Originally Posted by Original Hosting
Firstly thanks to all of the positive replies and constructive crtisisims, they have helped my quite a bit. I have taken on board the comments about me not having much experience with administering a server. Today I found an old PC which I formatted and changed the OS from windows to Ubuntu LAMP server. I am planning to use this as a test server, and am going to try and create a mock hosting company from scratch, so then I will have enough experience to do this should I choose to.
Good luck! It's never a bad idea to start slow. Customer demand will still be high whether you start today, next week, or next month. Get a really good understanding of the back end of things, and you'll be better equipped to handle incidents that come up. You also might want to consider a reseller account with a reputable provider -- that will let you focus more on marketing your company, which is probably the single most overlooked aspect among new hosting startups.
If you do choose to colocate, how close are you to the datacenter? Remember that you'll occasionally have hardware failures, and you'll need to factor your drive time into your downtime.
For cheap servers, I'm still a fan of do-it-yourself work. I've had fantastic experience with Intel's mid- and high-end server boards, both in performance and stability. Stick with enterprise-class gear like a Xeon / Opteron, ECC memory, good SAS drives, and a solid power supply, and you'll be set. The huge advantage to building using commodity gear is that it's less expensive to keep spares on hand. Remember, you'll need to buy at least two of just about everything -- how much does it cost to double or triple up on Supermicro components?
There's nothing wrong with going the Supermicro / Dell / HP / IBM route, it's just that commodity builds can save you a fortune early on.