Owning a web hosting company a good thing?

[carjam]

Wondering what the draw is in owning a web hosting company. I understand the competition is fierce. Is it because it is easy to start? How many companies start and then fail soon after?

[ItsComeToThis]

Well, Im not sure of all the statistics, Im sure a Google Search would yield results. With the amount of competition out there, Id guess the failure rate is pretty high. There are so many companies out there offering web hosting services, youd have to have some things that truly set you apart from the rest. Id make sure I have a solid business plan first and met with a financial advisor.

[TWD_Tony]

The problem with the hosting industry is 2 fold - firstly it isn't regulated (like the power & utility companies) which means that any 15 yr old with a bit of IT know-how (and most do these days) are allowed to start-up.
Secondly it is just way to easy to start-up... All you basically need is a re-seller hosting account from one of the bigger companies and a paypal account!

These cheap "kiddie" or "bedroom" hosts probably make up 90% of the failures - they just get bored, or set their plans to cheaply to make any profit etc etc etc.

Another reason for failure is (as mentioned above) too many companies try and force their way into the "general" marketplace... Simple no frills webhosting is covered by the big guys (Hostgator in the USA for example) so the only viable way into this business is to find a niche and market yourself effectivley for your target clientbase.

Now all this sounds like doom and gloom - but it isn't! There are 2 side's to a coin... There are plenty of people who are making a decent living from web hosting and there are also companies that have started out in the last couple of years that are doing okay, just like any other business model - you get out what you put in.
The days of sitting back and watching the money role in are long gone after the dotcom boom and then crash of years ago... But there is money to be made if you have the time and the drive to make it

[OpticEmpire]

Originally Posted by TWD_Tony

The problem with the hosting industry is 2 fold - firstly it isn't regulated (like the power & utility companies) which means that any 15 yr old with a bit of IT know-how (and most do these days) are allowed to start-up.
Secondly it is just way to easy to start-up... All you basically need is a re-seller hosting account from one of the bigger companies and a paypal account!

These cheap "kiddie" or "bedroom" hosts probably make up 90% of the failures - they just get bored, or set their plans to cheaply to make any profit etc etc etc.

Another reason for failure is (as mentioned above) too many companies try and force their way into the "general" marketplace... Simple no frills webhosting is covered by the big guys (Hostgator in the USA for example) so the only viable way into this business is to find a niche and market yourself effectivley for your target clientbase.

Now all this sounds like doom and gloom - but it isn't! There are 2 side's to a coin... There are plenty of people who are making a decent living from web hosting and there are also companies that have started out in the last couple of years that are doing okay, just like any other business model - you get out what you put in.
The days of sitting back and watching the money role in are long gone after the dotcom boom and then crash of years ago... But there is money to be made if you have the time and the drive to make it

You hit the nail on the head, right on.

Its a shame the bedroom operations that give the industry a dodgey feel

[kelkat]

Don't dog the 15 year olds too hard. Some of them are serious about what they are doing and go about it the right way.

I'm going to guess that webhosting is a lot like blogging. Anyone can do it, but not everyone should.

[mtajim]

its good if you can do marketing and have good sales, if u just own it and do nothing then , you wont make any good