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  1. #1

    Web Hosting Business...

    Honestly, I'm not seeing new webhosting companies going anywhere. I was thinking on opening a server for some webhosting but when I saw the offers forum I realized there is too much crappy companies that it's not even worth investing on a new one. Even thought you're going to make a good one. With all this crappy companies, the chance to get a SERIOUS customer is 1/1000. Unless you're a recognized company with a lot of advertising and stuff... I'm kind of worried. Where is all this going? I just see more and more ridiculous plans. "$0.50 Monthly For Fantastico, cPanel, RVSkin, 100000GB of Space, 1000000GB of Bandwidth, and more!" I mean. What's up? Am I the only one seeing things like this?

    Maybe my post was useless. But I felt like posting my opinion. I wanted to open a good and stable business with some good income I'm having. I do have a lot of experience on hosting business but I noticed it's not worth it anymore.

  2. #2
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    If you want to be the next host offering "cheap" hosting, you're right - you are wasting your time. Find a niche and it's a good business.

  3. #3
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    Jun 2002
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    If you can't beat them - join them...

  4. #4
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    Heh, I spose I'm one of those very few not overselling.

    You know, I couldn't care less about people who go for those ridiculous offers, it's their own fault for not researching into it. Maybe some time soon, (I doubt) all the kiddie hosts that offer 1 cent hosting will finally realise that they can't do what they're doing, and they will all quit and hosting will be quality, once more.

    Go ahead and start a company, offer realistic pricing, you'll attract educated people needing web hosting, do a bit of advertising here and there, you'll get along fine. Unless you plan to be big, then good luck
    Recommended: Stablehost, Hivelocity, Fused

  5. #5
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    A Gigopolis In The Making
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    Yeah, it depends on how you look your brand and your company. Do you want to make money with the mass market or special group of people.

    We are not overselling too, but we do fine. Just maybe you have to invest in a few things that the big&small guys are not offering,, Stay medium..
    NoFrillsLogo.com - Never pay more for your logo!

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  6. #6
    Even though there are a lot of different web hosting companies there is also a lot of people wanting hosting. More and more people want a website everyday.

  7. #7
    Hosting = rough business

    But, if you have integrity, technical skills, good people skills, and know how to imbue that into the staff you hire through training, you stand a good chance of building a solid business.

    Don't get lured into the trap of thinking you can lower prices and make it up on volume. It's a farce. There is some very interesting math involved that has been well documented by experts on properly pricing products and services.

    Don't forget that good people will not work for a pittance with no benefits. To attract and keep quality staff, you will need to pay them well and train them well. Your prices have to be able to support those salaries and taxes.
    Sincerely,
    Andrew Kinney
    CTO, Advantagecom Networks
    http://www.SimplyWebHosting.com

  8. #8
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    I was thinking on opening a server for some webhosting but when I saw the offers forum I realized there is too much crappy companies that it's not even worth investing on a new one.
    Now that's one hilarious sentence!

  9. #9
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    Mar 2005
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    USA
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    I'll be the first one to say I understand someone wanting to save a buck. However, in reality, that only goes for certain things. If you want quality hosting, people have to understand they need to pay for it.
    I would like to think the industry is changing, although I know better. But I honesty feel people are getting tired of buying a plan from someone with a million GB's for .50 cents or something rediculous like that and realizing pretty fast nothing works and they have no support. Technology is getting better every day, but it's a simple fact, you can only do so much with a server. I think it really comes down to ligitimate companies that offer quality products, service and support or something else.
    Granted the average person has no idea what goes in to running a hosting company, nor should they, but I think more and more people are realizing you get what you pay for. At least I hope so.
    Jim - 2Macs H-Sphere Web Hosting
    Since 2001 - H-Sphere Clustered Shared Linux & Windows Hosting
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  10. #10
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    Nov 2004
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    Some people don't realize that you need to spend more then the cost of a cup of coffee on a months worth of service.

    I find that when you deal with a small business they understand it much more then people that don't own a business. They understand the cost of having staff/building/phone etc.

