Hello,

For the people who run their own webhosting company, and have established themselves well in the market (running for 5-10 years), is webhosting your personal primary income?

I see the companies which sell, some of the better ones are only turning over £25k annual rev.

If this is the case, why host? There are much better jobs out there for the technical people, and much richer markets for the business men.

Am I completly wrong?

. . . I see the companies which sell, some of the better ones are only turning over £25k annual rev.
If they're only doing £25k annual rev, then they're certianly not in the "better ones" class. They're in the "not yet out of the gate" class.

Ok, what I meant by that scentence was that companies who sell themselves (on WHT forums) - the better ones are only doing £25k, at least I havnt seen a company who sold have higher than that revenue.

Ok, what I meant by that scentence was that companies who sell themselves (on WHT forums) - the better ones are only doing £25k, at least I havnt seen a company who sold have higher than that revenue.

Then they're barely out the door as Bob stated.
I have worked for providers bringing in over 15+ million in revenue a year from shared hosting services.

This industry is great :)

There is ALOT of money to be made in This industry, But it is alot of hard work , $25k a year isn't enough to pay One Full Time Tech .

The reason you don't see many hosts selling whos turnover more than that is exactly that reason. They are making enough money to survive and continue so why sell ?

Ok, what I meant by that scentence was that companies who sell themselves (on WHT forums) - the better ones are only doing £25k, at least I havnt seen a company who sold have higher than that revenue.

That's just the nature of WHT. WHT is a meeting place for small hosts. Most are one-man shows, and some are just hobbyists. The bigger hosting companies aren't going to sell on WHT, or they'll ask for an NDA only from serious buyers.

Im sorry for having to post this.
But are you saying $25,000/yr. ?
If their ppl here on these forums pulling 25K a yr. from hosting and stuff, their doing extremly well in my opinion..were im from in the USA, ppl are rich if they make 25K / yr...im really shock to learn that ppl make that much from this.
Please let me know if im wrong about this.
Thx,

Well I come from , people might be considered " wealthy " if they are getting $200,000 a year But not rich unless its over $2,000,000.

Also he said the company has an income of $25,000 per year , which is still very small and even if it was profit that is also very small.

Bigger hosts don't get sold on WHT .

Im sorry for having to post this.
But are you saying $25,000/yr. ?
If their ppl here on these forums pulling 25K a yr. from hosting and stuff, their doing extremly well in my opinion..were im from in the USA, ppl are rich if they make 25K / yr...im really shock to learn that ppl make that much from this.
Please let me know if im wrong about this.
Thx,

The OP says it's 25,000.00 EUR per year (= 34,012.73 USD = $2,834.39/mo).
That should be a good income for A person, but it's not enough for A company to cover something such as renting the servers, support staffs, etc. so that's why they sell it.

I actually said GBP 25,000 , which is about $50,000.

Interesting topic... I didnt know the industry was so rich! The way I saw it, people were mainly 1 man bands with a few outsourced tech support and accounting, and running a web hosting company was a side job to their main job as a bit of extra income.

Now i hear you can actually make a living out of this im much more confident.... I was worried how I would be able to put the hours into this with a full time job, since I would need some other source of income but perhaps if I manage to get something off the ground properly I can leave my full time job.

This is exciting, I have run a small company before at the age 14, it went very well until GCSEs arrived, I'm now 17 and am carefully planning every step of starting a new company, since my last weakness was my planning. Hence these questions (I need to plan my own life as well as my company).

Thanks for your input!

I'd love to know how you are determining the income a company makes. Unless you have asked and have been told, I can't see how you can say what a company is making.

I think you'll be surprised just how many Web hosting companies, even on WHT, who make a seven or eight figure annual profit. Web hosting isn't the easiest industry to make a good living from, but that's why we're all here, right? We want a challenge, and Web hosting gives us that challenge. :)

I'd love to know how you are determining the income a company makes. Unless you have asked and have been told, I can't see how you can say what a company is making.

I think you'll be surprised just how many Web hosting companies, even on WHT, who make a seven or eight figure annual profit. Web hosting isn't the easiest industry and make a good living from, but that's why we're all here, right? We want a challenge, and Web hosting gives us that challenge. :)

Well said. Reps.

Mostly I think people underestimate how difficult the growth-curve in this industry is. It takes so much more then just a website and some software.

Are we talking gross profit or net? Hopefully net. You can make some big figures but they dont' mean much if your costs are just as big.

I'd love to know how you are determining the income a company makes. Unless you have asked and have been told, I can't see how you can say what a company is making.

Glad I can easily answer that question;

Like I said in my first post, I was looking at the companies who were selling out. And with most company sales they post their ann rev.

I know looking at these companies is deffinatly not a representation of the rest of the hosting companies, as ofcourse, these have failed. And I know there are some companies (such as 1&1 and WebFusion and maybe Heart Internet - all UK companies) who make multi millions/billions, but again I'm talking about little companies with maybe 3-6 employees instead of huge "we own our own datacenter" companies.

Harry

Mostly I think people underestimate how difficult the growth-curve in this industry is. It takes so much more then just a website and some software.

Yes, ofcourse it takes a lot more, I'm sure the majority of the members on WTH realise that, but maybe you can extend your answer to explain what it really takes?

Thanks
Harry

EDIT: Sorry for double post

Like I said in my first post, I was looking at the companies who were selling out. And with most company sales they post their ann rev.

Sorry, Harry. I skipped right over that. :blush:

I know looking at these companies is deffinatly not a representation of the rest of the hosting companies, as ofcourse, these have failed. And I know there are some companies (such as 1&1 and WebFusion and maybe Heart Internet - all UK companies) who make multi millions/billions, but again I'm talking about little companies with maybe 3-6 employees instead of huge "we own our own datacenter" companies.

Well, just FYI, I know of companies who are represented on WHT who have ~10 employees and pull in a seven figure profit.

It would be nice to have some solid figures, but I think you'll be surprised at just how many Web hosts there are who are in the middle ground between the small hosts and the likes of 1&1. :)

...maybe you can extend your answer to explain what it really takes?

That'd be a task and a half! :) It takes what any other business takes. The mistake that far too many people make when starting a Web hosting business is they think it's somehow different to any other business. They think it's an Internet quick rich scheme, and they don't treat it like a real business. I'm sure that's not how you see it, Harry, but a lot of people do. A pet hate of mine. :)

well,
i am so sure $50,000 a year is not what BIG hosts make...
their datacenters are worth close to $50,000,000
so it is but obvious that they make much more than $50,000 a year
with a datacenter of your own,worth $50,000,000
annual turn overs must be close to 10-15million minimum!
with a profit of close to 5-7million USD

Sorry, Harry. I skipped right over that

No worries :)

Well, just FYI, I know of companies who are represented on WHT who have ~10 employees and pull in a seven figure profit.

This I didnt know! But its basically what I wanted to pull from this thread. Yes, it is supprising for me, but im sure you can see why with my age.

The mistake that far too many people make when starting a Web hosting business is they think it's somehow different to any other business. They think it's an Internet quick rich scheme, and they don't treat it like a real business.

Yes, I see this a lot on WHT. Many people buy themselfs a reseller and immediatly think they are a reseller. They then post here asking what they should do next.

