| "body"> | | | | have on an individual server is 200 and since Bob is |
| "Bargains for sale, Unlimited Hosting for only a Dollar." | | | | starting out with a new company and no customers, |
| "Get your hosting here, 50 cents for the first three | | | | he can acquire 25-30 customers monthly if he works |
| months. " | | | | really hard at it. To fill a server, they would need |
| "Use now. Pay later". | | | | eight months of growth, and that doesn't include the |
| In today's world of hosting, instead of who's got the | | | | costs involved during that time. The cost of |
| bigger and better thing, it's who has it for the | | | | operation during those eight months is estimated at |
| cheapest and don't forget that they usually it at an | | | | $1700, without any extra expenses and no personal |
| "unlimited level". But if everyone is offering the same | | | | income derived from the venture. If they were to |
| control panel, running off of the same type of | | | | charge $2 per customer on a recurring monthly basis |
| servers or even from the same data center, why | | | | and signed up 25 customers per month, they'd make |
| not get it for the cheapest price you can? The | | | | $100 profit at the end of 8 months. Remember, this |
| reason is, even though the servers may be the | | | | is done without any personal income made at all. |
| same, the service varies with each company and | | | | Once they add in an advertising budget and allotment |
| price. This is not to say that the cheapest can't offer | | | | for person income for Bob and Billy, the cost jumps |
| the best service but always remember the old adage | | | | dramatically. They aren't in the business to make |
| "you get what you pay for". | | | | friends, they are in it to make money and $100 |
| Let's break down the costs involved with running a | | | | spread over eight months is not much. |
| small hosting company that manages a few, low-cost | | | | Let's start adding a small income for Bob and Billy of |
| servers from a reputable data center. The dedicated | | | | $1000 monthly each and an advertising budget of |
| server business has grown within the last few years | | | | $500 per month in order to acquire those customers |
| and competition has created the availability of | | | | and calculate what they need to charge to break |
| unmanaged, low-cost server rentals that can range | | | | even after those first eight months. A safe estimate |
| as low as $49 per month. | | | | would be $3,000 monthly to cover salaries, server |
| For our case study, let's pretend that Bob has leased | | | | cost, advertising and other miscellaneous items. If |
| a server from a reputable data center at an average | | | | they were able to signup 200 customers during the |
| price of $89 per month. He was even lucky enough | | | | first eight months, they would need to charge $15 |
| to signup during a special that waived the setup fees. | | | | per customer to cover the $3000 monthly overhead. |
| At a cost of $89, he now has his own dedicated | | | | If they charged only $2 per customer, they would |
| Unix server running one of the more popular control | | | | need to signup an estimate of 2,000 customers to |
| panels that regular hosting customers like to use. Like | | | | do the same. Because Bob and Billy decided to |
| many small one or two-man hosting companies, he | | | | charge only $2 per customer, they have to support |
| runs the business out of his house as it would be | | | | 2,000 customers by themselves because they don't |
| almost impossible to actually obtain office space on | | | | have enough profit to hire any more technicians. |
| location of the data center, not to mention that he | | | | As a customer, you need to realize these things |
| could be in one state and the server might be three | | | | before you start shopping for a hosting company. |
| states over. Leasing a dedicated server means that | | | | Now that you are educated on the backend of a |
| he is not responsible for the hardware and only has | | | | hoster's life, you can ask yourself what type of |
| to maintain the software. This frees Bob up from the | | | | company do you want hosting your website and |
| added expenses of hardware replacement and allows | | | | what kind of website you need hosted. If you are |
| him to concentrate his investment on marketing, | | | | running a small personal site that doesn't need |
| software, scripts and service. | | | | constant uptime and special scripts, then you could |
| Bob is an extremely good salesman and has a mature | | | | choose one of the many free or low cost hosting |
| understanding of how to run a business. His best | | | | solutions available. If the company was to go under |
| friend Billy has a vast knowledge of managing a | | | | or lost all of your information due to hardware or |
| server and its software, so together; they will be | | | | software failure, then you are really not at a lost |
| able to manage most common aspects of the | | | | because your website did not contain critical |
| business on a day to day basis. | | | | information. |
| They have purchased or designed a nice website and | | | | But what if your site does contain critical information |
| spent the average of $600 for support items such as | | | | and is the lifeblood of your company? Then don't go |
| tutorials and a customer forum. With the website | | | | cheap. Research your options, find the one with the |
| design and extras, their initial investment averaged at | | | | best solutions and don't be afraid to spend more for |
| $1000 which they hope to recoup within the first six | | | | less. It is very important to find a stable company |
| months of operation. Now, this may be an added | | | | with quality support and service and that doesn't |
| cost that some small hosting companies avoid at the | | | | come cheap. Make sure that if your information is |
| beginning, but try to remember, if they are serious | | | | critical, the company offers reliable backup solutions |
| about running a company, they will put some type of | | | | and has a reasonable uptime. |
| investment into it. Taking the initial investment spread | | | | Phone support is a must for quick response and let's |
| over 6 months and adding the cost of servers at | | | | not forget the numbers 24/7. Hosting companies with |
| $89 for the first one, Billy and Bob are spending more | | | | higher price tags can afford to hire the extra |
| than $250 monthly during the first six months of | | | | technicians to hold your hand as you build your web |
| operation on minimum expenses. This does not | | | | presence and your company, which can be important |
| include other expenses such as their salaries and | | | | in today's market. |
| outside expenses such as phone bills (if they offer | | | | But does all of this mean that cheap hosting is a bad |
| phone support), utilities, advertising expenses, etc. | | | | venture and should be avoided? Not really, just |
| An average amount of customers or domains to | | | | remember, "You get what you paid for. |