How to Start a Web Hosting Business with $50,000.00 USD available in funds: Server Hardware
You are at the point buying your own hardware. Here are some items to put into consideration before ordering parts or fully configured servers. Are you experienced enough to build your own servers or do you feel more comfortable with buying fully configured servers and don’t worry about what parts you will need. If the second option sounds better for you, you should look at Dell, HP, or maybe IBM for your purchase. If you are technically savvy enough to assemble a server from pieces, you can choose to go a different route. Buy your servers at Newegg.com as an example. Pick the parts and pieces you want and need and assemble the server yourself. The SuperMicro servers seem to have a good reputation and you can customize them easily.
Importance should be put on the CPUs, memory, and storage. While dual CPUs are nice to have, for your first servers you might not necessarily need them. From your leased servers you should have experience by now how many websites a specific server configuration can hold. A single powerful CPU with adequate memory and SCSI drive will get you going quite Ok. I just configured a Dell PowerEdge SC1425 real quick with a powerful Intel XEON CPU, 2 GB Memory and dual SCSI disks in a RAID 1 configuration for less than $3,000.00 before shipping and tax. For this case let’s assume that you pay a total of $3,600.00 in the end before the server gets into the data center cabinet. This kind of hardware should be able to last 3-4 years just fine. The support contract I decided to go with covers 3 years and that’s what I am going to use for this example. 3 years = 36 months. Server price = $3,600.00 / 36 months = $100.00 per month actual cost. So, by spreading out the cost over the amount of months you want to use it, gives you a much better idea of how to calculate your services and your prices. It tells you if a server purchase is affordable to you or if you are going overboard. Does a more powerful server for double the price can also hold twice as many websites? Calculate it out before making assumptions. Important: put into consideration things like rack space, switch ports, rack power, support contracts, administrator contracts, and so on.
Get a large disk array, storage appliance, or even a SAN once your cash-flow justifies the expense. Reduce your disk in servers and shift the cost around. This provides you with more flexibility and options? Options? Yes, a non-server storage device can be used for backups of websites. It adds an additional layer of protection in case a server gets hacked.
Add more redundancy to your setup once you can afford it. Redundancy should start on a disk level (RAID 1 or RAID 5 or RAID 10) and then expand to power supplies and network connections in the long run. The additional cost however will pay off in regards to server uptime and stability. And these qualities are what customers are looking for. Less downtime means better reputation for a web host. Better reputation means more customers as well as customers who might be willing to pay a premium price for quality web hosting services.
These things should give you a couple of ideas on what to consider when you get to the point of actually buying your own hardware. Keep in mind that there is nothing wrong with staying on leased hardware and to "outsource" this piece. Let somebody else worry about pricing, hardware maintenance, and all the related pieces. However – no matter which way you will be pursuing, you should plan for hardware rotation in recurring intervals. If you know that the server you got was fairly new and not used, you are probably safe looking for 3 years of usage before replacing the hardware. You will need to plan for this and also start communicating this early enough to the customers on those servers. I know it is early to talk about that yet in the first year, but these are things that can cause you a lot of trouble and problems and it makes a lot of sense to keep them on the radar. Microsoft Outlook’s calendar is a great tool when it comes to schedule things for the future. Set a reminder for sometime in 3 years and you have one thing less to worry about.