If you have the capital and experience, setting up your own web hosting company can be a fast route to a quick buck. With the internet growing at an exponential rate, good, reliable hosting companies are in big demand. However, do not think that this is some kind of turnkey business. Operating your own web hosting company can be challenging and will require experience and know-how to maintain the systems and to ensure your servers run at maximum efficiency.
What is the difference between my own hosting company and reseller hosting?
Reseller hosting is basically where you sell server space on behalf of other hosting companies, and manage the accounts you set up through a control panel interface, but without root access. This can be a good place to start if your tech skills are not so strong but the service you provide will only be as good as the host company. Virtual dedicated servers will give you root access to the server and will give you the benefits of reselling with added flexibility.
What do I need to get started?
- Legal Status: First up you will need to ensure your business is legitimate and running in accordance with the law of your country. Check out any licenses, permits or certifications you may need to start-up.
- Capital Outlay: A data center will be expensive to fit out so you will need a significant amount of capital at the outset. You may be able to save money if you can buy into an existing setup, however you should check out the condition of the tech inside and the cost of upgrading.
- Premises: Of course fundamental to your business will be suitable premises. You will need a site which is clean, offers climate control, is secure and spacious enough to accommodate all the equipment whilst leaving enough space to be able to carry out maintenance and repairs. You should also check out any necessary permits required to operate your business, along with access, power and a fast internet connection. This is not a business you can run from your garage!
- Staffing: Running the center will almost certainly require a number of staff to ensure all systems are kept up to date and to minimize downtime. You may need to hire in administrative staff to handle the day-to-day stuff and you can look at external companies to handle support questions and billing.
What technology will I need to get started?
The space on a server can be divided up to meet individual client’s requirements, meaning one server can host a number of accounts. Determining how many servers you will need relies on you being able to calculate how many active accounts you will need to make a return on investment. You will also need your hardware to be reliable, secure and up-to-date in terms of its construction (internal hardware, processors etc).
You will basically have three options when it comes to servers – buy, rent or lease, each of which come with different pros and cons.
- Buy: this is the most expensive option, but you can get your servers custom built to meet your needs and budget. You can also have your servers setup under a colocation services agreement with a nearby data center which will give you 24/7 access as well as power, security and a network connection. You won’t have the expense of finding and paying for premises but you will be responsible for monitoring and maintaining your equipment.
- Rent: if you rent, the data center will own the hardware and will also be responsible for maintaining it for you. The cost of renting from a data center will also be cheaper because they will be able to purchase hardware in bulk at lower prices.
- Lease: some computer manufacturers will provide lease-to-own plans which can be a cost effective option.
You will need to look at the disk space of a server to be able to determine if it will be big enough for your needs. Hard drives come in all different sizes and will determine how many websites can be hosted on one server. The size of the RAM is also important as many websites will use temporary files and applications. If a server has insufficient RAM it could fail. Bandwith and the internal CPU are also important considerations as these will determine the ability of your servers to handle web traffic in comparison to the size of the websites hosted.
Selling your services
Web hosting is generally bought and paid for online so you will need your own website to market your services and to allow clients the ability to purchase server space, set-up accounts and access your support desk. You should also provide a ‘backend’ interface so clients can upload their files and maintain their sites.
You should also give clients the ability to pay online too through third party payment portals such as Paypal. Accepting payments online is convenient for clients as well as convenient for you and many payment portals will allow recurring billing to be setup meaning payments should always come in on time.
Although you can run your business entirely online it is always good to provide a free phone number and access to support staff so clients can contact you directly with any questions or to open an account.
As with any business, setting up your own web hosting company will take time and a significant amount of capital outlay. You will need to establish your reputation and be able to guarantee customers that downtime in your servers will be minimal and that support is available 24/7. You will also need to be able to offer the latest technology and services to meet a range of client needs such as cloud hosting, collocation and dedicated servers, as well as give assurances your systems are secure.
The hosting industry is very competitive with some big players and it can be hard to compete for clients. It can therefore be a good idea to focus your business on just one area first before expanding your reach as your business grows. Remember in this business reputation is essential so starting small will help to build trust and credibility making it easier to attract clients in the future.