How to start your own hosting company
Web hosting is a field that finds itself at a special point right now. It’s been around long enough that its importance has been established in the realm of business services and at the same time is young enough that just about anyone can still get into it. Best of all, it’s a field that can be entered with various levels of commitment, each of which can be profitable. Who can get into web hosting?
Web hosting is a nice industry for all sorts of people and businesses to expand into. The most obvious entrant is probably the sole proprietor, often a consultant looking to expand or just an individual looking to tap into that entrepreneurial vein.
It’s not just an industry for individuals to begin their own new business, though. Existing business can use web hosting as a way to expand or supplement their current services. For example, businesses specializing in consulting, development, or even computer repairs are all naturals for moving into hosting. They will likely field questions about it all the time, so it’s something they can move into without much in terms of advertising expenditures. Even on a small scale, offering shared hosting on dedicated servers such businesses are already leasing can at least help to defer their own hosting costs.
Beyond that, even seemingly unrelated businesses can benefit from web hosting as one of those rare examples of in-sourcing. Just as retail stores and petro stations found a way to in-source the cellular phone industry by selling airtime minutes, virtually any business could expand into the hosting sector. Publishers could market discount hosting to authors or delivery companies could promote hosting as a value-added service to frequent customers, for instance. Businesses with prominent web presences frequently offer free blog or message board hosting that is supported with advertising.
Basic classes of hosting
As mentioned, web hosting can be entered at different levels of commitment. In other words, there are different classes of web hosting.
For the absolute beginner, the most basic way to start in hosting is with a referral program. While not really hosting per se, it’s certainly a way to get involved in the industry. This is a great entry point for online content developers who can use referral links in ads or even within the context of articles and blog postings to direct visitors to a link for some hosting company. Some referral programs pay per click or per sale while others pay a percentage of revenue earned from referrals each month as long as the referred customer remains a client. In some cases, there are even second- and third-tier referral programs that generate money by referring other referral program members. However, a drawback is that there is little company branding possible and no building of clientele as most referrals are anonymous.
The first true entry point for hosting today is reselling. This is usually offered by larger hosts allowing beginners to sell hosting accounts on their behalf, often allowing the reseller to brand the hosting and ‑*
sometimes to interact with the clients as the primary support contact. One of the most significant—and oft, overlooked—benefits of reselling is that in addition to utilizing the primary host’s equipment, the reseller is also making use of their paperwork, policies, support personnel, lawyers, licensing, and all manner of business headaches that beginners will want to avoid. The main drawbacks of reselling are limited access to root-level server tools and that clients are contracted to the primary host and probably won’t be able to go along with the reseller if he or she leaves.
Virtual hosting is the next class of hosting and is similar to reselling in most cases. The main difference is that the reseller is offering space on his or her own virtually dedicated server, which allows the reseller root-level server functionality without the risk of impacting the primary host’s equipment or other servers. As server costs have dropped in recent years, this has become a less-utilized class of hosting but nonetheless remains a viable option. Now that virtualization software is becoming more pervasive than ever before—being built into nearly all modern operating systems—there’s a good chance this class of hosting could come back in a huge way.
Advanced classes of hosting
From this point on, we’re looking at where the major players in hosting are found. These classes aren’t for beginners, however each level builds on the level below it in a very natural series of transitions.
Dedicated hosting involves leasing a physical server from a host which can be used to generate revenue in any number of ways. From there, it’s all up to the business leasing the server: paperwork, contracts, etc. Dedicated hosting comes in two flavors, managed and unmanaged. Managed hosting is more expensive but means the most server issues are handled by the datacentre hosting it. Unmanaged hosting is perfect for more experienced server administrators and is considerably cheaper.
In order to cut costs even more—and in turn, increase profitability—most hosting companies next move to co-location. This is very much like unmanaged dedicated hosting except that the datacenter is hosting a server that is owned, not leased. At this level, hosts are essentially paying the datacentre for rack space and a network connection.
Beyond co-location is the highest class of hosting: self-hosting or datacenter hosting. While it’s not unheard of for individual businesses to host their own web servers in-house, hosting sites for other businesses is a wholly different matter. Maintaining high qualities of services, physical security, network stability, and redundant power are more than most hosting companies will ever be able to tackle. That said, once a hosting company is doing business in extremely high-volume this is the only place left to go.
Conclusion
Web hosting is an industry that practically any business or individual can get into. Unlike other business ventures, the entry levels of hosting can be accessed with little or no upfront expenses. Additionally, hosting is a multi-tiered industry that can be entered by entrepreneurs willing to devote any amount of time or commitment to it and still manage to turn a profit.
