Best of the ISP-Lists

Webhosting 101

Want to start a webhosting company? The ISP-Webhosting list examines a host of options.

[March 30, 2000]

On the ISP-Webhosting list in March, SS started a fascinating discussion with a deceptively simple question:

"I own an advertising company and most of my clients want to get their own websites, so I am starting a webhosting company and am trying to decide what Internet connection I should use to get started. I'll be starting from scratch so I won't have a lot of customers immediately; however, I do want a connection that will suit my needs; I've been looking at ADSL and SDSL, Any suggestions?"

One respondent questioned the very idea of starting a web hosting company and offered an alternative:

[ISP GUY wrote] "I don't know why you want to start a web hosting company, but you may simply want to get a reseller agreement with a local ISP or a large web hosting company. The advantage to you is that you have minimal up-front cost. As a reseller you can get the revenue without the cost or the headaches."

[SJ concurred] "If you want to host web sites for an existing client base in an existing business, get some reseller space to start things off. Why take any risks? Once you are more confident and have several customers, move to co-location; if you don't have the necessary technical knowledge, ensure that you have built enough clients to afford a good tech manager to configure your servers. The final stage would be to provide hosting facilities from your own location."

Other respondents offered advice on starting a webhosting company:

[GC wrote] "The way I see it, you have four options: shared hosting, dedicated hosting, co-location, or in-house hosting. There are advantages and disadvantages to all of these options, but my recommendation would probably be to start with shared hosting as it is easy to upgrade to dedicated hosting should the business grow."

[JER wrote] "Depending on the level of service you hope to offer, start with a Frac T-1 frame relay. DSL is not a mission critical application."

[SS concurred, adding these thoughts] "If you're not downloading huge files you'll probably be fine with SDSL or IDSL (IDSL is a hybrid of DSL and ISDN). But it really comes down to your location and what's available."

One list member warned startups to be prepared for significant up-front costs:

[EY advised] "Just call your phone company or other local provider and tell them you need a frame relay — probably a 128kps T-1 for now, which you can increase as you need it. You will also need a router and CSU/DSU, which will run you near $2000 at the bottom end. The telco or provider will charge you at least $500 to install your frame relay, and it will take 30 to 60 days for installation of the frame relay."

A number of respondents recommended co-location:

[EO opined] "The best performance/price ratio for startups is a co-location or dedicated service. Putting a box in a garage and connecting it to a T1 will not give you what you want. You need to offer your customers better backbone technology, a better internal network and, most importantly, better support and administration."

[TM wrote] "Buy a cobalt, which you can get for about $800, and just co-locate it. Or you could just resell off a server and do a co-location agreement after you get quite a few customers under your belt."

[GS added these thoughts] "In most circumstances co-location offers a great deal, such as reasonably tight security, Halon protection, generator-backed UPS. Most colo facilities have some form of smart hands support so when the pager goes off someone can go push the big red button."

However, at least one respondent adamantly opposed co-location:

[EY wrote] "You can't run a web hosting company using co-location unless you live close enough to the location that you can work on location. There are always times you need direct access to the server. When you have customers relying on you, you'd better be able to restore service ASAP if something does go wrong, or you won't have many customers for long."

—End