New Server

June 23rd, 2005, 8:44 am

I'm thinking about purchasing a server, and I was just wanting advice. First of all, here's the deal I would be offering people:

Direct Admin RESELLER Account
3 GB Space
25 GB Transfer
Unlimited domains, e-mail, mysql databases, etc
$20 per month

Do you think I'd have a lot of people sign up? I think there would be demand because it is DIRT CHEAP! What do you think.

I really like the datacenter I'm looking at because I can download at 1MB per second!

The server I'm looking at isn't the fastest on earth, but I think it would be a good start. It's a 1.7 GHz Celeron 1U rack server w/ 512 of RAM (I would eventually upgrade this to 1 or 2 GB) I won't be putting a lot of stress on it though, since a portion of it will be used for testing purposes.

I just want your opinions. Also, any advice on datacenters or people who own servers would be helpful. Thanks everyone.

June 23rd, 2005, 9:07 am

Hi there Casey,

Your price is very expensive for what you will be offering, you may need to do some investigation as to what prices are considered 'realistic' and for what prices. Although dirt cheap doesnt always mean a quality hosting service.

The popularity of your company depends on how much you are willing to invest into advertising. Many have the mind set 'If I build it, they will come' and they will if you advertise and get the word out there, they will. Starting in your local area is always the best way to start. People like to purchase services from companies nearby who have similar opening hours and can offer telephone support when required.

I do believe you can make money if you are smart about it. Offering other services such as website design also makes it easier to get customers on board.

Good luck in your efforts, you will find a wealth of information in this section of the forum, starting with this link:
http://www.ozzu.com/ftopic42930.html

Cheers,
Rose

June 23rd, 2005, 9:22 am

Good advice, thanks.

Also, that's for a reseller account with unlimited domains, not a standard hosting account.

I agree, it would be very expensive if it were for a standard account, but most reseller accounts cost upwards of $25 for half the space. I currently pay that price for less space.

I would probably sell a standard account for somewhere in the $8.00/month range. I haven't decided that yet.

June 23rd, 2005, 9:35 am

Oh I see, my apologies Casey I read it incorrectly.

Yes I think it is a fair price for a reseller account.

My only other advice would be if you are serious about doing it - to put together a comprehensive business plan on how you forsee your business being run.

Credibility is what most successful companies trade on, coupled with a fair price and good service, if you are in for the long haul then your persistance can pay off. Sadly though it will not happen overnight so be prepared to widen your services and products so you can catch a wider range of consumers to remain in business.

You don't to invest an enormous amont of money either, but be wise what you do spend your investment money on.

June 23rd, 2005, 9:55 am

Again, thanks for the awesome advice.

My inital cost will probably run around $800-900. I have a small client base which can cover the variable (monthly) costs, so only my fixed costs will be sunk.

I've been developing a business plan, but I can't decide which type of business to choose? I've heard bad things about sole-proprietorship and I'm considering an LLC (Limited Liability Corp) as they allow for one owner without the liabilities. Any advice? (I'm not too good with the legal stuff)

June 23rd, 2005, 10:31 am

I would not use a Celeron for webhosting. Especially considering you intend to put a bunch of small resellers on it with unlimited databases. Celerons are best suited for static download sites with little or no dynamic applications. Minimum specs I would consider are:

Non celeron P4 2.4Ghz
1GB RAM

June 23rd, 2005, 10:39 am

Definitely a Limited company is the way to go if this is something you want to do in a serious capacity, like you say it also helps protect you if things go wrong.

You'll need a way to take payments, I'd advise against using PayPal soley, I used to be a big supporter of it but now as my company is expanding we have moved towards acquiring merchant services through our bank. Doing this has proved not an easy task as they view this business as being 'high risk' especially since you collect monies in advance for services (we charge yearly) but in the end it is worth it.

Our other option if our bank had not taken us on to provide our merchant service is World Pay. They are owned by The Royal Bank of Scotland - which is a big name in the banking world. It's also a reputable merchant facility amongst some big name customers.

Incorporate into your plan your advertising strategy, if your not well versed in the area you can pick up some great free tips from this guy to help get your started. http://www.cardellmedia.com/

Make sure you have comprehensive Terms and Conditions to cover yourself as well.

June 23rd, 2005, 11:21 am

Yeah, I was kind of wondering about the Celeron. I own one and I'm not a big fan of it.

But... and this is a big point, price is a serious issue. I only have 5 clients right now, and until I build a large client base, I can't afford a P4.