Web hosting is a field that finds itself at a special point right now. It’s been around long enough that its importance has been established in the realm of business services and at the same time is young enough that just about anyone can still get into it. Best of all, it’s a field that can be entered with various levels of commitment, each of which can be profitable. Who can get into web hosting?
Web hosting is a nice industry for all sorts of people and businesses to expand into. The most obvious entrant is probably the sole proprietor, often a consultant looking to expand or just an individual looking to tap into that entrepreneurial vein.
It’s not just an industry for individuals to begin their own new business, though. Existing business can use web hosting as a way to expand or supplement their current services. For example, businesses specializing in consulting, development, or even computer repairs are all naturals for moving into hosting. They will likely field questions about it all the time, so it’s something they can move into without much in terms of advertising expenditures. Even on a small scale, offering shared hosting on dedicated servers such businesses are already leasing can at least help to defer their own hosting costs.
Beyond that, even seemingly unrelated businesses can benefit from web hosting as one of those rare examples of in-sourcing. Just as retail stores and petro stations found a way to in-source the cellular phone industry by selling airtime minutes, virtually any business could expand into the hosting sector. Publishers could market discount hosting to authors or delivery companies could promote hosting as a value-added service to frequent customers, for instance. Businesses with prominent web presences frequently offer free blog or message board hosting that is supported with advertising.
Basic classes of hosting
As mentioned, web hosting can be entered at different levels of commitment. In other words, there are different classes of web hosting.
For the absolute beginner, the most basic way to start in hosting is with a referral program. While not really hosting per se, it’s certainly a way to get involved in the industry. This is a great entry point for online content developers who can use referral links in ads or even within the context of articles and blog postings to direct visitors to a link for some hosting company. Some referral programs pay per click or per sale while others pay a percentage of revenue earned from referrals each month as long as the referred customer remains a client. In some cases, there are even second- and third-tier referral programs that generate money by referring other referral program members. However, a drawback is that there is little company branding possible and no building of clientele as most referrals are anonymous.
The first true entry point for hosting today is reselling. This is usually offered by larger hosts allowing beginners to sell hosting accounts on their behalf, often allowing the reseller to brand the hosting and ‑*
sometimes to interact with the clients as the primary support contact. One of the most significant—and oft, overlooked—benefits of reselling is that in addition to utilizing the primary host’s equipment, the reseller is also making use of their paperwork, policies, support personnel, lawyers, licensing, and all manner of business headaches that beginners will want to avoid. The main drawbacks of reselling are limited access to root-level server tools and that clients are contracted to the primary host and probably won’t be able to go along with the reseller if he or she leaves.
Virtual hosting is the next class of hosting and is similar to reselling in most cases. The main difference is that the reseller is offering space on his or her own virtually dedicated server, which allows the reseller root-level server functionality without the risk of impacting the primary host’s equipment or other servers. As server costs have dropped in recent years, this has become a less-utilized class of hosting but nonetheless remains a viable option. Now that virtualization software is becoming more pervasive than ever before—being built into nearly all modern operating systems—there’s a good chance this class of hosting could come back in a huge way.
Advanced classes of hosting
From this point on, we’re looking at where the major players in hosting are found. These classes aren’t for beginners, however each level builds on the level below it in a very natural series of transitions.
Dedicated hosting involves leasing a physical server from a host which can be used to generate revenue in any number of ways. From there, it’s all up to the business leasing the server: paperwork, contracts, etc. Dedicated hosting comes in two flavors, managed and unmanaged. Managed hosting is more expensive but means the most server issues are handled by the datacentre hosting it. Unmanaged hosting is perfect for more experienced server administrators and is considerably cheaper.
In order to cut costs even more—and in turn, increase profitability—most hosting companies next move to co-location. This is very much like unmanaged dedicated hosting except that the datacenter is hosting a server that is owned, not leased. At this level, hosts are essentially paying the datacentre for rack space and a network connection.
Beyond co-location is the highest class of hosting: self-hosting or datacenter hosting. While it’s not unheard of for individual businesses to host their own web servers in-house, hosting sites for other businesses is a wholly different matter. Maintaining high qualities of services, physical security, network stability, and redundant power are more than most hosting companies will ever be able to tackle. That said, once a hosting company is doing business in extremely high-volume this is the only place left to go.
Conclusion
Web hosting is an industry that practically any business or individual can get into. Unlike other business ventures, the entry levels of hosting can be accessed with little or no upfront expenses. Additionally, hosting is a multi-tiered industry that can be entered by entrepreneurs willing to devote any amount of time or commitment to it and still manage to turn a profit.