I'm sure that's not how you see it, Harry, but a lot of people do. A pet hate of mine. :)

Deffinatly not. Its almost been a dream to get my old company off the ground as an established host which I can live off. When I was younger and running the company my "dream" was to be going to a datacenter installing servers and networks, having a time doing the things I love to do and making a living from it at the same time. I had never been to a datacenter, and always looked at images of them on the internet thinking "cooooool". On Tuesday this week I visited a datacenter for the first with a collegue (bad spelling?) from work to install two new servers. It was great to see what it was really like, and made me beleive even more that running a hosting company and putting my knowledge to good use providing outstanding support to my clients is what I want to do. Im in this for a career, a living, a professionalism, not to make quick bucks like some others.

It is also a pet hate of mine, too. I beleive like other businesses and industries the web hosting industry should be professional, run by professionals, not hobbiests. Running one as a hobby can be fine, for friends or families, but as long as you dont pretend to be a professional business. It costs real professional businesses time and money so you can do your hobby.

One thing which makes it so easy to do this as a hobby, is the availability of the equipment needed to physically host a website (businesses offering cheap reseller accounts), but a lack of the skills and other tools, which are essential. This is one of the reasons behind me targeting reseller/vps/dedicated/colocation, because along side of this I can help offer the skills and tools, by possibly providing a more managed service and the extra web based tools they need (such as proper billing software - ModernBill, and proper support software - Kayako, use of credit card processing, access to sell domains). Ofcourse I know, there is a lot more to running a business than having these tools. The only thing which worries me is the possibility of targeting an unstable market (people wanting to start a hosting company, buying my services, then failing and cancelling my services). Any views on this in particular?

Harry

One of the reasons that it is so easy to get into webhosting period is that you can put up a pretty website with fake information and pass yourself off as a real business.

That's my pet peeve. I almost wish there was an entry fee...

I think their should be some sort of regulation or licensing , Just something to cut down the number of " fake companies "

This I didnt know! But its basically what I wanted to pull from this thread. Yes, it is supprising for me, but im sure you can see why with my age.

Age has nothing to do with it, I promise. It's just the nature of the industry. Everybody tends to think exactly what you were thinking. I like to think it's because our industry strides to provide the personalised, small family company feel no matter how large you are, so most companies are perceived as being smaller than they are. At least that's what my I'd like to believe. :) Just last week I had a customer mention that we and several of our associates operated bigger businesses than he thought. It gives me the warm fuzzy feeling when somebody says that, because we and our other industry associates are obviously providing a personal service. As standard and boring as Web hosting seems to us, when you really look at it, it's a special industry with some unique aspects. :)

Many people buy themselfs a reseller and immediatly think they are a reseller.

You hit the nail on the head!

It is also a pet hate of mine, too. I beleive like other businesses and industries the web hosting industry should be professional, run by professionals, not hobbiests. Running one as a hobby can be fine, for friends or families, but as long as you dont pretend to be a professional business. It costs real professional businesses time and money so you can do your hobby.

I've always maintained that I don't mind people doing it as a hobby. The fact is, 99% of us run a Web hosting company because we enjoy it, so I guess we could count that as a hobby. I know what you're getting at though. Doing it as a hobby is fine, as long as they go about it the right way and provide customers with a quality service. However, Web hosting tends to have a lot of people who do it as a hobby who don't go about it the right way...

As others have said, anybody and everybody can start offering Web space. Pricing and availability are factors in this ease. However, just because everybody can offer Web space, it doesn't mean everybody can start a Web hosting business. There's a big, thick line between being able to offer Web space and being able to run a Web hosting business.

The only thing which worries me is the possibility of targeting an unstable market (people wanting to start a hosting company, buying my services, then failing and cancelling my services). Any views on this in particular?

That's a risk for us all, but the risk is so small it's hardly worth noting. You'll probably lose one customer in every 100 because they failed in their own business attempt. In all honesty, I pity anybody who enters the budget market of Web hosting. It's so much harder than the business/premium Web hosting markets, in my opinion. By offering premium Web hosting at higher prices, you tend to end up with a better customer base who require less support (hence lower support costs). You tend to get less fraud orders. Your profit margins on servers tend to be higher. Of course, I wouldn't advise you to enter the premium market either.... because that's where I am and I want the least competition possible. :D

I almost wish there was an entry fee...

There is, or at least there would be if it was better enforced... business registration fees.

I think their should be some sort of regulation or licensing , Just something to cut down the number of " fake companies "

That was discussed in Vegas last year during HostingCon. It's generally agreed it is a good idea, and there are some big companies willing to back it, but it turned out to be a lot harder than anyone first imagined. Some day... I hope.

I think their should be some sort of regulation or licensing , Just something to cut down the number of " fake companies "It's very simple, eliminate non-var reselling. No reseller accounts; no garbage, unqualified hosting. Things will go back to where they were in the late 90's with only qualified players in the market. I’m doing my part….

Part of the problem is who enforces the fee's or regulation, As there are UK hosts , US hosts and Uk companies who offer USA hosting and USA companies that offer Uk hosting.

It would have to be multi national or Something.

Anyway , I just think Hosting is the only industry where Kids can start up a host and pretend to be a real business.

Would it be good , if All companies providing dedicated servers checked that if they were being used to sell hosting , the company was real and registered. Maybe something similar with reseller hosting also.

That's a risk for us all, but the risk is so small it's hardly worth noting. You'll probably lose one customer in every 100 because they failed in their own business attempt. In all honesty, I pity anybody who enters the budget market of Web hosting. It's so much harder than the business/premium Web hosting markets, in my opinion. By offering premium Web hosting at higher prices, you tend to end up with a better customer base who require less support (hence lower support costs). You tend to get less fraud orders. Your profit margins on servers tend to be higher. Of course, I wouldn't advise you to enter the premium market either.... because that's where I am and I want the least competition possible. :D

Your exactly right here, and im one to have experienced both sides of the budget/premium hosting markets, and in terms of enjoyment, the premium is the clear winner. Its more of a challenge, which is good, but you also dont get the endless support hours which are required for budget hosting, and the people you deal with tend to be better educated, speak to you in an understandable manner (eg they dnt spk leik ths).

I certainly wont be entering the budget hosting market.

Anyway , I just think Hosting is the only industry where Kids can start up a host and pretend to be a real business.

Indeed your right, but its not only kids who do this, and there are a small number of kids who are successful.

I am so sure $50,000 a year is not what BIG hosts make...

Correct. We are not even a big host but we spend more than $50,000 *per month* on our datacenter alone (excluding staff salaries)...

Correct. We are not even a big host but we spend more than $50,000 *per month* on our datacenter alone (excluding staff salaries)...

Your datacenter - being *your* datacenter, instead of the datacenter you locate your hardware?

Your datacenter - being *your* datacenter, instead of the datacenter you locate your hardware?

Yes, we have had our *own* datacenter a couple of years. It was a big investment but we calculated it was a good investment in the long run.

We did not want to be just like everyone else. With our own DC we have full control of everything and plenty of space 1560 ft (145 m2).

Wow! Where do you get funding for such an investment?

EDIT: Just looked at your tour, very impressed! The idea of clustering how you have must attract some nice customers.

