So You've Decided to Start a Shared Hosting Company...

In this post, I will explore the various technical aspects that you should consider when launching a shared hosting company. I won't discuss marketing or sales tactics, because that is an entirely different conversation.

Many business people who want to start Web Hosting Businesses go for reseller accounts. Reseller accounts offer a very inexpensive and simple way to get into the business, requiring nothing more than a Pay Pal account and a reseller account at any number of providers. If this sounds like your plan, then you may want to continue reading.

Reseller accounts are great because they have a very low cost (low entry barrier would be the business term.) However, they don't offer the control or security that one would need to really start a business. Here are some things to consider:

  • In most reseller setups I have been able to review, the company hosts their billing software on the same server as their clients.
  • That same server hosts the billing and customers of other hosting providers who resell for the same firm.

This creates two very big problems. First, if another companies users abuse the server and take it down, you're down, your support is down and your billing is down. Second, if some other user does something that results in the server being compromised, then you are also at the mercy of the hackers.

The solution for this would be to start a hosting business with two servers. The first server should be 'locked down' and should only handle billing and support ticketing. Ideally you would separate these two also, however it gets expensive then. The second server would be your first shared account server, and you would put your customers on it. This separates the two aspects of your business (administrative and customer websites) and decreases the likelihood of data breach.

Marketing, sales, design, and everything else aside, one could start a hosting business on the purely technical side by leasing two dedicated servers and building a website, installing a commercial billing system such as ModernBill, Ubersmith, Client Exec or many others (SingleHop uses the Ubersmith system, but that is an entirely different story on its own).

The next thing you need is proper system administration. You need advanced system administrators to handle your servers and keep them running. Dedicated Servers are like pets, you have to feed them, give them attention, keep them alive or they will die. This includes pro-active monitoring of hardware as well as keeping software up-to-date. Since you don't want to start with to much overhead, hiring an administrator to handle your servers on day-one would be a bad move. Instead, you should consider a managed server which basically means that your provider (be it SingleHop or whoever) will use their system administrators to monitor and manage your servers.

I hope this short post helps anyone thinking of entering the market for Shared hosting.

Best wishes,

Dan