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Starting a Web Hosting Business from Scratch - Not Reseller

Suds

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Hello,

Does anyone have experience in starting/ running a web hosting business? I have an elegant solution to a persistent problem I have seen. But it requires that I own the servers and deploy my solutions on it. It might be easier to use AWS or another cloud service but it might cost a lot.

This is going to serve a very narrow market segment, so I do not want to buy an existing business. I would need to start from scratch.

If you could offer any advice I would be highly obliged.

Thanks,
Suds
 

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Owner2Millions

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Running your own server hosting business is going be expensive regardless. Your electric bill is going be high as well due to the server always having to be ran. Not to mention the amount of heat its going generate...... Also do you have the funds to purchase a server with decent power? Even if you build one its going cost close to 5 figures. Not sure if you thought about the scale....but....if your goal is to have as many customers as possible your going need a small server farm....
 
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Suds

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Oct 13, 2018
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Running your own server hosting business is going be expensive regardless. Your electric bill is going be high as well due to the server always having to be ran. Not to mention the amount of heat its going generate...... Also do you have the funds to purchase a server with decent power? Even if you build one its going cost close to 5 figures. Not sure if you thought about the scale....but....if your goal is to have as many customers as possible your going need a small server farm....
@Elbert Dockery Thanks for your reply. I had not considered the cost of electric bill. I am talking to a potential investor who would be able to fund the set up costs. Neither they nor do I have any experience in this area. However, we are keen to get this done asap. At this point I am trying to understand all the costs involved.

I will be doing more research in this area. Will update this thread with the information I find.
 

MoneyPhantom

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What holds you back from starting with an existing cloud service and switching to own servers as you grow?

Keep costs low, validate the idea and then scale. You'll also have some money to spend if you know there already is some monthly revenue (and enough demand in the market).
 

George Appiah

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I founded and sold a web hosting business... albeit a very small one: under 1k subs. So I'd like to think I know a thing or two about this industry. And being an engineer, I believe I know the tech stack very well.

I have an elegant solution to a persistent problem I have seen. But it requires that I own the servers and deploy my solutions on it.
Why?

Whenever I hear people say "I have to", it often boils down to slothful thinking, flawed logic or strong emotional attachment to something with no logic behind it.

Have you really subjected this to critical, logical reasoning -- and concluded that owning your own infrastructure is the only way... or even the best way to build this solution?

Can you play the devil's advocate and start from the premise that you don't need to own your own servers... and see if you can work your way back to justify that, indeed, you need to?

And can you share with us why you're so convinced the solution to this "persistent problem" requires that you own your own servers?

It might be easier to use AWS or another cloud service but it might cost a lot.
If cost is the only reason why you want to roll your own infrastructure, then I'm afraid you're yet to learn the ABCs of this industry. That, or, you're simply being delusional.

And if the only value you're bringing to the marketplace is lower cost, then I'm really skeptical of your solution.

Today you can get a highly performant cloud VPS with 2GB RAM, 1vCPU, 20GB pure SSD, and 20TB of bandwidth for as little as 2-3 euros per month from the likes of Hetzner and OVH.

Can you build your own hosting infrastructure from scratch and offer cheaper hosting? Sure. Digital Ocean did it seemingly overnight, and since then several copycats have come along.

But that would have to be on a massive scale, as Digital Ocean did.

@Elbert Dockery Thanks for your reply. I had not considered the cost of electric bill.
If you want to roll your own infrastructure to provide a hosting service, and you want to offer a fast, secure and reliable service, there's more to worry about than just the cost of electric bill:
  1. Redundant, independent sources of power
  2. Redundant, high-speed internet connectivity from different providers
  3. Routers, switches, racks, and other network gear
  4. Cooling
  5. Physical / perimeter security
  6. Tech team to manage all that and keep the heart beating
  7. etc etc etc
Frankly, very few "crazy ones" will go through this trouble these days. I'm hoping you're one of these "crazy ones."

Even the big corporations with the cash and staff are shutting down their data centers and moving all their workload to the cloud. Netflix shut down their last data center 2 years ago and moved to AWS. Hulu has done the same. AOL, Comcast, Vodafone -- all infrastructure providers, have switched off some of their own data centers and moved partially to the cloud.

The VC-funded startups and tech companies have also come to realize their value skew is not in the underlying boxes that power their SaaS platforms. That's why practically every startup leverages existing cloud infrastructure, instead of rolling out their own:

Pinterest, Airbnb, Snapchat, Spotify, Twilio, SoundCloud, Smugmug, GoPro, Instapage, Animoto, Adobe, AOL, Scribd, Slack, Zynga, Wix, PayPal, Twitter, Feedly, Evernote, Leadpages, Kinsta, Pantheon, Vimeo ...

... all live on someone else's servers. Yes, that includes hosting companies and site / landing page builders.

With all that said, note that there's a huge ocean between a "reseller" reselling a $15/month cPanel reseller account, and owning your own infrastructure. Perhaps you could fit yourself somewhere in-between:

You could...
  1. Co-locate your own servers in someone else's data center, and pay monthly co-location fees (depending on how much rack space you're using, power consumption, connectivity needs, and whether or not you're going to need tech hands... especially in emergency situations)
  2. Rent a private cloud (complete racks of gear dedicate to you) from a data center or cloud provider
  3. Rent individual dedicated servers from any of the traditional hosting companies and pay monthly rental fees. You'll need to decide whether you want managed or unmanaged (ie self-managed) servers. The latter can be super cheap, but you're responsible for babysitting the server.
  4. Rent traditional VPSes or cloud servers. Again, your cost will vary greatly depending on whether you go for managed or unmanaged (ie self-managed) hosting plan.
If you could share a bit of the specific problem you're tackling or your proposed solution, perhaps people here much smarter than I could chime in. Feel free to PM me if you want.

Whichever path you decide, the most important thing is to KEEP MOVING!
 
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Suds

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I've Read UNSCRIPTED
Oct 13, 2018
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New York
What holds you back from starting with an existing cloud service and switching to own servers as you grow?

Keep costs low, validate the idea and then scale. You'll also have some money to spend if you know there already is some monthly revenue (and enough demand in the market).
@MoneyPhantom Thanks for your reply. I am still in the stage of formulating the solution. The place where I am working have been planning to move to a cloud, but the cost is holding them back and they are maintaining their own data centers. For some reason or other their pilots with cloud companies has failed. Of course I don't have any baggage to migrate and I can start fresh with a clean slate.

I really appreciate your suggestion about validating then scaling. Thank you.
 
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Suds

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@George Appiah Thank you for your detailed reply. You have the perfect experience to guide me.

I am still thinking through the solution. I was basing my "own server" requirement due to bad experience at my current org. But I completely agree with your analysis. And I need to keep an open mind.

I will send you a PM with more details. Thanks again.
 

George Appiah

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I'm travelling now and only have my el cheapo cellphone with crappy internet so can't write much.

Google...

"GETTING & MANAGING YOUR FIRST 1,000 CLIENTS IN WEB HOSTING"

*** If I remember correctly, Hostgator bought the rights to this book, pulled it off the market, and gave it out freely to their resellers and to pretty much anyone who asked. So copies are floating around all over the place.***

This little OLD book provides a general overview of starting and running a basic shared hosting service with a single cPanel reseller account. It deals with both the technology and business side of things, including software for automating account creation and management (WHMCS).

It's not a perfect book by any standard... but for a complete beginner, you'll definitely gain some insights into the industry (You can skip all the lengthy configuration steps, as you're probably not going to use the specific tools, and features and UI of the specific software have changed over the years).
 
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