Wow! Where do you get funding for such an investment?

We were pretty good at selling our package. One day we could not get racks in the collocation we used as fast as we needed them. They had a lot of problems with supplying power etc.

One day we sad down and saw that most of our problems we had were actually caused by the datacenter we were in. We had to move to continue growing our firm so we took pretty much all our capital and build our own datacenter. We needed our own datacenter so we build one..

EDIT: Just looked at your tour, very impressed! The idea of clustering how you have must attract some nice customers.

Thank you. The datacenter does however not look this way any longer (we need to get the pictures updated) as we not longer base the clusters on rack mounted servers.

It's very simple, eliminate non-var reselling. No reseller accounts; no garbage, unqualified hosting. Things will go back to where they were in the late 90's with only qualified players in the market. I’m doing my part….
You only have so many fingers for the dike. :D

I've been in it 5-6 years. Maybe 7. Didn't start out to be - and never want to be a huge multi-million dollar company (afraid of heights). I would expect that for the first couple of years your "hourly" pay is pretty close to minimum wage. Mainly because it takes many hours in the day to be successfull. It isn't an 8 hour a day job, and there aren't really any vacations. But its a lot better to work all day and night for your self than it is to sell 8 hours a day of your life to someone else. I kept my day job until it became a nusiance, unworthy of my attention.

Quality of life would be the first priority. Then money way further down the list IMO.

I think their should be some sort of regulation or licensing , Just something to cut down the number of " fake companies "
That is what the need of time because these fake companies ruining our business also.

Im sorry for having to post this.
But are you saying $25,000/yr. ?
If their ppl here on these forums pulling 25K a yr. from hosting and stuff, their doing extremly well in my opinion..were im from in the USA, ppl are rich if they make 25K / yr...im really shock to learn that ppl make that much from this.
Please let me know if im wrong about this.
Thx,

You must live in that other America that John Edwards keeps telling us about. 25k/yr is literally nothing in this industry if you know what you are doing.

You must live in that other America that John Edwards keeps telling us about. 25k/yr is literally nothing in this industry if you know what you are doing.

Not just this industry, any industry.

It's very simple, eliminate non-var reselling. No reseller accounts; no garbage, unqualified hosting. Things will go back to where they were in the late 90's with only qualified players in the market. I’m doing my part….
You're kidding, right? That's one of the most ignorant things I have read on this board in the last four years.


Simon

You're kidding, right? That's one of the most ignorant things I have read on this board in the last four years.


Simon
No , Im not kidding. You just lack the industry acumen and experience to understand otherwise. Why would any business want to create it's own direct competitive market clutter through wholesale, under margin pressure? The answer is it wouldn’t unless it was unable to grow through normal organic full retail channels, which is the case with most hosts that resell. Resold accounts in the same secgment other than VARs are just clutter, they lower the bar overall, providing garbage unqualified market entrants, decreased consumer confidence and ultimately increase cost to serve to the tier 1 which usually leads to a forced sale when they hit the wall. When I evaluate a host in the shared sector and see reselling into their own market it basically illustrates that the given host is too stupid to grow otherwise. I wouldn't expect anyone on a hobby board to get it, most think a large host is one with 5k customers... oh well.

No , Im not kidding. You just lack the industry acumen and experience to understand otherwise. Why would any business want to create it's own direct competitive market clutter through wholesale, under margin pressure? The answer is it wouldn’t unless it was unable to grow through normal organic full retail channels, which is the case with most hosts that resell. Resold accounts in the same secgment other than VARs are just clutter, they lower the bar overall, providing garbage unqualified market entrants, decreased consumer confidence and ultimately increase cost to serve to the tier 1 which usually leads to a forced sale when they hit the wall. When I evaluate a host in the shared sector and see reselling into their own market it basically illustrates that the given host is too stupid to grow otherwise. I wouldn't expect anyone on a hobby board to get it, most think a large host is one with 5k customers... oh well.

While I agree with some of your points, I feel your overall theme is incorrect.

Resellers serve an important role: service. Think of a reseller as an employee that is delegated a number of clients. The reseller can offer more personal attention compared to a host with 25000 clients that is having their margins squeezed.

edit: to us, reselling is all about providing a more personal level of service. Resellers do not have to be concerend with patching servers or fixing exim/apache/*sql/etc.. - they can focus instead on provding quality tutorials and answering questions to a broad segment of customer - the ones without much technical knowledge.

I couldn't agree more with cowabunga. Honestly, aside from pyramid schemes hosting seems to be the only industry that creates its own competition. Overselling and reselling were doubled-edged swords. They opened the industry in an amazing way, allowing the average Joe to qualify a blog, meanwhile, it created pricing structures which are doomed to failure once the business starts acting like a business (as opposed to the "hobby" type operations).

most think a large host is one with 5k customers

The flaw isn't how many customers make a large host, it's using customers to analyze size in the first place. When you have companies producing plans that run $25 per year, 5000 clients would hardly make them big. 10,000 wouldn't even qualify.

But I see your point. When HostGator is considered a "big guy" on the block, it's not surprising that your comments weren't exactly well received :).

While I agree with some of your points, I feel your overall theme is incorrect.

Resellers serve an important role: service. Think of a reseller as an employee that is delegated a number of clients. The reseller can offer more personal attention compared to a host with 25000 clients that is having their margins squeezed.

Not true. There is no reason to assume that a reseller is going to provide better service than a very large host. That assumption relies entirely on this little corner of the industry. Certainly, when your plans and pricing don't leave room for, well you know, employees, I can see your point.

Perhaps the irony is, hosts at lower pricing points have a tendency to attract clients that require a great deal more support.

Not true. There is no reason to assume that a reseller is going to provide better service than a very large host. That assumption relies entirely on this little corner of the industry. Certainly, when your plans and pricing don't leave room for, well you know, employees, I can see your point.

Perhaps the irony is, hosts at lower pricing points have a tendency to attract clients that require a great deal more support.


'Assuming' a reseller will provide better service is not the point. Why do car makers have dealerships? Why don't people just buy cars from gm.com ? What, because cars are a physical product and hosting is a service? Why do we buy tv from comcast, WOW and Dish network instead of from ABC and NBC? That point is moot.

Business is business. People always talk about how unique the hosting industry is - how it's "the only industry where <insert topic> happens". Please. The hosting industry is not magic - it's a service industry, with all the issues other service industries deal with. That's why most host's fail: they think this industry is unique and common business rules do not apply.

I'm pretty sure the fall of the industry as a glamorous skilled service came shortly after the rise of control panels. That allowed even the least competent companies to sell their product and service. In the past companies had to develop their own proprietary systems and that took capital. You'd have to ask data centers why they charge 30 instead of 100 a month for cPanel.

Of course VISA isn't enforcing its own PCI compliance standards but that's another issue.

'Assuming' a reseller will provide better service is not the point. Why do car makers have dealerships? Why don't people just buy cars from gm.com ? What, because cars are a physical product and hosting is a service? Why do we buy tv from comcast, WOW and Dish network instead of from ABC and NBC? That point is moot.

