Starting a Web Hosting Business (Chapter 3)

By Scott Seong

Chapter 3. Decide on your service offerings and the operating platform

When starting an ecommerce business such as the web hosting, the first thing to decide is products or services that you will be selling which is more commonly known as product sourcing. Choosing a product (or service) that has the demands is the very important decision criteria of any retail business. If product has no demand, you'll have hard time finding the buyers.

Types of web hosting that are available to consumers include shared hosting, windows hosting, sharepoint hosting, vps hosting, managed hosting, dedicated server hosting, ecommerce hosting, and cloud hosting to name a few. You may choose to offer any web hosting service that you can offer to end customers, and you may choose to host services yourself or resell someone else's web hosting. There are many advantages of hosting servers yourself, and there are disadvantages of doing so. You may also choose to resell web hosting services offered by a reputable web hosting company rather than providing the services yourself.

If you wish to provide the web hosting service yourself, you'll need technical knowledge to configure and maintain servers both Linux and Windows; and also be able to find a data center where you'll want to colocate. If you are technically capable of doing this, you may opt to choose this option. However, there are upfront cost associated with this option. For example, you'll have to purchase physical web server(s) for your website, as well as web hosting services; and also incur monthly colocation service fee. If you're just starting out, this option may be a bit costly until you find enough customers to cover the colocation fee. Also, even if you're capable of maintaining Linux or Windows servers, you'll have to set aside your time configuring and supporting your customers (unless you planning on using 3rd party support company).

Another option is to resell web hosting services provided by a reputable company. Depending on the type of reselling plan you sign up, your job will be a lot easier than hosting servers yourself and also providing technical support to your customers. Many reputable companies offer 24x7 technical support on behalf of your company, and provide server resources for you to run a successful web hosting company. There will be no upfront cost associated with this option, and the monthly reseller plan may only cost fraction of colocation service you'll obtain from a reputable ISP.

The third options is the combination of the above two. You'll lease cloud computing resource from Amazon EC2, or any cloud hosting companies; and maintain your own server resources without maintaining physical servers. This option becomes very popular in recent years as maintaining virtual servers doesn't require upfront capital resource, and you can grow your hadware resources as your business grows. This is a great option if you can manage your own servers.

Regardless of the option you choose, you'll also have to decide which type of web hosting plan you'll be offering to your customers. If you resell, your options are very simple. You'll markup a few percentage points of margin to the plans offered by your provider. Or, you may purchase a reseller plan and offer shared hosting plans at a discounted rate. As your customers deman more storage space and bandwidth, you may upgrade your plan accodingly without much risk. When choosing a "seller" web host, you'll have to evaluate the company for reliability, customer support capabilities, SLA (Service Level Assurance), and cost.

If you're providing your own web hosting service by deploying physical servers or using cloud hosting services from 3rd party company, you'll have to configure server resources for each type of services you'll be offering. Some of the most popular web hosting services offed include Shared Web Hosting, Windows Web Hosting, VPS hosting, Ecommerce Hosting and ASP.NET web hosting services. If you have your own physical servers, you may also offer dedicated server hosting. Evaluate your customer requirements and carefully decide what type of web hosting services suits your business. You can always start small, and expand your offering at a later time when your business grow.

You'll also have to decide whether you'll be offering web hosting on Linux or Windows platform. Linux is a lot more popular and cost less to provide as all software required to offer the services are available for free; whereas Windows web hosting requires you to purchase a number of software such as Windows Server, Email Software, and SQL Server database to name a few. The cost of these software could cost thousands of dollars per server, so you'll have to charge more to recoup your investment. Even if you choose to purchase virtual hosting to provide Windows hosting services, it will cost more to lease Windows virtual server than the Linux vitual server.


Product sourcing is one of the very important aspect of ecommerce business. Whether you'll add more servers to source your own web hosting services, or resell someone else's web hosting services; you'll have to source a reliable and re-obtainable services. If you're starting out, we recommand that you start small by reselling a reputable company's services and migrate toward offering your own services as your business grows.

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