How hard to start a small hosting company

buttster · 2005-02-27, 01:53 PM

a friend of mine is looking at maybe trying to start up a small hosting company and grow it with time. He doesn't have any technical experience but has some money saved to invest. I know he would have to hire a tech which is not cheap and he would be responsible for getting sells.
What would be the minimum he should expect to spend initially.

twintone · 2005-02-27, 03:23 PM

This totally depends on what he is looking to do.

If he is just looking to get a machine from a host, and resell hosting on it, then it wouldn't cost very much, but he wouldn't have full control of things.

If he is actually looking to purchase a rack, switch, machines, and everything else you need to start a legitimate host, then its going to cost him a good amount of money.

My guess is, he is just going to lease a machine from some cheap host, and host sites on it like 500 other little (so called hosting companies) do.

I would suggest he at least think about buying his own machine, and having it co-located somewhere close to his home, so he can at least go do things himself if ever needed. Otherwise you are depending on some 3rd party support. If they suck, then your support is going to suck. Nothing worse then having a machine down, and depending on some other party to get it back up for you. Talk about feeling helpless.

Just a few things to think about.

cd34 · 2005-02-27, 04:00 PM

Many ways to do it:

There are dozens of guys reselling Servermatrix/Rackshack and then doing the management. I know of one company that charges $50/month for management and doesn't have any of the headaches of rebilling the machines. Rough estimate, they buy the server for $99, mark it up to $199, do the management. Pretty simple math. 100 machines = $10k/month gross profit.

You could colocate machines at an existing provider. Depending on their response to failures/reboot requests, and your access to the machines, you could build a small provider fairly well.

You could rent a rack and buy bandwidth and do your own maintenance/troubleshooting.

Or, you could find some space, bring connections in, ramp up the building with generator power and batteries, etc.

If you were wanting to just get the thing rolling, 1x annual gross is the current multiplier for purchasing webhosting facilities. .6x annual on virtuals. You could buy an existing provider. Careful with that though, sometimes the guys selling believe you should also buy out the equipment lease that they got. They traded tommorows income for today dollars.

With today's economy, and the glut of Carrier/Class A colo space available, I haven't seen a very compelling reason to build a data center today. Regardless of what the facility says, make sure you are close enough to perform maintenance if you need to.

One of the more expensive facilities around us cut their prices in half to get me to talk to them -- that's before I picked up the phone. There are carrier/colo hotels all around the place -- I would assume at least a few in Phoenix.

Good luck with it.

cobrasnake · 2005-02-27, 06:22 PM

Hey cd34 am I missing something or does this suppose to make sense?...lol

cobrasnake, PM Useless Warrior and let him know he is special. Do it!

cd34 · 2005-02-27, 06:34 PM

just do it and don't ask questions or |gabbo| will get mad at me.

2005-02-27, 01:53 PM	#1
buttster Hey, can you take the wheel for a second, I have to scratch my self in two places at once Join Date: Nov 2003 Location: Central California Valley Posts: 181	How hard to start a small hosting company a friend of mine is looking at maybe trying to start up a small hosting company and grow it with time. He doesn't have any technical experience but has some money saved to invest. I know he would have to hire a tech which is not cheap and he would be responsible for getting sells. What would be the minimum he should expect to spend initially. __________________ The Tit Directory

2005-02-27, 03:23 PM	#2
twintone Heh Heh Heh! Lisa! Vampires are make believe, just like elves and gremlins and eskimos! Join Date: Jul 2004 Location: Wisconsin Posts: 77	This totally depends on what he is looking to do. If he is just looking to get a machine from a host, and resell hosting on it, then it wouldn't cost very much, but he wouldn't have full control of things. If he is actually looking to purchase a rack, switch, machines, and everything else you need to start a legitimate host, then its going to cost him a good amount of money. My guess is, he is just going to lease a machine from some cheap host, and host sites on it like 500 other little (so called hosting companies) do. I would suggest he at least think about buying his own machine, and having it co-located somewhere close to his home, so he can at least go do things himself if ever needed. Otherwise you are depending on some 3rd party support. If they suck, then your support is going to suck. Nothing worse then having a machine down, and depending on some other party to get it back up for you. Talk about feeling helpless. Just a few things to think about. __________________

2005-02-27, 04:00 PM	#3
cd34 a.k.a. Sparky Join Date: Sep 2004 Location: West Palm Beach, FL, USA Posts: 2,396	Many ways to do it: There are dozens of guys reselling Servermatrix/Rackshack and then doing the management. I know of one company that charges $50/month for management and doesn't have any of the headaches of rebilling the machines. Rough estimate, they buy the server for $99, mark it up to $199, do the management. Pretty simple math. 100 machines = $10k/month gross profit. You could colocate machines at an existing provider. Depending on their response to failures/reboot requests, and your access to the machines, you could build a small provider fairly well. You could rent a rack and buy bandwidth and do your own maintenance/troubleshooting. Or, you could find some space, bring connections in, ramp up the building with generator power and batteries, etc. If you were wanting to just get the thing rolling, 1x annual gross is the current multiplier for purchasing webhosting facilities. .6x annual on virtuals. You could buy an existing provider. Careful with that though, sometimes the guys selling believe you should also buy out the equipment lease that they got. They traded tommorows income for today dollars. With today's economy, and the glut of Carrier/Class A colo space available, I haven't seen a very compelling reason to build a data center today. Regardless of what the facility says, make sure you are close enough to perform maintenance if you need to. One of the more expensive facilities around us cut their prices in half to get me to talk to them -- that's before I picked up the phone. There are carrier/colo hotels all around the place -- I would assume at least a few in Phoenix. Good luck with it. __________________ SnapReplay.com a different way to share photos - iPhone & Android

2005-02-27, 06:34 PM	#5
cd34 a.k.a. Sparky Join Date: Sep 2004 Location: West Palm Beach, FL, USA Posts: 2,396	just do it and don't ask questions or \|gabbo\| will get mad at me. __________________ SnapReplay.com a different way to share photos - iPhone & Android

2005-02-27, 06:22 PM	#4
cobrasnake WHO IS FONZY!?! Don't they teach you anything at school? Join Date: Feb 2005 Posts: 49	Hey cd34 am I missing something or does this suppose to make sense?...lol cobrasnake, PM Useless Warrior and let him know he is special. Do it!