Wow, talk about your inapplicable analogies. First of all GM is a manufacturer. They use franchises (ie, dealerships) because WalMart isn't carrying cars (yet). That's the ONLY reason, mind you. It's very, very rare to find a manufacturer that actually acts as a retailer as well. Can't think of an example.

The television examples are more of the same. They aren't retailers, they are manufacturers. NBC and ABC manufactures television shows. Comcast and Dish Network retail television stations.

Hosting companies don't manufacture anything. Simply put, hosting is a hybrid of Software As A Service and hardware leasing. Hosting companies ARE the retailers. A better example would be Walmart offering you ownership of a Walmart, at cost equivalent to 10 boxes of cereal.

Business is business. People always talk about how unique the hosting industry is - how it's "the only industry where <insert topic> happens". Please. The hosting industry is not magic - it's a service industry, with all the issues other service industries deal with. That's why most host's fail: they think this industry is unique and common business rules do not apply.

No, you are wrong there. They fail because they don't use the common business rules. I'd say the golden rule of business is simple: don't create your own competition.

Unless you'd like to tell me of a business that successfully creates its own competition? No, that is exclusive to the hosting industry, because a great deal of it is ran by teenagers and tech heads. While it's true some in both categories have an excellent business sense, usually the opposite is true.

While I agree with some of your points, I feel your overall theme is incorrect.

Resellers serve an important role: service. Think of a reseller as an employee that is delegated a number of clients. The reseller can offer more personal attention compared to a host with 25000 clients that is having their margins squeezed.

edit: to us, reselling is all about providing a more personal level of service. Resellers do not have to be concerend with patching servers or fixing exim/apache/*sql/etc.. - they can focus instead on provding quality tutorials and answering questions to a broad segment of customer - the ones without much technical knowledge.

Karl what sort of service are you referring to? Picking up the phone? A reseller's service layer is only as good as and dependent upon the upstream provider- They can't turn to a level 1 or 2 tech solution and resolve an issue in one call (granted nor can a lot of real hosts) the problem is they have no access, more often than not, no experience and primarily no market staying power. Most on average never exceed 30 sub-accounts so the model is very very flawed from a cost and growth perspective as I relates to competing with an existing shared channel in tandem. Deploying generic tutorials and answering softball questions is only a fraction of the service layer- resolving tier 1 and 2 technical issues in 1 call is what builds customer loyalty, brand and referral. And since most resellers pretend to be tier1 providers and essentially mislead the average customer they are from where I sit, the bottom of the bottom and the reason that the market has deteriorated to point where it is today. I agree that larger hosts are dropping the service ball as well; that's why so many are one the block ore getting ready to sell- The sweet spot high- value model in shared, is a medium sized host with their own customer service, data center and around 70-125k customers and a var white label reseler channel.

I'm pretty sure the fall of the industry as a glamorous skilled service came shortly after the rise of control panels. That allowed even the least competent companies to sell their product and service. In the past companies had to develop their own proprietary systems and that took capital. You'd have to ask data centers why they charge 30 instead of 100 a month for cPanel.

Of course VISA isn't enforcing its own PCI compliance standards but that's another issue.
yeah I'm comsidering for a charge-back on the 375k we spent on CISP compliance.....:rolleyes:

I couldn't agree more with cowabunga. Honestly, aside from pyramid schemes hosting seems to be the only industry that creates its own competition.
I came into the hosting business as a reseller, and moved up the ladder to renting/coloing servers. I then sold my business and built the family home. My second hosting brand provides a nice stable income. The thing is, there's no "Hosting God" dictating what's good/right or bad/wrong.

We all approach this industry from different backgrounds, perspectives, skillsets etc, and you take what you can, from what's available and create what you need, to get where you need to go, so you can do what you want. :)

I'm pretty sure the fall of the industry as a glamorous skilled service came shortly after the rise of control panels.
Control panels and affordable server renting and colocation services. This has lowered the entry level quite considerably, for those establishing a hosting service. Then there's even lower entry levels available such as a reseller account. I am thankful for this low entry level. It allowed me to build a business with next to no capital, other than sweat equity, and get to where I wanted to go. :)

I do understand cowabunga's frustration, given the public has a very limited understanding of what differnciates a Tier 1 provider from a host with a couple of servers sitting in a colo. To the public, both hosts look the same. Both could have flashy websites, have all the technical lingo, and basically look the same. They don't know any different.

If hosting was restricted only to the Tier 1 providers (own DC etc etc), instead of a Tier 1 host having 125k clients, they'd have 1,250k clients. The saturation of the market through low entry levels, has in some eyes, stolen marketshare from these Tier 1 providers, so 50,000 hosts like me, is a real threat to the Tier 1 providers.

(figures just examples)

I came into the hosting business as a reseller, and moved up the ladder to renting/coloing servers. I then sold my business and built the family home. My second hosting brand provides a nice stable income. The thing is, there's no "Hosting God" dictating what's good/right or bad/wrong.

We all approach this industry from different backgrounds, perspectives, skillsets etc, and you take what you can, from what's available and create what you need, to get where you need to go, so you can do what you want. :)

Certainly, and I hope I didn't come across as someone that wanted anyone dictating what a business should do. I love free market economics, even though it occasionally annoys the crap out of me.

And I'm not sure I'm completely against reselling. However, IMHO if that's what you are going to do, then do it. I don't see any sense in offering reselling in combination with shared hosting, unless it's VAR as cowabunga suggested. Just seems odd to me.

If hosting was restricted only to the Tier 1 providers (own DC etc etc), instead of a Tier 1 host having 125k clients, they'd have 1,250k clients. The saturation of the market through low entry levels, has in some eyes, stolen marketshare from these Tier 1 providers, so 50,000 hosts like me, is a real threat to the Tier 1 providers.

Well I certainly wouldn't want Tier 1 providers in an oligarchy. My company was never even a wort on a Tier 1 providers behind. But I would love to see the reseller market disappear to a degree. A higher overhead would certainly raise the bar of entry. And while I have a healthy respect for the few that started as resellers and grew to respectable hosts, they are 1:1000 for hosts that start as resellers and end there (with loads of unhappy clients).

It's a moot point, isn't it? The industry is never going to go back in time to where it was 10 years ago.

For every kiddie host that is being sold in the ads/offers forums here, there are 10 more to take their place.

The only way a serious and permanent change could ever come around, is if the "core" suppliers (datacenters) actually limited to whom they are selling.

And that's not likely to happen, since most of them don't sell to end-customers, and they don't care about the "end-customer hosting industry" -- they simply care whether their servers are being sold, not how they are being used.

In other words, the only sector of the hosting industry that doesn't create its own competition is the top layer.

Certainly, and I hope I didn't come across as someone that wanted anyone dictating what a business should do. I love free market economics, even though it occasionally annoys the crap out of me.
Ok, I have called off the Klingon hit. :D
. . . But I would love to see the reseller market disappear to a degree.
Yeah, although we do supply reseller accounts, the vast majority of our business is to the end user. HTTPme was more geared to the reseller, so I have switched from servicing that market (wholesaling) to the end user market, be that single domain or multiple domain.

I do cringe when I see some reseller suppliers making it too easy for folks to get started, by offerring everything "turnkey", from the site, to cc processing etc etc. I figure the reseller client should have do most of the legwork, in setting up their business, and we shouldn't make that process too easy.

