OK you've set up your reseller business, and its going well. Your getting regular sign ups and your client churn rate is low. You ask yourself, if I'm so damn good at marketing and customer support, why am I selling someone else's space?

At what point do you decide to move your business up a gear and run your own servers? How much revenue do you need?

In my view until you run your own servers your sitting on a time bomb waiting to go off! What if your Tier 1 host turns out to be the next CI Host?

I think when I will be getting around 40 clients a month I will switch to dedicated servers plus when I have the funds to keep a team of administrators so that clients get good support from me and I can make more clients.

Thank you,

Sure, but you could be reselling for the next CI Host. There are risks whichever level you enter at, it must be safer to be a directory!

I think there should be a organisation which keeps check on hosts and helps entry level people. This organisation should not recommend any one but should stop people joining the bad hosts. Thats the only solution possible because there are very attractive offers from these hosts..

Thank you,

That's the power of forums.

Since your average forum has begun to pount into people the 'U' word is bad I've seen a lot of hosting companies change their wording to exclude that now. That's just one example. The wealth of information of the CIHosts etc of the world is starting to be heard on a wider level.

In regard to the topic, a good time to go dedicated is the same moment you find yourself paying your upstream the same amount as a dedicated server would cost. Financialy it's an easier transistion so you're not playing catch up afterwards. It's very tempting to leap early I agree but to hold off as long as you can will give you more time to select the best host for your needs. There are a lot of $99 servers out there that aren't up to the task, being very under powered for hosting. If you're paying your upstream $400 a month then you'll have plenty to spare for a good ded. option.

The ideal is you start off small, outgrow reselling then make one move to a dedicated provider. From there you should be able to just plug more in as you go till you're larger enough to build your own NOC. Of course it's not always that easy. Even good providers fall out of favour as better ones appear. The last thing you want to do though is to hop all over the place sending your customers into an early grave by having to e-mail them with the news of yet another NOC change

Knowledge is power. The longer you spend on research the easier things will be down the track. Last year saw a ton of people jumping from Alabanza to VDI over a few days of slowdown. Currently those same people are looking at weeks of slowdown and outages, and are jumping to a different NOC again. Is it their fault? Not really. No-one including VDI could predict was was going to happen. If there was fault at all it was that they jumped to quickly. It's a good thing to be concerned about your business (and that of your customers), but it's another to go off half-****ed.

We'd be making more money if we weren't at Alabanza for sure. Those things don't come cheap, but until something appears that will provide a better solution for our customers we'll be staying where we are. They're known for their reliabilty and stability (the servers), and by default then, so are we.

As for revenue, I'd like to think a good ballpark would be $600 per month per server. That's basing it on a $400 a month server with 50% extra for bandwidth overage and incidentals like server setup, mechant fees, advertising etc. That's aside from the profit on top of that you should expect from that outlay - it's just what you expect to spend. It can be cheaper, and it can be a *lot* higher.

Greg Moore

When it comes to the move to your own servers how important is your original choice of reselling partner.

i.e.
if you went with a wholesale host from the start such as www.hostopia.com would the move to your own servers be smoother?

I have a $99 a month webserver. Has more than 60 sites on it now and its shaping up very well. In fact better than i thought.. its the RAQ3 with 256mb ram... Hardly ever goes above 1.00%.

I have a reseller account with KDAWebServices and im happy with that also ... Will soon be getting an account with akashik.

So when i start selling space i think i have three good providers, all provide excellent support and good uptime and all currently in different nocs.

tera-byte
akashik - alabanza
KDAWebServices - VDI.

Good advantage for you being associated with 3...you can test out the support, services, NOC, etc.

One of the biggest problems in this industry is that there isn't a way to tell the good guys from the bad. I tell people what I do for a living and they practically spit in my face and tell me how many hosts have ripped them off. When I tell them our uptimes, they sneer in disbelief and I've had some accuse me of lying.

The customers expect us to give them the shaft, and there is no 'good host-keeping seal of approval'.

But if your ultimate goal is to either:

1. Become a tier 1 provider and host on your own servers.
2. Sell your business to a tier 1 provider.

Moving your customers must be more difficult if their on several different platforms and locations?

I don't think moving sites is any more difficult *really* if they are on the same, or different servers. It's not any fun I can guarantee you that. There a level of detail you have to cover and make sure that before the move goes ahead you're quite sure exactly of WHAT you're moving.

If most sites are little more than html with graphics you can pack 'em up and move 'em out in one foul swoop. A quick check through afterwards to make sure everything lines up and you're done.

Sites with databases need a little more care and attention of course, but with decent backups and dumps it's not too much trouble either.

If you have a good relationship with your customers in many cases they'll do the move for you (as most will have a local backup of their site anyway).

The only real tricky stuff as I see it is connecting up subdomains and the little 'extras' people have built into their sites. CMS is always a pain in the can regardless of course *smile*

Sometimes the old ways are the best - get a pen and paper and write a large amount of notes on each site if need be.

If you're hinting towards what the end user sees as far as control panels and whatnot, thats usually more of a selling technique. People don't mind change too much if it's to their benefit. Hosts shouldn't be changing things unless it is to a benefit so it's a moot point.

Greg Moore