers out in the past and they have lost customers.

VPS

So your hosting company is expanding at a nice rate, however you are close to using up all the resources that your reseller account has to offer, now what? Do I keep upping my reseller account, or do I take it to the next stage and move to something like a VPS (Virtual Private Server)? This is one stage down from a dedicated server, which I will go into further detail later on in this article.

Now you have an even bigger slice of the pie, there is now only probably 2 or 3 other VPS accounts on the server, so now you could offer more plans to your potential clients, again avoiding overselling. Of course at this point, your costs are going up, so either you have to start charging your customers more, or you try and cram more customers on the server. Or as already stated you could offer more plans.

Also this is where it gets a little more complicated, you actually now have root access to the operating system on your VPS. So you can add any applications you like or remove certain options within the TOS of your VPS provider. Now if you are a linux/unix ninja then you can go for a cheaper unmanaged plan, which means anything that goes wrong you have to fix yourself, or your VPS provider will charge you to fix it.

Many people prefer to go for the managed route, so if something does go wrong it can be put right fairly quickly. Managed is more expensive, so again this will have to be factored in when costing up your plans.

Dedicated

Now your company is really blossoming, you now decide that you no longer want to share your server with anyone else, so now you go for a dedicated server, this is the actual physical server itself, you also have direct access to the operating system. Normally your provider will only install the basic os (operating system) for you, then it is down to you to install any other services you require. For example if you want your customers to use a control panel like Cpanel then you will have to pay for a licence to install it on your server, especially if you have an unmanaged dedicated server.

If you would like to entirely concentrate on growing your business even further you maybe better off with a managed server, again, quite a bit more expensive, so again factor that into the cost of your plans. Your provider will take care of any os updates etc..

Co-location

This is similar to dedicated the only difference is you provide the server yourself. You physically install your server into your hosting provider’s datacentre. Then you pay a set fee each month or each year to use your provider’s facilities, i.e. electricity, network connection and bandwidth.

The downside to this is, you have to replace any parts yourself, so this could potentially mean you visiting the datacentre at 2am to replace a faulty part or just to reboot the server because it isn’t responding to the remote reboot command. So when thinking about a co-location facility, make sure it is almost on your doorstep.

Now if you’re still not satisfied and you think you can give the big boys a run for their money you can build your own datacentre, or convert a warehouse into one, that’ll be covered in the next article.

[Chase]

Very nice again

Building a Data Centre is here - Building your own datacentre