Control panels and affordable server renting and colocation services. This has lowered the entry level quite considerably, for those establishing a hosting service. Then there's even lower entry levels available such as a reseller account. I am thankful for this low entry level. It allowed me to build a business with next to no capital, other than sweat equity, and get to where I wanted to go. :)

I do understand cowabunga's frustration, given the public has a very limited understanding of what differnciates a Tier 1 provider from a host with a couple of servers sitting in a colo. To the public, both hosts look the same. Both could have flashy websites, have all the technical lingo, and basically look the same. They don't know any different.

If hosting was restricted only to the Tier 1 providers (own DC etc etc), instead of a Tier 1 host having 125k clients, they'd have 1,250k clients. The saturation of the market through low entry levels, has in some eyes, stolen marketshare from these Tier 1 providers, so 50,000 hosts like me, is a real threat to the Tier 1 providers.

(figures just examples) I have a lot of respect for you Bob but you are fractional minority and ironically the dearth of “small businessmen” like you is actually the root of the problem : ) - I couldn't care less about market share or organic growth I know how to grow a company without non var reselling and generate industry leading margins- this is hardly rocket science. What I bemoan is the degradation of this industry and lack of innovation; which I directly attribute to the non-VAR reselling model. I believe firmly in small business I do a lot of start up consulting in the tech/ military sector pro bono- and the approaches, innovations and sheer drive never ceases to amaze me. In the hosting sector the provider tiers are now segmented so that there is no innovation at the entry level and very little at the md-level I’m amazed at how many medium sized companies can’t develop their own control panels or realize the efficiencies they and custom billing systems represent- Resellers are mere salesmen, they cannot develop or innovate product, service or anything else for that matter. Large DC’s are set up to operate on fractional margins and really just provide cookie cutter boxes and service of varying configurations wholesale- If there were higher bars to entry there would be qualified start ups innovating, forging changes in small DC operational paradigms and overall, contributing to growing the industry. The # of resold accounts market-wide is not a growth marker, it’s rather death knell. So yes, to me resellers are killing the growth of the sector. As I've said before, the major reseller providers with a foot in the shared retail sector are facing increased margin pressures, acquisition rates and cost to serve- Most are slowly transitioning growth models around affiliates and a few of the smarter ones are developing better CRM and churn intervention. The cost to provide resold provisioning and support has already exceeded it ROI- so eventually resellers on a wholesale basis will disappear. Thankfully . I’m sure that you’ll be fine.;)

Where to even start.....

Wow, talk about your inapplicable analogies. First of all GM is a manufacturer. They use franchises (ie, dealerships) because WalMart isn't carrying cars (yet). That's the ONLY reason, mind you. It's very, very rare to find a manufacturer that actually acts as a retailer as well. Can't think of an example.

I can.
any of a hundred sport supplement companies (avant, anabolic extreme, etc....)
sony
samsung
<insert other electronics companies here>
structure
american eagle
abercrombie
<insert other clothing companies here>
jones soda (http://www.myjones.com/) (http://www.myjones.com/%29) The television examples are more of the same. They aren't retailers, they are manufacturers. NBC and ABC manufactures television shows. Comcast and Dish Network retail television stations.

Why do ABC and NBC then own many of their affiliates????

And you mean Dish network and Comcast retail TV stations like UniversalHD, CNBC, MSNBC, and Fox News? All stations wholy owned by, you guessed it, the network.

Hosting companies don't manufacture anything. Simply put, hosting is a hybrid of Software As A Service and hardware leasing. Hosting companies ARE the retailers. A better example would be Walmart offering you ownership of a Walmart, at cost equivalent to 10 boxes of cereal.

More FUD. I will use us as an example. We have written software that helps us throttle and provision our resources. Granted those resources were not manufactured on an assembly line in our office, nor do we own the fiber from our servers to your house, but GM doesn't make the steel/aluminum/titanium that goes into their cars either. TV Networks rarely own satellites they use for live remotes - they lease transponder time.



No, you are wrong there. They fail because they don't use the common business rules. I'd say the golden rule of business is simple: don't create your own competition.

Actually, I guess I was right. I said they fail because people think business rules do not apply to the hosting industry; I would be wrong if that is dissimilar to what you said.

Unless you'd like to tell me of a business that successfully creates its own competition?

GM. They have Chevy, GMC, Cadillac, Buick, etc. Much like hosting companies have different lines/categories of packages/services.

Karl what sort of service are you referring to? Picking up the phone?


Yes. Customer service is more about communication and setting expectations then anything else. 90% of our service requests are answering questions that require no technical action on our part.

Certainly, and I hope I didn't come across as someone that wanted anyone dictating what a business should do. I love free market economics, even though it occasionally annoys the crap out of me.

And I'm not sure I'm completely against reselling. However, IMHO if that's what you are going to do, then do it. I don't see any sense in offering reselling in combination with shared hosting, unless it's VAR as cowabunga suggested. Just seems odd to me.



Well I certainly wouldn't want Tier 1 providers in an oligarchy. My company was never even a wort on a Tier 1 providers behind. But I would love to see the reseller market disappear to a degree. A higher overhead would certainly raise the bar of entry. And while I have a healthy respect for the few that started as resellers and grew to respectable hosts, they are 1:1000 for hosts that start as resellers and end there (with loads of unhappy clients).
Justin you're on-point in all your posts (nice to see an experienced point of view besides Bob, John Crowley and a few others) Of course it's not about just having a few large mega-providers- It about innovation and the lack thereof. As long as large providers are too stupid to grow without polluting the market with resellers and market entrants are mere salesmen, this industry will continue its downward spiral. It's the smaller and medium sized businesses with a colo or small DC and 20 - X# of employees and the knowledge and experience to push business process and customer acquisition forward. As long as they innovate instead of emulate lager players, they're the potential for the industry.

Business wise, I don't own the company or the hardware, I just work for a larger company running the divison and the company decided to do webhosting as a side project. They provide the building (2 story ), they provide an OC3 from COX, they provide the security and the phone systems, etc. Overall I don't know if you could say we have a datacenter, I mean it's just a building with racks, an OC3 line, and power.

Income wise, most of our market is local. It's very difficult to compete with all the companys on the internet today, even keyword wise, all a customer sees is a bunch of names with prices flashing in their face. I'm sure if one has a massive budget and a well known reputation from word of mouth that they wouldn't even need to advertise keyword wise but since I work for a company, then I must keep everything cost effective as possible.

