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  1. #1

    Question 🙋 A market too saturated?

    Hello all,

    I am creating this thread to get your opinion on this industry. To tell the truth, I would like to invest in this sector of activity but I have heard from people around me that it is too saturated!
    I am aware that this is a sector with a lot of competition, but is there still a way to make your mark?

    Here is how I saw it; In order to have something reliable, scalable, easy to use for customers and to stand out from the competition, I would have liked to set up a panel developed in Laravel and based on the APIs of SolusVM or Promox VE.
    Living in the vicinity of Montreal, Canada, I would also like to have my own infrastructure for quality purposes.

    The goal would clearly be to offer VPS/VDS, because in my opinion, this is a solution that can address the largest number of problems on the market today.
    Do you think this is a worthwhile investment? If so, would montreal be a good solution to serve clients in the east (Illinois, New York, Montreal)?

    How much should I invest in advertising up front? What are the best ways to acquire and retain customers?

    My total budget is about 15,000$ - 20,000$ because I have to save money for a franchise but that's not the point.

    Looking forward to reading your response,

    Brukurt aka Anthony

  2. #2
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    Quote Originally Posted by Brukurt View Post
    How much should I invest in advertising up front? What are the best ways to acquire and retain customers?

    My total budget is about 15,000$ - 20,000$ because I have to save money for a franchise but that's not the point.
    Anything is possible but how competent are you when it comes to the highly technical side of setting this business up? If you aren't a seasoned administrator then either your customers will suffer, or your wallet will suffer so 15-20k while nothing to sneeze at, won't really get you too far unless you slap together off the shelf solutions that everyone else can get and then you become just like everyone else.
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  3. #3
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    Entering web hosting market is a hardcore version of "sell me this pen".

    I doubt OP would take any advice without trying himself, as it's really hard to resist. In worst case it will be at least valuable lesson anyway.

    No actual need to throw 20k away, unless it's a monthly budget for advertising.

  4. #4
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    As a fellow Canadian, I can tell you that it's only saturated if you are knowingly going into the saturated market segment.

    #1 mistake for a lot of hosting companies is that they are racing to the bottom and joining the budget/lowend market. Instead of distancing themselves by pricing to bigger and higher quality clients.

    You will never win against companies that have deep pockets like DigitalOcean, Vultr, etc...
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  5. #5
    Quote Originally Posted by DanielP View Post
    Anything is possible but how competent are you when it comes to the highly technical side of setting this business up? If you aren't a seasoned administrator then either your customers will suffer, or your wallet will suffer so 15-20k while nothing to sneeze at, won't really get you too far unless you slap together off the shelf solutions that everyone else can get and then you become just like everyone else.
    Hello Daniel,

    I don't consider myself a network administrator or anything else besides I have no study in the field, all I know I learned by myself with trial and error. However, I am very comfortable with virtualization technologies, setting up managed IT infrastructures, network configuration, but I know I still have a lot to learn.

  6. #6
    Okay, I understand, but I don't have 20k to put into advertising per month haha

    But what do you think would be the best option? Is it a good idea to buy my own equipment at first? Should I develop my own Proxmox-based panel, or would it make more sense to use a more traditional application like Blesta, HostBill or WHMCS?

  7. #7
    Quote Originally Posted by OpenInternet-Vince View Post
    As a fellow Canadian, I can tell you that it's only saturated if you are knowingly going into the saturated market segment.

    #1 mistake for a lot of hosting companies is that they are racing to the bottom and joining the budget/lowend market. Instead of distancing themselves by pricing to bigger and higher quality clients.

    You will never win against companies that have deep pockets like DigitalOcean, Vultr, etc...
    I didn't really think about selling at a low price in order to fit a small and medium budget, because honestly I don't even understand how they can be profitable.

    I was thinking more along the lines of setting up VPS/VDS servers and maybe dedicated servers at a reasonable price while still being cost effective, then adding a server management service.
    This would allow me to work on a case-by-case basis and to adapt to the needs of each client .

