Thread: New Hosting Company Require Lots Of Products

Can anyone offer me any advice or products - if my idea totally sucks and I am going to loose money just say!

Sadly, you're idea does suck and you probably will loose money. Come up with something original, we don't need any more web hosting or game server companies. The industry is already massively over saturated.

I certainly wouldn't start with one server for both gaming & web hosting. Unless you have the money to this properly, it's just not worth it for you or your customers.

were based in Lincolnshire and we host all of our servers at Node4's state of the art DC-2 facility in Derby. This has the beneift of a high speed fibre to both London and Manchester for redundant Internet access. You also get N+1 air conditioning, UPS and generators not to mention fire supression.
If you want to do this at home/in the office then you are so vulnerble to loss of power or connectivity

Originally Posted by combatcal

Currently we have two Dell servers (both tower form)

You need to get those sold on ebay as quickly as possible, before they depreciate completely ...

Originally Posted by combatcal

Lincolnshire based ADSL/SDSL hosting

There are many, many reasons why hosting-at-home is a bad idea ...

Originally Posted by combatcal

dedicated machines in London/Manchester and virtualising sections for customers.

Possibly, but why introcude virtualisation into the equation ?

Originally Posted by combatcal

Taking out a fasthosts reseller plan

As a starting/short-term plan this might work. There are much better providers of reseller plans than 1und1/FH/SLine/etc, dont fall for the marketing-lies of "unlimited" ...

Originally Posted by combatcal

if my idea totally sucks and I am going to loose money just say

Yes, you're going to lose money, like the 871,219 other people doing exactly the same thing.

Originally Posted by combatcal

We will be starting operations in August 2009.

I am not trying to put a dampener on your parade here but think very carefully about starting a new business during the current economic climate; the profit margins are usually very tight and you do have to invest a significant amount of money up-front to 'do this properly' - very sure that some of us here started off with networks made from bits of string.

Originally Posted by combatcal

Currently we have two Dell servers (both tower form) and require many hosting products.

It is not economical to co-locate non-rackmount servers - they take up far too much space in a rack and it would be cheaper to sell them at a loss, buy rackmount equivalents and pay to co-locate those.

Originally Posted by combatcal

First off we will be selling domains and webhosting (with FTP access) to our customers.

Margins on domains can be as little as 0% - some providers sell domains at cost and make the cost back on selling webspace.

Be wary of tech-savvy customers who will register domains with you at cost but delegate them elsewhere; you won't make any profit out of them.

Originally Posted by combatcal

Secondly we will be selling game servers from many different games.

You need very very low latency to be able to confidently offer games servers; we don't do games servers but we do provide some rudimentary VoIP services which are just as stringent - you are not going to be offering these kinds of services on ADSL/SDSL or from a virtualized platform - depending on the virtualization technology used, a games server can also be very picky about I/O and if you stick heavy I/O bound VMs on a server along with a games server VM, you are going to have a lot of unhappy customers.

Originally Posted by combatcal

We also hope to sell on dedicated servers in the future.

I suggest you start small and prove that you can handle and manage a small number of webservers/mailservers before doing anything else - if you try to take on some of the more established companies who have been doing this for years, you are either going to look incredibly cheap or your customers are going to pound you mercilessly when things go wrong.

Originally Posted by combatcal

Lincolnshire based ADSL hosting (this sucks)

No sane person would try and host from an ADSL line which makes me think that this is a company formed by two mates down the pub who thought they would try and make some money from this Internet malarkey.

Originally Posted by combatcal

Lincolnshire based SDSL hosting (this is very expensive)

This is what you pay for an near-uncontended equivalent to a leased line.

Originally Posted by combatcal

Renting dedicated machines in London/Manchester and virtualising sections for customers.

... and you have to provide value for money over and above what those companies who are renting you the servers are providing - unless the middle-man offers something a little extra that the customer cannot do without, there is no real incentive for your customers to stay with you once they figure out how to do a WHOIS and sign up with your own provider.

Originally Posted by combatcal

Taking out a fasthosts reseller plan (but this only inc webhosting and domains not games)

A reseller plan isn't a bad way to start but you do need to consider that you will then be one of many thousands of resellers who you will be competing with; again, it comes down to offering something that the other resellers cannot - such as local telephone support, face-to-face help with more complex issues, etc, etc.

Originally Posted by combatcal

Co-location in London or somewhere with fast internet link which isn't extremely expensive.

Bandwidth in London isn't particularly expensive but the actual co-location will cost you a little more than other locations.

Originally Posted by combatcal

Probably one server to start - Dell poweredge sc440 with one hdd and 2gb ram. Low bandwith - 10GB/Month.

How can you expect your customers to take you seriously when you are entrusting the entirety of your hosting operation to the well-being of a single HDD ?

For heavens' sake, search Wikipedia for RAID and then consider that even with a multiple disk RAID setup, it cannot protect you against things such as a duff disk controller.