. . . What I bemoan is the degradation of this industry and lack of innovation . . .
What type of innovation do you mean? I've seen hosting as a supplying picks and shovels kind of business, and there's only so much innovation there.
. . . I’m amazed at how many medium sized companies can’t develop their own control panels or realize the efficiencies they and custom billing systems represent . . .
The problem there is that by the time they're a medium sized host, they have a few hundred servers and all their clients are using their existing control panel. To build and implement your own, over those hundreds of servers and many thousands of clients, would be in my mind a nightmare scenario. Do they start their CP on new servers and slowly work their way back into the existing servers? You can imagine the support increase if they implemented their CP at once accross their server fleet.
I’m sure that you’ll be fine.;)
Justin said it, as a host he's not even a pimple on the bum of the Tier 1 players, but damnit, I want to be the best darn pimple I can be. :D

but damnit, I want to be the best darn pimple I can be. :D

AussieBob - the biggest boil on the @rse of the internet - kind of has a ring to it ;)

Im sorry for having to post this.
But are you saying $25,000/yr. ?
If their ppl here on these forums pulling 25K a yr. from hosting and stuff, their doing extremly well in my opinion..were im from in the USA, ppl are rich if they make 25K / yr...im really shock to learn that ppl make that much from this.
Please let me know if im wrong about this.
Thx,

Um....what part of the U.S. are you in? In VA (where I live), that's what you get paid when you drop out of high school and get your G.E.D. In other words, a pittance. :-/ It would be interesting to hear where you live.

var reseller channel.

cowabunga, I think you are bang on. Reseller channels will always be required, and in every business - however, the key to your points, and what is often missed - is your reference to "var".

Reselling hosting without any value add does nothing more then create competition for your own offering (every company tries to avoid channel conflict :) ). There is no added value and the price war rages on space and bandwidth with "companies" that do not control their infrastructure, provide no value added service, etc... The only thing that is accomplished is creating competition for your own product and effectively creating a price war with yourself.

VAR Reseller hosting, in my opinion, has a very legitimate and important place in the market - as with any other distribution channel, you are opening and exposing your service to new markets. Developers, designers, application providers, ISP's etc, etc, etc have a very large requirement for hosting services with their value layered on top - and most importantly, you are gaining access to their client base, albeit, idirectly.

I've always maintained that I don't mind people doing it as a hobby. The fact is, 99% of us run a Web hosting company because we enjoy it, so I guess we could count that as a hobby. I know what you're getting at though. Doing it as a hobby is fine, as long as they go about it the right way and provide customers with a quality service. However, Web hosting tends to have a lot of people who do it as a hobby who don't go about it the right way...

As others have said, anybody and everybody can start offering Web space. Pricing and availability are factors in this ease. However, just because everybody can offer Web space, it doesn't mean everybody can start a Web hosting business. There's a big, thick line between being able to offer Web space and being able to run a Web hosting business.

That's a risk for us all, but the risk is so small it's hardly worth noting. You'll probably lose one customer in every 100 because they failed in their own business attempt. In all honesty, I pity anybody who enters the budget market of Web hosting. It's so much harder than the business/premium Web hosting markets, in my opinion. By offering premium Web hosting at higher prices, you tend to end up with a better customer base who require less support (hence lower support costs). You tend to get less fraud orders. Your profit margins on servers tend to be higher. Of course, I wouldn't advise you to enter the premium market either.... because that's where I am and I want the least competition possible. :D

There is, or at least there would be if it was better enforced... business registration fees.

That was discussed in Vegas last year during HostingCon. It's generally agreed it is a good idea, and there are some big companies willing to back it, but it turned out to be a lot harder than anyone first imagined. Some day... I hope.

99% of WHT may run hosting companies as a hobby, but 99% of the business represented on WHT do not host 99% of the websites worldwide. As you identify, WHT is a meeting place where smaller hosts can come and talk about their world domination plans or to further their hosting knowledge.

Hosting is an easy market to setup a "business" in. Most will fail, but nevertheless the cost of setup is incredibly low and this has been recognized by the younger, net savvy population. This results in the number of kiddy hosts.

Whilst regulation may occur to greater levels (data protection act, ISPs reporting to government and DPA schemes in the UK), you can never charge a business registration fee. International law has far more important things to worry about than a small business area.

Customers may be burnt by less established or less than desirable hosts, but the big hosts in the industry don't particularly care. They will continue to acquire customers, some of which have been caught out in the past and they will succeed as they drive their business forward. One man bands starting up then failing can only reinforce their success as a big player in the market; why would they want it to change?

It's very simple, eliminate non-var reselling. No reseller accounts; no garbage, unqualified hosting. Things will go back to where they were in the late 90's with only qualified players in the market. I’m doing my part….

Easier said than done. Tier1's cannot provide the services that many consumers demand. Eliminate the traditional reseller hosting account, fine. But it isn't much more expensive to rent or colocate a server. And if a web hosting novice, for lack of a better term, goes ahead with this and has no idea of how to run the server, let alone a business, you are left with the same net result.

No , Im not kidding. You just lack the industry acumen and experience to understand otherwise. Why would any business want to create it's own direct competitive market clutter through wholesale, under margin pressure? The answer is it wouldn’t unless it was unable to grow through normal organic full retail channels, which is the case with most hosts that resell. Resold accounts in the same secgment other than VARs are just clutter, they lower the bar overall, providing garbage unqualified market entrants, decreased consumer confidence and ultimately increase cost to serve to the tier 1 which usually leads to a forced sale when they hit the wall. When I evaluate a host in the shared sector and see reselling into their own market it basically illustrates that the given host is too stupid to grow otherwise. I wouldn't expect anyone on a hobby board to get it, most think a large host is one with 5k customers... oh well.

The tier1's created such a marketplace themselves. Telcos and carrier neutral data centers were built at a huge rate during the dot com rush and when the bubble burst, they were left with a very red balance sheet after all the capex, and no one that wanted their services. Given the situation, they pretty much jumped at any business they could get, or sold the assets and move on. The enterprising businessmen and women at the time picked up plenty of datacenters on the cheap during the late 90s...

Justin you're on-point in all your posts (nice to see an experienced point of view besides Bob, John Crowley and a few others) Of course it's not about just having a few large mega-providers- It about innovation and the lack thereof. As long as large providers are too stupid to grow without polluting the market with resellers and market entrants are mere salesmen, this industry will continue its downward spiral. It's the smaller and medium sized businesses with a colo or small DC and 20 - X# of employees and the knowledge and experience to push business process and customer acquisition forward. As long as they innovate instead of emulate lager players, they're the potential for the industry.

Do you honestly think that the large providers will ever get the market penetration that a reseller, targetting their local populace, can?

Internet services are still a big and scary unknown for many individuals and small businesses. They will turn to their local reseller, who can provide them with a local and more personalized service over a large tier1 that may be more financially stable, has quicker support and more technologically advanced each and every time.

And it is going to be some time, and with a lot of education, before this ever changes.

I honestly do.

Yahoo's annual report

Fees Revenue. For the year ended December 31, 2006, fees revenue increased approximately $135 million, or 20 percent, as compared to the prior year. The year over year growth is associated with an increase in the number of paying users for our fee-based services, which numbered 16.3 million as of December 31, 2006, compared to 12.6 million as of December 31, 2005, an increase of 29 percent. The impact of this increase in our number of paying users was offset by a reduction in the average monthly revenues per paying user. For the year ended December 31, 2005, fees revenue increased approximately $216 million, or 48 percent, as compared to 2004 of which $46 million related to acquisitions. Approximately $147 million was associated with an increase in the number of paying users for our fee-based services, which were 12.6 million as of December 31, 2005 compared to 8.4 million as of December 31, 2004, an increase of 50 percent.

This is not just hosting, it is all the subscriber-fee based services including email but it gives an idea of the size of the company. I'm sure GoDaddy has huge numbers as well.

