Thinking of starting a hosting side business, is it possible to compete?

DeluxeNames

I've long pondered have a side business hosting a few people. Last year I went as far as sighning up for a Dathorn.com Reseller plan to resell their hosting. I liked Dathorn and, when I didn't use DreamHost (my main host) I used them, but I never hosted anyone else. My friends talked me out of doing saying, "Too many are already hosting, there's no way to compete, many host for free, you have to be HUGE to make any money, etc."

Are any of you selling hosting out there and how has it worked for you? Are you making mone on it? Did you have to host at a loss for a while before it became profitable?

Thanks!

Felix

Well you can compete but you need to have a lot of patience, a rather high amount of money to invest and offer something that other hosting companies don't. There is just one problem, what can you offer? Prices are already ridiculously cheap ($6.95 a month on some websites) and support on most sites include telephone, forums, email, chat, ticket systems and the like. It will be extremely hard to compete any BETTER than what is already being offered so your aim at first should be compete on the SAME LEVELS until you become more recgonised. The best way to get recgonised is offering lots more promotions and special deals. For example first 50 signs up get 50% of first 6 months of hosting. Special offers will attract more people.

DeluxeNames

Thank you for your response Felix. If you run one, is your own hosting service profitable?

Nuvo

You can get somewhere by offering things others don't at prices they don't, but you're not going to be rolling in the green unless you do it well and get a lot of interest.
Hosts like Powweb get customers because they offer massive amounts of space and bandwidth at low prices, not because they offer PHP and mySQL.
Even then, they don't expect you to use your entire quota as you're hardly going to build the next big social networking site on their servers, so they might oversell if put in a tight spot.
They also sort of breeze over the fact that you're only supposed to host one site on the 20,000MB of space and 400GB of bandwidth they give you... Meaning the next big social network is what you'd need to fill it.

Companies like ASmallOrange get by without the insane prices (they charge $10 a month for 1,000MB and 25GB of transfer) by offering a few things that aren't so common, but which anyone with a knowlage of hosting might actually want, such as:
Scripting support options that are less common such as Ruby on Rails and Python.
No setup fee's on any of their plans.
Decent and honest support services.
Fast servers that runreliable software (Redhat Linux, not Windows Server).

These things are incredibly hard to offer using reseller plans, so it's often a case of those who can buy and run their own server banks crushing resellers as they have to offer low prices to compete, and a full blown server will have more space and such than a reseller account.

If you've got hosting though, you might be able to sell on what space you've got free to make back some money.

DeluxeNames

Nuvo wrote:

If you've got hosting though, you might be able to sell on what space you've got free to make back some money.

By that, do you mean even selling space on your non-reseller hosting?

Thanks Nuvo! I love how your posts are long, thought out, and full of info. They should call you Encylopedia Nuvo.:glasses:

By the way DreamHost supports Ruby on Rails as well.

Nuvo

ASO offers reseller services for an extra $5 a month on most of their accounts, which isn't a lot if you know people who are willing to pay you a few dollars for hosting them or if you get a fair bit of cash from ad services.

My posts are long so I can throw away the time I don't spend having a life, friends or good time at parties and such.
I hardly drink, don't smoke, I'm not a people person and don't like loud music (a bit strange for a rock & punk listner, but I don't care).

Me + Google + Wikipedia = unstopable!

DeluxeNames

Nuvo wrote:

Me + Google + Wikipedia = unstopable!

I like that slogan! It would like nice in a signiture thread.

A Simple Orange does well because they are so trustworthy compared to other hosts? That's how they can charge more?

lionsgate

Well, I run hosting business. And it is quite profitable with some tricks. At first nothing to say more than loss in a hostng business. However, from my side it is not actually loss because I pay as much as I resell. Its a contract/agreemanet. you can try my site at http://www.wholefiles.info

DeluxeNames

lionsgate wrote: »

Well, I run hosting business. And it is quite profitable with some tricks. At first nothing to say more than loss in a hostng business. However, from my side it is not actually loss because I pay as much as I resell. Its a contract/agreemanet. you can try my site at http://www.wholefiles.info

That means you are making money then right Lionsgate? So your saying that at first your were losing money, and now your making a profit?