You've got $250,000 (not $300,000, not $200,000..) :) to put towards building the ultimate hosting company. What do you do?

(In terms of everything.. employees, equipment, etc.)

I know - it's a vague question, but hopefully it'll allow for some broad conversation. :)

- Brandon
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Personally, with that kind of money - assuming you HAD to spend it on a hosting company.... I'd purchase a fairly successful hosting company - and give it a good tune-up.

Purchase newer machines/upgrade, re-organize things if necessary within the organization, and make sure that your current customers are happy with what they are receiving.

The $250,000 question - Answered.

Yeah, I guess that's a good idea - as long as you purchase a company with a good reputation...

- Brandon
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Out of curiousity could you build a small datacenter with that. I understand it would have to be small and use lower quality hardware but would it be possible. What exactly does it take to build a datacenter?? ;) ;)

Yes, but it would probably be very, very small and in a bad area, assuming the going rates for residential medium-sized homes are more than that in most good communities. Commercial properties usually cost more.

You could always rent the building and have all that money for everything else that's needed. Fiber etc.. Just an idea.

If I had 250K and wanted to build a quality hosting company, I would take the 250K and go find a few more investors :)

Use the 250K as your seed money and look for a few more angel investors.

tjk

I was looking at around 120,000 a year for just 8,000 sq. ft of space in a nice Class B building. ( Atleast I think its class b I dunno ) $250,000 is reallly pushing it considering MR Bills.

True. If I had it, I'd probably go with the idea of buying an existing hosting company.

- Brandon
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Connectivity is pretty expensive....

Assuming you started your own datacenter with $200,000-$250,000USD and were thinking of having redundant connectivity (OC Connections) the capital of $250,000 would not suffice.

Sure you could introduce co-location and dedicated server hosting, but buying an existing company is the better thing to do.

Last time I checked, OC lines were already in the $100,000+ range.

Generator + Fire Suppression + Battery Backup + Building (rented or owned) + Redundant High Speed Pipes + Hardware + Security + Staff + ack I need another loan!

Instead of building a new datacenter, why not buy an existing one? Check out http://www.datacenterexchange.com/ - there are listings for quite a few data center locations throughout the country. I would recommend getting one in a building with lots of fiber running into it already, so that you can hook up to providers over Gigabit Ethernet rather than having to provision local loops from a Baby Bell.

Originally posted by Webjunkie
Check out http://www.datacenterexchange.com/

So it's come to this. What's next, a Data Center category on eBay?

You never know, it could happen. Just remember right when you open one you won't need full OC lines. Yes, a full oc3 does cost alot like someone was saying but what host is going to need that right at first? Alot of wasted bandwidth. Get a few different lines with caps from different providers. Then, as you get bigger, pay more for faster lines.. Make sense?

BW is really cheap now. 100MBps from Verio at around $10k a month or so. You can start with just 2 or 3 lines at 10mb and inrease as needed but still $250k is not enough to build a datacenter why not just colocate in a carrier neutral with that ammount and get big enough to build your own datacenter..

I hear you on that.. Good idea ;)

BTW, if anyone would like to give me $500k I might start 2 companies with 250k each, one building out a dc and one colocating and see which becomes most succesful.

How much do you think it would cost to buy a fairly successful company with a good reputation, who has space in a data center (not their own), and has about 400 clients?

(I'm not really interested - just random specs there.. ;))

- Brandon
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I don't think that I'd try to build my own datacenter with that. So I'd lease office space next to my chosen data center, find a couple of business partners, spend half the money on advertising, and the other half on new servers, paying ourselves, new employees and whatever expenses came up.

But can I just invest it in real estate instead? :)

Or you could invest the $250K in a company with a good business plan...

Tetraboy I'm with you on the money :D but not the two companies.

Well,
For 250K , you wouldn't need to buy an existing company. Start your own.

Get off the data center idea in that price range.. get a rack at a good data center with great connections, and in house techs that actually do what you need in a timely manor...

build the company with decent advertising, and hire people as you need them.

Get a course on linux if your using linux servers... pass the course!

Hire good techs, and support your customers like there is no tomorrow... cause if you don't - tomorrow will have a dismal overcast.

Don't waiste the money on over priced advertising. There are too many cost affective places out there... just look.

Be prepaired to work hard and long hours, until you have achieved your goals.

Oh yea,, did I mention: support your customers like theres no tomorrow!
They will tell others, and you will grow!

If this is not a hypathetical question... good luck with your venture.

Tim L

Originally posted by Tetraboy
BW is really cheap now. 100MBps from Verio at around $10k a month or so. You can start with just 2 or 3 lines at 10mb and inrease as needed but still $250k is not enough to build a datacenter why not just colocate in a carrier neutral with that ammount and get big enough to build your own datacenter..

Be careful with Verio there is a lot of talk right now about Verio pulling out of markets, and closing parts of their backbone.