I would say that it is a pretty good bet that every hosting customer in the world has heard of Yahoo. Can anyone on this board make the same claim?

Don't miss understand me I'm not saying local selling doesn't have an advantage or that we are all destined to fail and get eaten up. Just that we, even in our cities (possibly small towns) do not have the market share of a GoDaddy or a Yahoo.

Ya gotta love this line: The impact of this increase in our number of paying users was offset by a reduction in the average monthly revenues per paying user.

Tranlsation: We lowered our prices and only made an EXTRA $135 mill.

Just that we, even in our cities (possibly small towns) do not have the market share of a GoDaddy or a Yahoo.

Granted we do not have the market share of godaddy or yahoo, but, we have a market share - and alot of us on this board have a growing market share - and it is global. I do not think we for example have ever advertised locally, though we probably should start :)

On the whole, I agree with cowabunga in this thread, however, I feel he/she have missed some very vital points. There are some providers on this board doing several million a year in sales - and although they may not be mega corporations, they are legitmate companies, paying taxes, employing personelle and contributing to various countries economies. Overestimated the value of the larger providers (frankly, I do not care how many customers a company has, what really matters is revenue and profit - I can tell you for certainty that 1000 customers for us means more revenue and profit then 10,000 or 20,000 customers for alot of the "big box" providers cowabunga fees dominates the market place - frankly, I see the "big box" providers as a little league for the industry, feeding the most qualified and most important clients up to providers like us - though, in this case, the little league certainly has greater revenue, at least for now) and finally, and most importantly (and I think cowabunga touched on this) is that the big players have dropped the ball in many many respects - and that has opened up opportunities for true value based providers to simply skim the best of their client base with little or no effort.

As such, and although I agree that non var reseller hosting is degrading the industry from bottom to top - the big box providers cowabunga is so impressed with are certainly degrading the industry top to bottom - as they have taken a service and completely moved away from value based selling and have taken a commodity approach to selling a service. If you really want to understand how to sell this service and how to ensure you are in this business for years to come, look at companies like IBM, DELL, SUN, etc. Obviously very few will be able to compete for the same customer base as these providers (though you will be surprised how many projects you can skim from these providers if you know how), the inherent logic of their approach to selling this service is very sound. Pack lots and lots and lots of value into the offering, work with vars that add value on top of your offering (or vars that you add value on top of) and never, ever, ever sell a service on price points.

AussieBob - the biggest boil on the @rse of the internet - kind of has a ring to it ;)
Oy! :mad: :D

As such, and although I agree that non var reseller hosting is degrading the industry from bottom to top - the big box providers cowabunga is so impressed with are certainly degrading the industry top to bottom - I know there's more but this is the most salient. I think you either misunderstood my position or perhaps I wasn't clear. (see my response to Bob) I'm not impressed with much of anything in the hosting business these days, least of all some of the larger aggregators and affiliate whores; it’s really turned into a commoditized brandless, soulless landscape and non-var reselling happened to be the flavor of the day, though there are a myriad of other contributing factors as well. Not good for a service industry… Lazy, desperate tier 1 providers as MDRussel pointed out, did indeed spawn the non-var reselling industry- I fought tooth and nail at that juncture 6 years ago... but brand strategy, business acumen, customer experience and proven marketing are and were foreign concepts in hosting.
My point is that companies like Cartika are the ones that are driving what little innovation exists in this business and I certainly wouldn’t label you as big box - (and believe me there is lots of room for improvement; if only on the operational side. ) and I don't want to see companies fall into the lazy reseller trap- creating competitive clutter and growing and failing in what I can label as only a stupid irresponsible fashion- Moreover, just because some people here think that since that’s the way the industry went and it's all they can muster then it’s ok. There exists no indelible right to be in business, if you lack the experience , expertise and capital, then do something else.

And while honestly you’re correct in stating there are a few legitimate companies here with measurable market share, the rest are irrelevant. My concern lies with the larger companies with larger customer bases that are teetering on the verge of sale because they couldn’t or wouldn’t grow the right way. Their large customer bases are the ones that will be alienated frustrated and contribute further to the negative perception of hosting from the consumer /buy side and falling into the arms of some novice reseller won’t help the cause. You've obviously figured out that RPC or RPU and generating a high value experience to attract high value customers is how to grow in this business- not selling the farm for a short-sighted reseller program because you can't figure out the marketing and growth paradigm in the industry.

Good luck. Keep up the good work

. . . I would say that it is a pretty good bet that every hosting customer in the world has heard of Yahoo. Can anyone on this board make the same claim?
Yet Yahoo offers a very narrow hosting product range, and more for the newbies IMO. Their offerring can cover a rather broad section of the marketplace that they attract, but hosting is much much more than their 3 plans they offer.
Don't miss understand me I'm not saying local selling doesn't have an advantage or that we are all destined to fail and get eaten up. Just that we, even in our cities (possibly small towns) do not have the market share of a GoDaddy or a Yahoo.
That's ok. We don't need their market share to create great businesses, as Andrew has wisely indicated above. :)

In my opinion it depends if its a 25k profit or just revenue!

If you are making a $25k in revenue - then it may not be so good, but if its gross profit then it is much better.

Now if your running as a sole trader e.g. no legal structure - then this is obviously your money, but if your running as a company then this money belongs to the company NOT you. As they a seperate entities you should automatically think - oh theres 10k in the bank - lets go spend it, you can't normally do this - otherwise you will end up with a tax bill and possible legal implications for doing so.

I would recommend anyone who is in the hosting business to go do an accounting paper or at the least getting some accounting books as its amazing how much you can save, and make your money work for you by understanding the affects of assets, depreciation, tax etc and getting around it so you make the most money yet pay the least tax.

Cheers

I'm not impressed with much of anything in the hosting business these days, least of all some of the larger aggregators and affiliate whores; it’s really turned into a commoditized brandless, soulless landscape and non-var reselling happened to be the flavor of the day, though there are a myriad of other contributing factors as well. Not good for a service industry…

Fair enough, I do think I misunderstood your previous comments...

My concern lies with the larger companies with larger customer bases that are teetering on the verge of sale because they couldn’t or wouldn’t grow the right way. Their large customer bases are the ones that will be alienated frustrated and contribute further to the negative perception of hosting from the consumer /buy side

I have been trying for years to point this out on this board, and mostly it falls on deaf ears. I for one have been anxiously awaiting the perverbial "sh** to hit the fan" in this industry - and although I feel for the consumer, their own inability to understand what they are buying, and their own greed will land them in trouble - I honestly believe there will be a MASSIVE opportunity for properly positioned, value based providers and have been personally working towards positioning our company to capitalize on this scenario - my message to the consumers is simply - you dont want to pay fair value for the service you desire? not a problem, but, when it backfires on you, we will not be nearly as afforable as we are now...

