Starting A Web Hosting Business (A Simplified Overview)
7 min read
- What are the basics of web hosting?
- How can you make money by starting a web hosting business?
We will deal with these questions as you read on.
Inasmuch as real-world communities are comprised of houses and buildings, the internet is comprised of websites and webpages. In order for these digital domiciles to exist, they need some sort of “virtual space” where they can reside. This is where web hosting companies come in – they provide digital real estate for websites owned by various internet businesses.
Just like it’s lucrativeness in the real world, the business of real estate in the digital realm is a very profitable one. This is because there seem to be never-ending births of websites as each day passes.
According to a statistical survey published by internetlivestats.com, there are over 1.5 billion websites published on the Internet. Though only 200 million of these sites are considered to be active, it is still clear that there are many people out there who are willing to pay for a certain storage area where their websites can be situated.
If you invest in a web hosting business, you could be on your way to making a huge pile of income since the number of websites and web businesses will surely continue to grow in the next years.
Before you decide on investing in it, you have to know the basics first.
Typical types of web hosting services
Shared hosting – is a kind of hosting where many websites reside on a single server. By far, this is the most economical among web hosting services because the cost or maintenance is shared by many paying clients. A shared server will be responsible for storing and disseminating various types of files into various workstations that access it from various places.
Reseller hosting – is when a client “resells” a particular access to a certain server. By being a reseller of a particular web hosting service, you are given a virtual area in which you will administer services to website owners. They include technical support and customer care.
Virtual private server – is a set of server spaces unified in a virtual manner so that they may function as one. If you render this type of service, you will be dependent on a number of providers as they are the ones responsible for the storage areas needed by the clients. VPS owners often handle admin tasks and are responsible for site maintenance activities.
Dedicated servers – are servers rented by a single client and has full control over it. In this scenario, the client may or may not own the server. By using a server of this type, security, performance, stability, and control are of a high level.
To make it truly simple, there are 2 basic ways in which you can start a web hosting business:
1. You can buy a web server and find some clients to rent it.
2. You can buy some storage area from existing web servers and resell it to clients.
Since the second option is a lot less expensive and not to mention a whole lot easier to do, let’s focus on it first. Reseller hosting is actually the best option for anyone who wishes to have some passive income in the field of web hosting.
How much can you possibly earn as a web host reseller? Experts on the field say that typical hosting plans range from $10 – $50 per year. So for instance, you are able to sell in that range to 300 website owners, you could earn around $3000 – $15000 per year.
Choosing to be a web host reseller has the following advantages:
- You don’t need to worry about the “physical aspects” of the service you’re offering to web clients, the server owner will do the worrying for you.
- You only need to think about attracting clients and negotiating with them.
Steps to take in becoming a web hosting reseller
So what are the things that you will most likely do? What are your expected responsibilities?
Here they are in the most simple iteration:
1. Apply as a reseller for known web hosting platforms. They will be the ones who will provide the digital spaces that you’ll be selling and renting to people. The most popular platforms include:
Don’t get too confused with what the figure means. What I’ve shown you are just the possible directions to go should you become a reseller. It is also meant to give you the idea about how cheap (or expensive) your planned business could be.
Read this to learn more about the process of applying as a web host reseller.
2. Decide on the details about your hosting plans and options. In order for your potential clients to invest in whatever it is your selling, you have to be very clear about what they can get with your service. Most likely, web businesses will be asking you about 3 major factors:
- How much storage they can get
- what bandwidth range they will have (so they will know how fast their website can be loaded)
- How available technical support will be.
To cater to that, you need to create something like this.
3. For the 3rd and final step, you will need to let people know that your business exists. Creating a social media page to announce your existence would be the best course of action for this. Create a post, share it with your friends, or pay a small amount for its promotion. If you have done the second step reasonably and clearly, clients will come to you and will tell others about the goodness (or badness) of your newly-established business.
There, I’ve just given you the basics of being a web host reseller. That should be enough to give you a decent stream of income. But what if you want a considerably bigger revenue?
The answer to that would be to invest in a physical web server. Truth to be told, there is considerably greater money that you can get if you are the proprietor of a real server or set of servers inside your house or a building that you own.
Investing on a web server
Of course, this endeavor is an expensive one. The most ideal kind of computer that can handle this would be a mainframe computer. As of this writing, mainframes cost around $250,000 to $750,000.
Why are they that expensive? The answer is simple, mainframes are equipped with processing and storage capabilities that are way too heavy for standard computers. They are meant to house large amounts of data and host many websites and internet resources, they have to be dozens of times more powerful than average laptops and desktops.
To learn more about mainframe computers, read this.
They are truly pretty costly. But when we talk about the benefits and potential income that you can get from such an investment, the numbers will surely make everyone super-excited. Godaddy, one of the biggest companies in the web hosting business has an estimated revenue of $2.988 billion as of June 2020.
Of course, it is a giant industry run by thousands of workers. What if you just want to do something similar at the confines of your own home? Yes, it’s possible. Read about it here.
When you own a web server mainframe, you can then sell those other web hosting services mentioned above: shared hosting, virtual private server, and dedicated server. You might not be as rich as the owners of Godaddy, but you’ll surely be richer than any typical web host reseller out there.
But buying a mainframe and attaining clients are not the only things you need to do. There are certain considerations that you have to put into perspective.
Aside from the financial cost of the machine itself, you also need to invest in the following:
A reliable backup power system
This should go without saying, but let me say it anyway. Your mainframe must be operational constantly, 24/7. Obviously, no internet businessman would ever want to put the caption “available only on weekdays from 8:00 am to 5:00 pm” on their websites. They need to have their web firms be accessible at all times. As such, you need to make your server up and running always, always, and always.
You need to purchase a power generator, albeit, a truly reliable one. This is to make sure that once power goes off, your mainframe server will not faint and halt for even a few seconds. Failing to do this would certainly make your clients truly unhappy.
A climate-controlled room
Mainframes do a lot of heavy processing tasks and for that reason, they generate a lot of heat, yes heat! Because it’s just their nature, you need to house them inside a climate-controlled room where they can get the ventilation and cooling requirements that they need to prevent them from malfunctioning and to ensure that they continue to be in service for many years.
Although standard air-conditioning is already enough to prevent mainframes from overheating, they need to be set in super low-temperature settings at all times. This leads us to the understanding that the electrical cost of owning a web server is also very high.
A vigilant technical staff
This is a big one. If you own a web hosting server, you are by default an owner of a web hosting business. You could have clients from various time zones. Your evenings could be their mornings and vice versa. This means that you have to hire people other than yourself that can answer client calls whenever some troubles sprout here and there.
The solution to this is to hire a technical staff, or commission a technical support agency that can handle walk-throughs and guides should something go wrong. This is of course, is an additional expense on your part.
But here’s the thing, once your mainframe server has already been configured properly, and once you have stored it in a very ideal climate-controlled room, it should continue to run for extended periods without further human interruption.
Regardless if you plan to be a web host reseller, or be a web server owner, one thing is clear: investing in digital real estate is a thing of the future. It can surely give you a stable income, and it is perhaps one of the wisest decisions you’ll ever make because of this one indisputable fact: the physical spaces that we can occupy in this world is shrinking in very fast rates.
Since it’s getting harder to own a physical space in the real world, you have to highly consider owning a virtual dimension where you can provide digital spaces for countless clients.
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