  11. #11
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    May 2005
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    I agree with Ariel. Also, you do not have to jump into the same pool as those that you find to be "crappy". Build something you can be proud of. And whatever you do - make certain you provide support. That is the key to keeping your clients long term.
    ||| Mike Bowers - Marketing Director
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  12. #12
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    Yeah I was once a young grasshopper like you, ever cautious about being in the business. One thing I did was I made a really good forum, and the people liked the forum so much they bought hosting to support the running of the forum. Most of my customers now are referrals or due to happy customers. If you do a good job at what you do, are honest and nice to your customers, they will, in turn, generate more customers. But I suppose that's true for any business.
    TWC, LLC - USA based w/ three teams behind us!
    We will beat any web development or design quote

    http://totalwebcentral.com/

  13. #13
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    There are a TON of hosts out there that are one-man-shops looking to make a quick buck. They find a reseller host that allows over-selling, signs up and sells that 10000000GB of Disk Space and 200000000GB of Bandwidth. A lot of them woke up one morning and said "I think I'm gonna open a hosting company!". Thats where the main problem starts...

    Like any business (local or online), web hosting requires a well thought out, and organized business operations and marketing plan. You can almost sell ANY type of web hosting (Have it be 10MB of Space or 100000000MB of Space) with a good marketing and advertising plan.

    What you need to do, is not become another one of those hosting companies that offer more than they have! Make your business something that will set you far apart from other web hosting companies:
    - Develop a REALLY good business and marketing plan. Figure out what it is you will do to market. Word-of-Mouth and Local Advertising seems to work best since the online market is way to over saturated for web hosting.
    - Invest a pretty good amount of money into your hardware and servers. Make sure that you are a getting your moneys worth. Don't just get a good deal at Bobs Datacenter... Go with a reliable company and offer a more reliable service to YOUR clients.
    - Dedicate some of YOUR own time into your company. As the old saying goes "If you want something done right the first time, do it yourself" and about 80% of the time thats right. Manage your company yourself finical and staff wise (but do hire another support rep or so to lower the actual work load on you). Just do as much as you can yourself.
    - RESEARCH RESEARCH RESEARCH. There is no way that you can know everything about the hosting industry. It took me a few years to actually find out what it was I wanted to do with my company. This shouldn't be a week or month decision.

    If you plan everything out right, it will actually be a good decision in the end. And it may even turn out to be a good (maybe even a GREAT) thing to get into!

  14. #14
    Join Date
    Apr 2006
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    Quote Originally Posted by crazyfish
    Some people don't realize that you need to spend more then the cost of a cup of coffee on a months worth of service.
    WERD ^^^^^
    Ron S.
    HostingP2P.com - Web hosting resources peer to peer
    Write and share reviews. Find the best web host.

  15. #15
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    Jul 2005
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    Australia - NSW
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    Off topic -

    Quote Originally Posted by djsnowman
    WERD ^^^^^
    Don't forget kids, the higher your post count - the bigger your penis is!

    Just had to say it.

    [/offtopic]

    What you need to do, is not become another one of those hosting companies that offer more than they have!
    Overselling, right? Not a good idea for a newbie.

    I wanted to open a good and stable business with some good income I'm having.
    From what he says, I think he disagrees on overselling, so that's not really good.

    But other than that, you should really read over techpresence's post, it's some really good reading, and advice. I couldn't agree more with what he said.
    Recommended: Stablehost, Hivelocity, Fused

  16. #16
    Join Date
    May 2006
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    Heres my pennies worth..........
    In any business you need a 'USP' (unique Selling Point)
    My solution is I offer 2 types of hosting (not 2 plans)
    Biz 1 = Total Package, Domain, Hosting, Design, Support, everything, I simply do every for the client - Best suited to 'local customers'
    all on my 'premium hosting account'
    Biz 2 = Affordable Hosting, Hosting, Domains, basic (12 hour) support
    all on my 'value hosting account'

    Horses for courses, the odds are better with 2 horses (I have a couple of camels as well, nothing to do with hosting though).

    cheers all
    Brian

  17. #17
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    May 2006
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    Quote Originally Posted by PLineage
    I mean. What's up? Am I the only one seeing things like this?
    The current situation is absolutely insane. Anyone with any business acumen or any knowledge of economics can see that the web-hosting biz is in desperate need of a shakeout.

    There are a zillion tiny fly-by-night companies, undercutting each other and making it hard for legitimate companies to make a legitimate buck. There are countless tiny hosting "companies" consisting of one old guy who got laid off in the dot-com-bust running a rack of servers in his laundry room. There are also countless totally opaque web hosts that consist of nothing but a set of interlocking holding companies who lease or contract for EVERYTHING from their servers to their tech support and don't have any assets or hardly any staff of their own. I currently have a site hosted by a "web hosting company" that consists of FOUR holding companies operating out of the same little office park building, same address, and same phone number (which they never answer). When you call their "tech support" some guy with an Indian accent answers and the same guy is "Paul" on one call and "Greg" on the next one!