Originally Posted by combatcal

Can anyone offer me any advice or products - if my idea totally sucks and I am going to loose money just say!

I don't think you have really thought through all the potential pitfalls you are likely to encounter with your business plan or how you are going to break even let alone make profit - esp. given that everyone is now tightening their belts and trying to save money.

I have highlighted a few of them above and I'm sure some of the more seasoned regulars here will highlight those which I may have missed.

Originally Posted by TerryFroy

I am not trying to put a dampener on your parade here but think very carefully about starting a new business during the current economic climate; the profit margins are usually very tight and you do have to invest a significant amount of money up-front to 'do this properly' - very sure that some of us here started off with networks made from bits of string

Very true, however if you don't take a gamble then you may not reap the rewards
Equally, would you rather have a person being self-employed or drawing state benefits

Originally Posted by TerryFroy

Margins on domains can be as little as 0% - some providers sell domains at cost and make the cost back on selling webspace

It depends on where you source your Domain Names from, and what type you want to sell
I agree margins on .uk Domain Names are low, but mine are about 20%
However, .com .net are about 50% as I am not sourcing them from the UK
Equally, some people are happy with generic Domain Names so the margin them is nearer 99%

Originally Posted by TerryFroy

No sane person would try and host from an ADSL line which makes me think that this is a company formed by two mates down the pub who thought they would try and make some money from this Internet malarkey

Sounds like some "home hosting" to me
I really do wish the ISPs would react a bit faster, however the usual solution have to this is the poor upload speed
Put a few websites on a home computer and they will soon be really slow!
Thankfully Virgin Media (NTL/TeleWest) have been more proactive recently and just simply terminate service, although they still allow people to do this on the NTL Business package

Originally Posted by M8INTERNET

Very true, however if you don't take a gamble then you may not reap the rewards
Equally, would you rather have a person being self-employed or drawing state benefits

Absolutely.

There is nothing wrong with running your own personal hosting from your own equipment and your own connection; I merely felt that it is wrong for someone to start a hosting business with absolutely no idea as to what is involved as that is disadvantageous to the end-users involved.

Sadly, it is far too easy to set up a Linux box running Apache/MySQL/PHP and sell webspace from it - except most of these admins don't bother to segregate their users from each other properly.

Originally Posted by M8INTERNET

It depends on where you source your Domain Names from, and what type you want to sell
I agree margins on .uk Domain Names are low, but mine are about 20%
However, .com .net are about 50% as I am not sourcing them from the UK
Equally, some people are happy with generic Domain Names so the margin them is nearer 99%

Agreed.

Originally Posted by M8INTERNET

Sounds like some "home hosting" to me
I really do wish the ISPs would react a bit faster, however the usual solution have to this is the poor upload speed
Put a few websites on a home computer and they will soon be really slow!
Thankfully Virgin Media (NTL/TeleWest) have been more proactive recently and just simply terminate service, although they still allow people to do this on the NTL Business package

I don't think there is anything wrong with someone hosting servers on their own Internet connection (one of my own ADSL users does exactly that) but if you are going to sell services from those servers, that is another thing entirely.

Personally, the only thing I would host on an ADSL connection is a secondary or tertiary MX and even then I would have to be desperate.

Originally Posted by TerryFroy

Personally, the only thing I would host on an ADSL connection is a secondary or tertiary MX and even then I would have to be desperate.

Yeah and have understanding customers if it ever gets used at the speed their mail decants. However I take your point, something is better than nothing.. Or you can just pay someone who offers Backup MX services a couple of buttons a month to provide it for you!

Home hosting is fine if you only have one website and not many visitors
However, with many websites and many connections, the other people also on that BT exchange (intended for residential use) may also suffer
Add to that, in most ADSL residential contracts it clearly states that website hosting is not permitted
This is why they would rather give you at least some basic website hosting as part of the ADSL package (typically up to 50MB of webspace)

Originally Posted by M8INTERNET

However, with many websites and many connections, the other people also on that BT exchange (intended for residential use) may also suffer

I respectfully disagree.

As we all know, ADSL is biased more towards downstream speeds rather than upstream speeds and BT connect each exchange using dedicated connectivity which is symmetrical in nature.

Therefore, there is a lot of upstream capacity which is unused and this does not affect the other users who are predominantly downloading rather than uploading.

Originally Posted by M8INTERNET

Add to that, in most ADSL residential contracts it clearly states that website hosting is not permitted

True.

Our own AUP doesn't make such a restriction but we don't sell 'unlimited' ADSL services; therefore, whether a customer chooses to eat up their bandwidth using P2P or by hosting a website, we don't particularly care.

Originally Posted by M8INTERNET

This is why they would rather give you at least some basic website hosting as part of the ADSL package (typically up to 50MB of webspace)

The aforementioned customer in my last post runs their own Windows server with IIS/.NET, etc, etc - we provide free webspace on Linux w/ suPHP but they preferred Windows.

Looking at their upstream usage, I don't think they get a lot of traffic ;-)