How Young Web Hosting CEO's Make Money!by |
"There are literally thousands of web hosting companies on the internet. Many of these companies are started by purchasing a reseller's package and gradually moving up to dedicated servers as their customer base increases. Now how in the world do web hosting companies make money? There are billions of websites on the internet and every form, whether free or not. They have a web hosting company that provides the website with internet access. This is how web hosting companies make money. There are 2 types of hosting plans that people can choose from. The 2 solutions are dedicated and shared. Let's talk about dedicated. With dedicated hosting, the web hosting company buy's a web server from Dell for about $350 - $500. Depending on what the client wants, more memory, more space equals more money. They add it upon request. So let's say it comes to around $400.00. Now the technicians install the operating system, control panel, web hosting manager, PHP, MySQL and other technologies the customer wants. When that's done, the customer receives root access to the server. The payment for a dedicated server varies but typically the monthly payment comes to around $99-$120 per month. That's the lowest payment for a good dedicated server in my opinion. One in particular that rings a bell is http://www.ev1servers.net which has sold thousands of dedicated servers. Sometimes, with extra security and support it can be much more. Now the dedicated server that the web hosting company purchased would be paid for in about 3 - 4 months. Considering the customer is paying $120 per month. After that, every thing else, for the life of the server would be all profit. We're talking about years and years of customers renting a dedicated server or buying and paying monthly payments over and over again. Now that's a lot of money if you have a big client base. Now let's talk about shared. Shared hosting is a little different and most hosting company's operates this way. With shared hosting the server is purchased for about $800 - $1,200 which is what http://www.weblinkhosting.com does. They then allow 150 - 220 customers to store their sites on a single server. Shared is wonderful because it allows customers to pay less and get more. They can pay only $3.95 per month rather than $120 per month for a dedicated server. The only difference is they would have to pay the amount up front and if they ever decide to cancel, the funds that weren't used, it would be refunded. Now if you have about 150 customers paying $5.00 for a 12 month contract and typically renewing every year. You're looking at $9,000.00 per year for that one shared server. Less subtract the $1000.00 for the server, now we're down to $8,000 a year for that server. That doesn't include domain registration, dedicated IP, SSL certificate costs that customers pay. So you can see, if you have a web hosting company with thousands of clients. The business can be very lucrative.
About the Author Tony Tebano has been working in the web hosting industry for over 30 years. He has consulted for weblinkhosting.com, 1300crew.net, capitalregionjobsearch.com and various VoIP Companies.
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