    Afterwards, my objective would have been to contact SMEs and offer them my services.

  8. #8
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    Quote Originally Posted by Brukurt View Post
    I didn't really think about selling at a low price in order to fit a small and medium budget, because honestly I don't even understand how they can be profitable.

    I was thinking more along the lines of setting up VPS/VDS servers and maybe dedicated servers at a reasonable price while still being cost effective, then adding a server management service.
    This would allow me to work on a case-by-case basis and to adapt to the needs of each client .

    Afterwards, my objective would have been to contact SMEs and offer them my services.
    Hey @Brukurt

    anyone can have a start up but success is not for everyone!

    Do you have a business plan?

    What happens when you run out of money?

    What's your exit strategy if you don't have enough cash to keep the business running but have some clients what happens to the clients?

    What's your reputation worth?

    What's your POD - Point Of Difference - why would i choose your business over others? what are you offering to entice me to even engage with you to enquire about your services?

    Do you have an existing business where offering server hosting is a value add and not the core business ? - this will allow you to have an income and grow the server hosting side of the business.

    if you don't have those answers yet go back to the drawing board and answer those questions before you start looking at blowing 15k on servers a website and other things that are not going to generate you any business.

    everyone has servers, can host etc what are you offering that's unique? what is your niche?

    Examples.

    We offer incredible service and support by hand holding your business through every step of the process of X

    We offer hosted X that no other company does - (use Clickup as an example of PaaS - Platform As A Service)

    We Offer PHP/ Python/ XYZ development in house at realistic prices and project manage your custom app from beginning to end

    What's your target audience? - is it other tech people, what would they go with your business over AWS or Azure?

    Is it business people who are not tech savvy - "why would they need a server" ?

    What problem are you solving with your business offering?

    What have you got to offer that's not vanilla as there's a lot of vanilla out there.

    maybe i'm wrong but in a competitive market offering the same as everyone else with no POD is a loosing battle.

    PS you don't need to spell out what you have here in the forum if its your special sauce i'm just trying to get you thinking outside the box and get those core questions answered before you start throwing money at hosting servers and websites.

    If you still want to give it a go but are still working on evolving your idea and POD for your service offering simply resell other existing VPS from other providers and sell your time to deliver and manage those services to make money, this will make your money last longer and then later once you work out what you want to do you can migrate clients to your own platform.

    make the money last as long as possible is my key advise.
    there is going to be a lot of hard work in the beginning to evolve the business so get a plan happening and reassess every 4 months to make sure you are on track and if things have changed change the plan to suite but have a plan!!!


    best of luck.

    ""Cheers
    G

  9. #9
    Join Date
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    Quote Originally Posted by Velocity08 View Post
    Do you have an existing business where offering server hosting is a value add and not the core business ? - this will allow you to have an income and grow the server hosting side of the business.
    Quote Originally Posted by Velocity08 View Post
    If you still want to give it a go but are still working on evolving your idea and POD for your service offering simply resell other existing VPS from other providers and sell your time to deliver and manage those services to make money, this will make your money last longer and then later once you work out what you want to do you can migrate clients to your own platform.
    Legit points. Work perfectly.

  10. #10
    Quote Originally Posted by Velocity08 View Post
    Hey @Brukurt

    anyone can have a start up but success is not for everyone!

    Do you have a business plan?

    What happens when you run out of money?

    What's your exit strategy if you don't have enough cash to keep the business running but have some clients what happens to the clients?

    What's your reputation worth?

    What's your POD - Point Of Difference - why would i choose your business over others? what are you offering to entice me to even engage with you to enquire about your services?

    Do you have an existing business where offering server hosting is a value add and not the core business ? - this will allow you to have an income and grow the server hosting side of the business.

    if you don't have those answers yet go back to the drawing board and answer those questions before you start looking at blowing 15k on servers a website and other things that are not going to generate you any business.

    everyone has servers, can host etc what are you offering that's unique? what is your niche?