I'm banking on the fact that this Celeron can support at least 50 websites. Do you think I'm asking to much out of a Celeron?

At that point, I plan to purchase a new server and use the origional for testing purposes.

Besides, most of my initial clients will probably use minimal dynamic features with moderate traffic.

Does anyone here have a Celeron webserver?

June 23rd, 2005, 11:27 am

I had one Celeron left about a week ago... I scrapped it, and I think my admins did a gleeful dance as they burned it in a trash can...

Actually, it's not a *bad* processor, it's just not suited for anything too intensive. 50 sites? I wouldn't bank on it. I'd cut that figure in half. We ran 15 sites on it (Linux, Fedora Core 1), none really got high traffic, and only one used a database system to any real degree. Even with a gig of RAM it was sluggish.

We replaced it with an Athlon server, which is what all my servers are now. Never had an issue, and cheaper than the Intel counterparts. Hell, even the Duron performed better than the Celeron...

June 23rd, 2005, 11:32 am

Hmmm, thanks for the warning.

I knew they weren't great, but I never guessed they were that bad. Maybe I'll steer clear of them then.

June 23rd, 2005, 11:45 am

I suggest you get a large reseller on a quailty server with a reliable provider. Build your client base, and then move to a quailty dedicated box. Your clients will expect the very best Casey and you are not likey to get 50 sites on a celie with 512MB RAM that you can share with testing. Unless of course those 50 sites are merely one (1) page and parked. Then you could put 100 on there easy. However Resellers are looking to grow their business as are you. They are not going to stay with you if their site(s) and/or customers are experiencing slow speeds and mysql timeouts. Again for your stated purposes this is not a good move.

Casey wrote:

Hmmm, thanks for the warning.

I knew they weren't great, but I never guessed they were that bad. Maybe I'll steer clear of them then.

June 23rd, 2005, 12:39 pm

I realize I would probably be better off staying on a shared reseller for a bit longer, but I am making enough money each month to pay for the co-location facility.

It's much harder to get business on a reseller program because many people are leary of resellers. (They'd rather go to the source)
Also, I want to be able to manage the server through SSH.

Besides, I'm also a hobbyist, and I don't mind paying for the server.

June 23rd, 2005, 12:46 pm

Have you thought of using a dedicated hosting provider like ServerBeach or EV1 Servers, it's pretty much as good as having the server at your own location without all the overheads, you have direct SSH access to the dedicated box for your sole use. A standard plan is $170 a month for 180 GIG of space.

So its different than reselling someone elses space on a server because the whole box is solely yours.

June 23rd, 2005, 12:47 pm

Just a fair warning about colo boxes: Unlike with a managed server and reseller account, you are 100% responsible for that box, short of the physical network at the facility. There is much more support involved, and a lot more open to go wrong. Dedicated un-managed servers have to be secured, and the admin VERY careful of what they do. Trust me, just because you only host a handful of low-profile sites doesn't make you any less a target to cracking. Also, running a test environment on a production server is one of the top DON'Ts for the industry.

You need to figure out your DNS arrangements, IP addresses, backup solutions, etc as well.

June 23rd, 2005, 1:13 pm

Just to elaborate here ... when not if but when the hard drive in that colo box dies you have to physically go into the DC, replace, format and restore any data lost. Additionally some colo's require you to pay them to do this work for you. As they will not allow non employees access to the racks. As Placid said there are countless issues you could have with your server that you would be wholly responsible for. Colo's should only be undertaken if you are prepared to drop everything whenever necessary to rush to the DC which should be nearby and spend whatever resources are necessary to restore the server ASAP.

If you do not have $200 bucks/mo for a decent unmanaged box and solid backup solution then you should stay on a Reseller, Semi-Dedicated or VDS until your business model can support this. Simply target customers who don't mind, care and/or know you are a reseller. Rushing this (your foundation) stage is going to cost you all if not more in the end when problems arise.

placid psychosis wrote:

Just a fair warning about colo boxes: Unlike with a managed server and reseller account, you are 100% responsible for that box, short of the physical network at the facility. There is much more support involved, and a lot more open to go wrong. Dedicated un-managed servers have to be secured, and the admin VERY careful of what they do. Trust me, just because you only host a handful of low-profile sites doesn't make you any less a target to cracking. Also, running a test environment on a production server is one of the top DON'Ts for the industry.

You need to figure out your DNS arrangements, IP addresses, backup solutions, etc as well.