Get a reseller account for $40 dollars a month, then put the other $249,950k into a huge advertising plan. You'll have people in no time ;-)

Brian

Not a bad idea. I don't agree though :blush: Get a few servers, running whichever OS(s) you want to run. Get a nice control panel. Then market ALOT with the rest of the money. Reseller account won't do with all the money you're going to put behind it.

Matt,
I was being sarcastic!

:laugh:

What I would do is go out to a good DC, purchase a full rack in that DC. Then, purchase a like 8 top-notch servers from Dell. Then, place them in the data center and make sure that everything is up and running smoothly. I would also include all operating systems, Windows, Linux, FreeBSD, etc.

Then, I would go out and purchase some small office space, and hire 5-6 people. One sales guy, 2-3 tech support guys, One system admin, Then the rest to cover for the whole 24/7 support deal.

I would then purchase the toll free number, have the website designed so it looks very high tech :) and once everything is in place and working, I would set up the a marketing campaign and start taking new orders.


Jim

well, seeing as a full blown datacentre is wayyyy to expensive go get a medium-sized office (1000sq ft) turn that into a mini-datacentre ( with minimal lines ) and then buy out/ make a new hosting company and run it out of that, that way you can offer a couple colo spots, even a rack if you squeeze it in and if it all fails, sell the mini-datacentre

Originally posted by BrianF
Matt,
I was being sarcastic!

:laugh:

Just making sure grrrrr :flamethr:

lol, I know. The internet is hard because you can't exactly hear peoples tone of voice.

Can you imagine how quickly that reseller account would be filled with over 200 grand of advertising backing it up!

Brian

Yep, don't forget staff :D

I started a mini datacenter (8000sq/ft) with $125,000.....it can be done ;)

You don't need 10 OC lines or 100+ servers to start-up with...You just need enough of a network to support your load and to back you up if a line or two goes down. It's not that "hard" I did it.....and I'm only 20

Originally posted by BrianF

Can you imagine how quickly that reseller account would be filled with over 200 grand of advertising backing it up!


No worries, just get a reseller account with Donhost...they offer unlimited everything :). So, you won't have to worry about filling up the account, no matter how many servers and OC48s you fill up :D.

BTW: I think Jim had the best plan so far -- but he went too far. Get a couple of racks in two data centers -- one on the east coast and one on the west -- get a server on each coast for shared hosting, and 5-10 servers in each data center to start your dedicated business (the rest of the space can be used for colo).

Hire one person on the west coast, one person on the east coast (both work out of their home). Have calls rotate between the two people initially. As you get more customers, add more staff -- the idea is you have to be able survive for at least the first year on that $250,000 :D.

In real estate, it's "location, location & location". In the world of Internet businesses, it is a good domain name. You must absolutely positively get a great domain name. Dynahost.com is for sale. Only $100,000.

Originally posted by Cyberswami
Dynahost.com is for sale. Only $100,000.

A little too J.J. Walker for my tastes. Besides, it would be more effective to buy a $10 domain and use the other $99,990 to build brand recognition through marketing.

I think i would also go for buying an existing hosting company with a fairly good rep and some clients, use any remaining money to upgrade polder machines, work on more marketing etc.

Originally posted by Xenon210
You've got $250,000 (not $300,000, not $200,000..) :) to put towards building the ultimate hosting company. What do you do?

- Brandon


Okay Brandon -- where is my $250,000 :D.

Originally posted by uuallan


A little too J.J. Walker for my tastes. Besides, it would be more effective to buy a $10 domain and use the other $99,990 to build brand recognition through marketing.

For you to build a brand around a domain name, it has to be "brandable". You can spend a million dollars to promote a name like asgarismailhosting.com and nobody in the world (excpet some people in the Middle East) will remember your name. That is why a name like dynahost.com is so useful. It is extremely brandable. Obviously $100,000 is a lot of money. You shuld not spend that much money unless you are trying to build a very big company (millions of dollars in revenue per month) and then $100,000 is chump-change. You also have to think about how the name will be perceived by future investors. If you are going to do an IPO, Dynahost is unbeatable.

Originally posted by Cyberswami

For you to build a brand around a domain name, it has to be "brandable". You can spend a million dollars to promote a name like asgarismailhosting.com and nobody in the world (excpet some people in the Middle East) will remember your name. That is why a name like dynahost.com is so useful. It is extremely brandable. Obviously $100,000 is a lot of money. You shuld not spend that much money unless you are trying to build a very big company (millions of dollars in revenue per month) and then $100,000 is chump-change. You also have to think about how the name will be perceived by future investors. If you are going to do an IPO, Dynahost is unbeatable.

I'm the only one supposed to be pulling April Fool's jokes today. dYnahost is unbeatable?? Not even close. Exodus, Digex, Interland, Interliant are all IPO companies, and managed to do it without spending $100,000 on a domain name.

As far as brandable, there are a lot of domains available that have better branding potential than dynahost. Even if you want to keep with the dyna theme:

dynaracks.com
dynahoster.com
dynacolo.com

Even if you are an "IPO" company (not that there are many of those in hosting today), spending $100,000 on a domain like dynahost.com is questionable at best.