The cocksure title of a book A Complete Idiot’s Guide to Making Millions on the Internet perhaps gives false expectations about the business of web hosting on the internet. If someone is looking to make millions from the internet, one should instead start a software company to rival Microsoft, or a social networking site, and hope that it catches up with the one founded by Mark Zuckerberg. But web hosting is a far cry from the millions many of us associate with computer related business. Web hosting is a profoundly involving business especially at the start and one that calls for considerable patience, passion and technical competence in the field of computer science. Some might not agree with the last requirement entirely, especially now that there are control panels that simplify the process of hosting really for anyone with a business acumen regardless of educational background. The skeptics may be right, as it is possible to lease a dedicated server from a provider and start what one could regard as a web hosting business, but it is equally true that those control panels are imperfect and one may run into trouble if something went wrong and that person has no technical skills whatsoever. There are some important questions that a prospective businessperson should consider before starting the business, and this issue will discuss some of these concerns.

It is important that enough time is dedicated to running the business, as there is no place for an “autopilot” in the web hosting business. Most customers these days want and demand round the clock service. If a server encounters a hitch, it will be grossly unfair for a customer to wait until morning when you start dealing with the problem. This means that if one seeks to run the business as a one man show, he should be prepared to live where the servers are located, as long as the business continues to operate as a going concern! Of course there is always an option of hiring technical support staff, which means one has to be prepared to make significant investment as you will have to pay wages and salaries. The prospective businessperson may also weigh the decision on whether to buy or lease a server. If one has enough resources, he can purchase custom-build servers from a manufacturer. In addition, one will need a provider that can run a line to the server through a router so as to feed the bandwidth. There are companies that offer bandwidth including, Twtelecom.com, Verio.com, Level3.com and Cogentco.com. Each of these companies will allow you to have bandwidth in your data center facility. Those who want to lease may turn to companies such as Dell/HP or Gateway. When it comes to the software platforms, it helps if one is familiar with them and the latest platforms. Will you host on Internet Information Services (IIS) or will it be on Linux based Apache HTTP web server? That’s a question that will require a bit of research to find out which platform is the most appropriate and cost effective for someone. IIS, which is Microsoft’s web hosting platform, is virtually free if you going to deploy on windows, whereas Apache as open source software, it is free, but the training and maintenance costs may prove expensive later. One also needs to decide what kind of hosting is appropriate, shared or dedicated hosting. Shared hosting, as the name suggests, involves one server hosting several websites, whereas a dedicated hosting means that only one website is hosted in a server. Linux based applications tend to be a bit complicated for a non-technical person, so one should be prepared to spend some money for training.

If one is starting a small hosting outfit or has limited resources, it might be prudent to get a reseller hosting package.

There is an administrative part as well. As the business grows, one may be in a position to attract clients beyond borders, and this necessitates opening a merchant account so enable receipt of money from such clients. Among the mostly used are 2checkout, PayPal, Ccavenue, Authorise.net and Worldpay. Another piece of administrative software required is billing software so that the clients may place their orders and renew the same timely. And, of course, you will need to have a good attorney draft Terms of Service which every client will have to accept before providing services, not only to protect you from vexatious clients but also to define the nature of relationship with the client, and which should also provide in details which course of action to be taken when a certain event takes place.

There are two different types of reseller packages:

1st type, FULL Reseller:

At this variant you buy an reseller package with some resources and limits included. Then you create your own packages and pricing for your clients. One may start with a low disc space, say 5 to 10 GB and then increase it as the number of clients increases.you are an REAL Hosting company and you are responsible about billing (you also need your own merchant/payment gateway like paypal, authorize.net,…) and you are also responsible for doing ticket/phone and livechat support to your customers (but that also can easy get outsurced to many available support company’s)

Pros:

- you ARE able to create your own packages and pricing

- it’s your decision how excessively you oversell your customers

- you only buy the resources what you and your customers totally need (NOT what you sell to your clients -> that is overselling J)

Cons:

- you are responsible about the packages and pricing you want to sell (if you oversell your packages – it means you sell more resources as you have for real in your reseller package) and some of your clients uses to much resources you need to upgrade your reseller package or you need to cancel your clients who use to much resources)

what’s your work:

- you need to create your packages and pricing

- you need to signup your own payment gateway / merchant gateway account (like paypal, authorize.net,…)

- you need to do your own technical support (livechat, ticket and phone support – it depends what support options you want to offer your clients)

- you need to do your own sales support (livechat, ticket and phone support – it depends what support options you want to offer your clients)

Some hosting company’s who offers that kind of service:

- YourServing: Linux and Windows shared web hosting in one reseller-account! As add-on you also can sell all other products and packages what YourServing provides (as 2nd option “SEMI” Reseller variant)

- Mifco: Linux Reseller packages and Windows Reseller packages – but not in one reseller package, so if you decide to sell windows and linux shared hosting you need to buy two reseller packages

- Vistapages: Linux shared hosting only

- Hostgator: Linux shared hosting only

2nd type, “SEMI” Reseller

This variant is like 1st option - BUT you NOT can create your own packages you want to sell, you only can sell preconfigured packages to your clients with an fixed discount of the company where you buy (at some hosting company’s you are able to set your selling price, but at this option you are NOT able to create your own packages and package features)

Pros:

- you not have the work to create your own packages and pricing

- you have no “risk” about overselling and you not need to buy additional resources if some of your customers needs to much (but if they uses excessively your hosting provider also will kick them after some time J)

- you automatically can sell all packages what your hosting company offers (if they offers for eample vps servers or dedicated servers you also are available to sell this)

Cons:

- you are not able to create your own packages

what’s your work:

- you need to signup your own payment gateway / merchant gateway account (like paypal, authorize.net,…)

- you need to do your own technical support (livechat, ticket and phone support – it depends what support options you want to offer your clients)

- you need to do your own sales support (livechat, ticket and phone support – it depends what support options you want to offer your clients)

Some hosting company’s who offers that kind of service:

- aplus

- netfirms

- gate

3nd type, “LIGHT” Reseller / percentage affiliate (an variant of affiliate based system)

At this variant you signup for an reseller package and offer the standard packages of the hosting company where you have signed up. Here you NOT need/are available to create your own packages and also you NOT need any merchant gateway / payment gateway. Also live-chat/ticket and phone support is handled by the hosting provider

This variant is not really an Reseller package -> its an type of affiliate based system, if you referral one of your clients to the hosting company you get an percentage commission each sale and also on all recurrent, renewal and up-selling fees of the clients you referred to the company.

The only work with this type of Affiliate/Reseller package is to bring customers to the web hosting company of your choice

4nd option, standard affiliate system

Its nearly exact like 3rd type – but here you ONLY get an ONE TIME commission for each customer you bring to the hosting company (this commission is normal much higher than the first time commission of 3rd type -> BUT her you ONLY get ONE TIME commission, no recurrent, renewals and up-selling of an client