Starting Up, or Improving, a Webhosting Service

Here are the basic options you need to mull over as you grow your webhosting business.

by Vince Barnes [November 16, 2000]

Space and time
Fundamental to the whole process of webhosting is the server space your sites will occupy. You have a number of alternatives for providing that space, each with its own advantages and disadvantages. Some provide more space for less money; some provide savings in setup and administration time.

For the of you who are building large webhosting businesses, there is little alternative but to have a server farm that you control exclusively. However, you still need to determine whether it is better to operate your own data center or to outsource it and focus on the service side of webhosting.

It's easy to think that if you want to host some web sites, you should first get one or more servers, hook them up to the net, and then jump into marketing and customer service.

Anybody who's tried it, though, knows there's more to consider. Some must consider capital costs versus operating expense—do you buy, lease, or rent? There are support considerations for different operating systems. There is the matter of Internet access reliability and redundancy, and, of course, various considerations concerning bandwidth.

Then there's security, both from the perspective of physical access to the equipment and data files and from the perspective of data safety and protection from loss in the event of hardware failure or other hazards. Exactly where to create the server space you will sell is a very important decision. You must also consider the time it takes to get to market and the ongoing management of the systems.

My place or yours
Keeping your servers in your own place does have some distinct advantages. With physical access to the equipment, you have total control, though with today's remote control software you can get a pretty good approximation! Servers are pretty small, so the real estate they occupy in your offices may not be very expensive compared to the rental space for racks in a data center.

Do keep in mind, however, that a data center provides electricity and air conditioning. This might make a difference depending on where you are. Here in Florida, I have the A/C running 24/7 in my computer room. It may be different in Fiji or Norway!

Then there's the question of bandwidth. If you already have Internet connectivity at your location and have plenty of bandwidth available, you may want to keep your servers at home to use up some of your excess. Be careful! It's easy to run out of bandwidth when hosting web sites, and you don't want to degrade your other services.

It is more or less assumed that if you are seriously considering webhosting, you already have redundant connections. The biggest drawback to keeping your servers at your own place, however, is the question of safety and security.

Do you have the standby generators necessary to hold your systems up in the event of a local power outage? Do you have adequate security to prevent unauthorized access to servers and the data they hold?

Remember that some of your clients may be capturing credit information or even medical or other sensitive information. You must exercise due diligence to protect it. Any data center worth its salt probably has power and security, and pretty good fire protection, too. Are you depending on the local fire department?

Location, location, location
The old maxim from the world of real estate applies to hosting servers also. To get the snappy response that clients crave, you will want to locate your servers as close to a solid, high performance Network Access Point (NAP) as possible. It doesn't matter how big or small you are, performance is everything. If you want to compare different locations, find a web site that is currently being hosted at each location and benchmark its performance with one of the performance analysis sites available on the web.

Two performance analysis tools that come to mind are Web Site Garage and Service Metrics, now both owned by larger companies.

My feeling is that the ideal data center has redundant connections, one hop (or less!) from the NAP and yet is still within driving distance of my location. I take the 24/7 security, fire prevention systems and uninterruptible power as a given.

If I have to sacrifice anything, I would sacrifice proximity and not require that the servers be near me, as long as I can call and have somebody press a reset button for me! Buy here, pay here
Whether you are flush with capital or not,you need to consider whether to buy, lease, or rent. There are tax implications associated with the various alternatives that I am not really qualified to discuss. Your tax advisor should be consulted before making a decision.

Renting can make upgrades or possible hardware failures cheaper. This is especially true if your data center of choice is not within reasonable driving distance. If time-to-market is an important consideration, renting can also offer rapid access to additonal servers. If you need it tomorrow, this is often the only choice.

Renting can also be a lifesaver when unexpected surges in growth happen (we should all have this problem!!).

For a smaller operation there is also another alternative. There are several vendors on the Web who can provide bulk space on their servers. Some of these have sophisticated, Web-based configuration mechanisms whereby you can quickly add a domain, set up email accounts, and create Web and FTP access for a new client inside your "space". This can be a great alternative for a small operation or for a student who is creating and hosting sites to pay for education.

Such vendors include Best Web Pages, 9netave (now part of Concentric), Value Web Web Hosting, and, of course, Exodus.

Up, up and away!
If you have found this article useful and have read to this point, and if you are not already in the webhosting business, then you should be!!

You already know that this can be a lucrative business. Many small ISPs are developing their webhosting businesses to hedge against the competition from alternative access technologies.

On the high end, data center operators can provide services with very handsome bottom lines and at the other end there is a huge, blossoming cottage industry. There is certainly no shortage of clients—there is a list of them in the phone book, every phone book!

I wish you all the best!

—End