    Soon this will all shake out - it's not sustainable as a business model. In 10 years 90%, maybe 95%, of the web hosting companies that exist today will be gone - either out of business or absorbed into larger companies. There will be a few larger, more transparent companies (probably gone public so we can read their balance sheets), plus a handful of niche players. That day can't come soon enough!

  18. #18
    That day can't come soon enough!
    Bravo! I can't wait! I think there is place for small players (we're one), but I am really looking forward to some of the more scammy companies going away.

    Come on! How many datacenters are really out there? From reading the average hosting company web site, they say they own everything and they have many gigabits of backbone connections or at least lead you to believe they do. If you believe them all, there are tens of thousands of datacenters out there. Try figuring out where a company charging $1 a month got the hundreds of thousands of dollars necessary to build even the smallest datacenter. No investor in their right mind would fund any such project.

    If you were to do a poll that people would actually answer honestly, you'd find that there are probably only a few hundred companies that actually have their own datacenter and aren't doing some kind of colo contract with another company.

    That's not to say that a hosting company using someone else's facility is always bad. There are quite a few good hosting companies that don't own anything, but the hallmark of a good company is one that starts out telling you the truth and doesn't stop just because it's difficult when facing the prospect of losing a sale.
    Sincerely,
    Andrew Kinney
    CTO, Advantagecom Networks
    http://www.SimplyWebHosting.com

  19. #19
    Join Date
    Oct 2002
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    EU - east side
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    Soon this will all shake out - it's not sustainable as a business model. In 10 years 90%, maybe 95%, of the web hosting companies that exist today will be gone - either out of business or absorbed into larger companies. There will be a few larger, more transparent companies (probably gone public so we can read their balance sheets), plus a handful of niche players. That day can't come soon enough!
    Thing is, quite a few of the bigger companies that are the most likely players to lead the process you're describing, have the most insane prices. Outsourcing support is not a phenomenon restricted to the hosting business either.

    While having the data regarding a company's finances is a good thing, it's not the end of the world if we don't have access to that data. We do business in some way or another with countless businesses, without first taking a look at their balance sheets, and that's how things should work.

    There are things that must change within this industry, but there's also a lot to be done about customer education. Too many people buy hosting the way they buy their apples.

  20. #20
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    May 2006
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    44
    Quote Originally Posted by ldcdc
    .We do business in some way or another with countless businesses, without first taking a look at their balance sheets, and that's how things should work.
    Not if it's a company I'm going to have along, ongoing relationship with, and whose failure to perform would disrupt my life!

    I don't run a D&B or check the annual report of a company that I'm only making a one-time purchase from. But if it's something I expect to own and need service on for many years (e.g., a car) or if it's something I'm contracting for a long-term, important relationship (e.g., insurance) I certainly do. Web and email service falls into that category so it pisses me off we have to make these contracts blindly.

  21. #21
    I believe the companies should be different from the other. This is the only way. New solutions, new commercial strategies...product, traditional products have arlready commoditized.

  22. #22
    Join Date
    Aug 2003
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    2,733
    Probably the wrong forum for this. As long as you find a niche then you don't have to be ultra-competitive and need to offer crazily low prices.

  23. #23
    You are right. But, interesting solutions could get even better prices / profits, do you agree?Marco

  24. #24
    I started a website with a forum in late 2003. Just to mess round with a couple of friends. People started finding the site and it took off. I was paying for it out of my pocket .
    A group contact me to see of they could use my forum and I said yes. Next thing I know I made a page for them and they paid me. I filed for my business license and another group joined. I did their page and started hosting their site.
    Several members of the groups are business owners who wanted their sites moved to my hosting or wanted me to do a site for them.
    Next thing is I am hosting sites and also running an online store.

    I say start local so people can meet you face to face. This is not my full time job and my customers know this. It is a part time job/hobby for me which I enjoy. Even on those 20 hour workdays ...sometimes

    Honesty will take care of you and your customer.

    Face to Face networking works.

    Thinking locally will take you a long way.

  25. #25
    Join Date
    May 2006
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    The Kingdom of LLAMEDOS
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    Hi
    I have to agree, Honesty is the Magic word
    unfortunately many hosts seem to think it's a weakness not a strength to be 'Honest'.
    My second Magic word would be Open, unfortunately the same hosts seem to have the same problem with this word.
    If your Open & Honest with your clients, the client you have will bring in |more Good Clients.
    If your service & words are cheap, your customers will be the same & will have no loyalty.

    Cheers all (enjoy BH if UK)
    Brian

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