. . . I have been trying for years to point this out on this board, and mostly it falls on deaf ears. I for one have been anxiously awaiting the perverbial "sh** to hit the fan" in this industry - and although I feel for the consumer, their own inability to understand what they are buying, and their own greed will land them in trouble - I honestly believe there will be a MASSIVE opportunity for properly positioned, value based providers and have been personally working towards positioning our company to capitalize on this scenario - my message to the consumers is simply - you dont want to pay fair value for the service you desire? not a problem, but, when it backfires on you, we will not be nearly as afforable as we are now...
Waiting and hoping :pray: for some kind of market_wide correction, where hosting clients buck the trend of hosting's history, by seeking out higher charging and thus more stable hosts, is probably giving the hosting public a little too much credit. :D

Waiting and hoping

LOL :)

Hey Bob - Dont worry, you will not need to rely on the hosting public - A few big players drop/consolidate - and the face of the game board will change :)

I am seeing a few such cases in Singapore, hoping for more and I think there will be more to come.

Waiting and hoping :pray: for some kind of market_wide correction, where hosting clients buck the trend of hosting's history, by seeking out higher charging and thus more stable hosts, is probably giving the hosting public a little too much credit. :D

You know, back where bob mentioned how tough it is for a small company with a hundred servers and a bunch of clients, running stable for many years to switch to in house software?

That's me. Well, sorta. See, we built our own control panel running on gentoo, built in full billing and admin features, auto rollout and all sorts of great stuff. But I forgot one thing... how to effectively switch all my clients over...

I couldn't afford to buy new hardware and hire the extra staff to migrate and walk clients through everything.

So... we ended up re-writing everything across the popular cpanel offering. Still adding some tweaks and features. All I can say is make sure your plans are on the ball and considered from every angle. Because a mistake can be costly (in my case, salary for 2 people for a whole year, which may not sound like much to some but to others I am sure it sounds like a lot, and it was to me).

just two cents.

While we're on the subject of large hosts failing....what are thoughts on GoDaddy.com? Is it possible that with their (sometimes unbelievably) low-priced selling structure, we could see a massive failure on a par with that of RegisterFly? (Though it's a different situation, of course.)

While we're on the subject of large hosts failing....what are thoughts on GoDaddy.com? Is it possible that with their (sometimes unbelievably) low-priced selling structure, we could see a massive failure on a par with that of RegisterFly? (Though it's a different situation, of course.)

GoDaddy is quite a bit different than RegisterFly. GoDaddy is a large company with a multi-million dollar advertising budget, and they can get access to new investment funds fairly easily. It's possible that they might need to change their business model down the road, but unlikely that they would go out of business without warning.

While we're on the subject of large hosts failing....what are thoughts on GoDaddy.com? Is it possible that with their (sometimes unbelievably) low-priced selling structure, we could see a massive failure on a par with that of RegisterFly? (Though it's a different situation, of course.)
Highly doubtful, although I suppose anything is possible.

Godaddy has a lot of brand recognition, and Bob Parsons (godaddy owner) is not an idiot.

If he is in financial trouble, the only thing that would keep him from selling to another company would be his pride.

there were reports last year that godaddy was not making a profit.

there were reports last year that godaddy was not making a profit.
Meaningless. There are lots of companies who don't make a profit. These days, it isn't about "profit" anymore. It's about market capitalization, shareholder value, and name recognition.

If the reports are true, I agree that Godaddy can't go on indefinately without making profit.. but they can certainly go for a long time. And if/when they decide to stop, I doubt they'll crash and burn like registerfly. That business was screwy from the very start, and had all kinds of signs of problems along the way.

It's impossible to know for sure, of course. :)

Ok, so maybe we've ruled out failure of GoDaddy due strictly to financial reasons. But mrzippy mentioned Parsons - is it possible that his arrogance could get in the way of sound business practices? Or is the ego we see on his blog and in interviews just a front?

(I know, I know, weird questions. But I just don't think GoDaddy will be around for the long run - just trying to get some other thoughts on the topic!)

You know what though, GoDaddy's Hosting control panel, the last time I saw it, was horrible.

I have a few customers that were frustrated with using it in addition to the fact that it is so watered down. What would be an interesting turn of events if a Yahoo or a GoDaddy implement Plesk or cPanel.

It's just a front. No-one but a shrewd businessman who knew what they were doing could build up a company that large in a short period of time. Whether or not he truly has a big ego he would know when to let something go.

You know what though, GoDaddy's Hosting control panel, the last time I saw it, was horrible.

I have a few customers that were frustrated with using it in addition to the fact that it is so watered down. What would be an interesting turn of events if a Yahoo or a GoDaddy implement Plesk or cPanel.


That just isn't a possiblity at all as far as I can see. All the large web hosting companies implement their own control panels and their is good reason for this. Cost. Licences for all their servers would cost hundreds of thousands of dollars if not millions. They bypass this cost simply by employing a handful of developers to create and maintain an in house solution. It also gives them the added benefit of full control. If they want a feature they can build it there and then without waiting on a third party.

There's a good discussion on the DreamHost blog called 'Build or Buy?' which discusses these kind of decisions which companies have to make as they get bigger.

What does Dreamhost currently use?

I think they have developed their own control panel based on what I've read

25,000 a year is very bad imo, a tech person should be making way more for that level of technical ability

That just isn't a possiblity at all as far as I can see. All the large web hosting companies implement their own control panels and their is good reason for this. Cost. Licences for all their servers would cost hundreds of thousands of dollars if not millions. They bypass this cost simply by employing a handful of developers to create and maintain an in house solution. It also gives them the added benefit of full control. If they want a feature they can build it there and then without waiting on a third party.

There's a good discussion on the DreamHost blog called 'Build or Buy?' which discusses these kind of decisions which companies have to make as they get bigger.
That is a very good point about the licences in my opinion.

But to get to the point where you make your own, you need to build your way up the ladder, by using whats there in the industry, then make the decision to build your own, and grow.

Hello,

For the people who run their own webhosting company, and have established themselves well in the market (running for 5-10 years), is webhosting your personal primary income?

I see the companies which sell, some of the better ones are only turning over £25k annual rev.

If this is the case, why host? There are much better jobs out there for the technical people, and much richer markets for the business men.

Am I completly wrong?

I've been in the biz for three years now. I am making about 65.000 Euros of revenue per year but I have 50.000 Euros expenses so that's 15.000 left to pay my rent, health care and food. That's not good and if I could start again I would do everything different. I am working on it and trying to change it so that I am making at least 25K per year because I need to save money so when I get older and the webhosting industry dies I can open another business.

If you wonder what mistakes I made: First I didn't calculate my prices right. Also I didn't know what I was stepping into (legal stuff etc). But especially I did underestimate the amount of work it would take because I had another internet business that caused a lot less work and I used the numbers I had from that business to calculate stuff and that just went wrong. Another mistake I made was that I thought I could just sit around and work on a computer for 12 hours a day so I hardly did anything but to work for about a year. I hardly ever left the house and after the first year I was so tired and pissed off with it that it became more and more difficult for me to work and do this job... So anybody stepping into this business: Be careful !!

I'm a new comer to the hosting business, but it's not something i havent done before. I've setup on my own a few years back but not had the man power or technology to attract as many people as i wanted to, but todays world, things are different and the hosting industry is wanted much more than it was back then, also, as the Internet is the home to most businesses and freelancers i seem to be bringing in more in my first few months now then i ever did in a year back then. It's mad, but this industry is great, i love every minute and when i am bringing in enough revenue i hope to write more about my success then (as im sure everyone else likes to speak out about their success).


Regards

thankas for the personal insight, glace.