    Examples.

    We offer incredible service and support by hand holding your business through every step of the process of X

    We offer hosted X that no other company does - (use Clickup as an example of PaaS - Platform As A Service)

    We Offer PHP/ Python/ XYZ development in house at realistic prices and project manage your custom app from beginning to end

    What's your target audience? - is it other tech people, what would they go with your business over AWS or Azure?

    Is it business people who are not tech savvy - "why would they need a server" ?

    What problem are you solving with your business offering?

    What have you got to offer that's not vanilla as there's a lot of vanilla out there.

    maybe i'm wrong but in a competitive market offering the same as everyone else with no POD is a loosing battle.

    PS you don't need to spell out what you have here in the forum if its your special sauce i'm just trying to get you thinking outside the box and get those core questions answered before you start throwing money at hosting servers and websites.

    If you still want to give it a go but are still working on evolving your idea and POD for your service offering simply resell other existing VPS from other providers and sell your time to deliver and manage those services to make money, this will make your money last longer and then later once you work out what you want to do you can migrate clients to your own platform.

    make the money last as long as possible is my key advise.
    there is going to be a lot of hard work in the beginning to evolve the business so get a plan happening and reassess every 4 months to make sure you are on track and if things have changed change the plan to suite but have a plan!!!


    best of luck.

    ""Cheers
    G
    Hello Velocity,

    I will take some time to meditate on this. You raise some good points, thank you for your valuable recommendations.

  11. #11
    The market is fairly saturated.

    However if you provide a good service, good customer support - You will succeed.

    Companies that are not competitive and lacking in customer support relations won't succeed.

    Marketing plays a big part in success of a business, whilst one company does little to no marketing and has no market share.

    Another company maybe spending $xx,000 and have good ROAS with amazing sales and market share..

    Depending on your location $15,000 - $20,000 is a good starting point however you want to plan for 3-5 years ahead financially.

    Hope this helps

  12. #12
    Competition is always there in one way or other. So it would be best if you planned how you'll survive for 2-3 years before making a start. Don't go for low-end services unless you have too much money to waste. If you understand the business technically then excellent otherwise have a good admin at the start to avoid issues after start getting customers.
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  13. #13
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    You need a niche. Something value added that nobody else is doing. Trying to offer better support, better hardware, better prices is not going to get you there.
    Even then, you should expect it to take years to build up a loyal following of customers. If you can handle that I say go for it. If not, forget it.

    Although I dislike Peter Thiel, you should at least glance over the major points in his book "Zero to One".
    Last edited by UnfinishedSentenc; 04-15-2023 at 09:48 AM.

  14. #14
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    Quote Originally Posted by Velocity08 View Post
    Do you have an existing business where offering server hosting is a value add and not the core business ? - this will allow you to have an income and grow the server hosting side of the business.
    I know I'm a bit late, but yes, this.

    It's 2023 and IMO it's not really worth the time and money to start a hosting/servers business if you don't have other businesses that can be complemented by it.
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  15. #15
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    That would be a good question for ChatGPT


    Make sure you have a strong business plan, secure funding (funding might be the easy part, really) and lot of hours to invest.
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  16. #16
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    This question has been asked for decades. Market saturation in the hosting industry has always been an issue.

    You have to bring something to the table others are not or it will be an uphill battle to be successful.
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  17. #17
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    Not for one second do I believe this industry is over saturated, but like others have said, you need to have a workable business plan and constantly tweak it to be successful. In just April alone, there were 94 new business registrations here locally. If you multiply that by the hundreds of thousands in cities across the globe, your potential client base is unlimited.
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  18. #18
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    Quote Originally Posted by ResellerWiz View Post
    This question has been asked for decades. Market saturation in the hosting industry has always been an issue.

    You have to bring something to the table others are not or it will be an uphill battle to be successful.
    In a saturated market, innovation or innovative solutions will take the lead and creates a niche market.
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