Here is my situation...I have a personal friend in the internet development world who has owned his own company for quite a while now that provided development, design, and hosting. In fact I even worked for this person for a while. For this person his real thing is providing seminars on technology related subjects lately he has had some offers from various companies for jobs with opportunities to do what he wants. Because of this he wants out of the hosting deal.

Enough background history, on to details
At this point he owns one server which is co-located with a company called Spacestar (http://www.spacestar.com). This server is a 'custom built UNIX server running Sun OS with Apache Server. It has 3 4gb hard drives, PII and has Raid-5.' (using his words). He bought the server for $4000 a little more than a year ago and is looking to sell it for $1500. As a personal friend he offered me the option of purchasing his accounts (hosting & some regular updating in design and information) he has about 30-50 that he wants to sell (he is keeping some that are near the location of his new job). What he wants as the selling price for these accounts is 6 months revenue, this is between $120-$200 dollars (depending on amount of updating and such necessary). He said he doesn't need all the money up front but would like some. Anyway, the question is should I even consider it? The people he hosts would move upon his personal recommendation and not think twice as long as I provided adequate support and such. What about the server, should I buy it and move it; buy it and keep it where it is (he now pays about $350 dollars a month for bandwith); not buy it and setup a server at a place like VDI or Alabanza? If I should buy a new server, where should I buy it, what is involved? If you could give me any help at all please do so.

Sincerely,

James Dasher

If you say the server is a PII based server, then no way. If it is a PIII based server, you may still want to get more specs on it. Is it running 10000 rpm SCSI drives or IDE drives?

To find out if the server is worth it, get all the specs, and then ask a few vendors what it would cost to buy a server like that from them.

Server hardware depreciates very fast, especially if they are Intel based. If it was a Sparc server it would be a different issue all together, but Intel based hardware is rather inexpensive these days.

Here are some considerations you should think about:

1. Will the customers leave after the switch?
I know this is your friend, but don't ever trust anyones word in business. You will most likely loose a few clients in the transition. You have to figure out how many.

2. Will you be able to support the clients under the current system?
This is the most important. Customers won't wait around until you figure out how to fix things. You should get a list of services your friend is running on his server and familiarize yourself with it. Since you stated he is running Sun OS (Solaris), then you should familiarize yourself with the OS.

3. Will he address my business issues?
What I mean by that is will your friend sign a waiver stating that he will not solicit or take clients from you? This is important. Don't let him sell you a server and then take the clients. I know your friends, but get it in writting. Business is business.

4. What sort of system or infrastructure does he have in place?
Does he have a control panel? What type of tools does he have for you to use? You may want to compare what he has to an Alabanza host or VDI host.

Those are some basic considerations, but you should be very careful. You don't want to be stuck with a failing system and business. He may be able to run it with the current system he put in place, but can you run the company with his system?

Hope that helps.

Nice post jacques.

Thanks Jay!