Planning: Web Site Hosting Myths

Web hosting can essentially be placed into three categories.

  • Virtual Server
  • Reseller Services
  • Dedicated Server

The most economical, and most commonly used, form of web hosting is called a virtual server. This means that, for a fairly low monthly or annual fee, you can contract for all of the web services your need. The resources that are used to provide those services are shared with many other companies. For example, on one web server computer there might be as many as 200 virtual web sites. Each web site will have its own domain name and look to the public (and you) like it is running on a computer server on its own. These services are normally sold as packages that include services with limited disk storage, bandwidth, access to scripting languages like PHP, ASP and Perl and database access.

Generally, this is all a small business requires.

Reseller Hosting — What Is It?
Reseller hosting occurs where a company 'bulk' purchases web hosting services from a large resource provider and then, after subdividing into smaller allotments, resells (actually rents) those services to smaller customers and individual users.

So, a large company like a telecommunications provider, may sell a large block of server and bandwidth resources to a reseller. This reseller (like the distributor in the bricks-and-mortar retail chain) creates smaller service offerings, dividing up the bulk purchased resources, and sells them to individuals and smaller companies at rates they can afford.

This makes it possible for an individual to become a hosting company without having to actually own any resources.

Who Operates the Server?
The server is normally operated by the reselling company and the resource provider will normally manage the resources on behalf of the reseller. However, the reseller is normally responsible for tier 1 (front line) customer support.

Additional functionality is requisted from the reseller and the reseller is generally responsible for deciding whether or not to provide that additional service or services.

So Why not Go Straight to the Reseller Host?
The easy answer is, you probably don't need the amount of resources that the resellers upstream resource provider is selling and can't afford it. To put this in perspective, when you purchase milk, you probably buy a bottle or carton. You could buy a case, and receive a discounted 'per ounce' price, but you will probably not use all of the milk before it has 'expired', in which case you are actually paying for resources (milk) you can't use.

What is Unbranded Reselling About?
Unbranded reselling occurs when the hosting company sells their resources 'invisibly' to the reseller and the reseller creates their own brand using the hosting company's resources as if they were their own.

Should you care about this ? Probably not. As long as you do your research to make sure that the reseller can, and does, actually live up to its service commitments to you, the customer.

Who Uses Reseller Web Hosts?
A lot of web hosting companies are actually reselling the server resources and bandwidth of a larger company and do not own their own equipment. This is a low capital requirement way for someone to break into the web hosting industry. Investment in plant and equipment is kept to a minimum, as are human resources to manage and maintain a data center. The company entering this arena can focus on acquiring customers and developing their revenue stream.

Reseller web hosts are useful for the following type of people:

  • Individuals considering starting their own web hosting company
  • Web hosting companies that need to expand, but are not ready for a dedicated server or data center
  • Individuals that need larger than average bandwidth and disk storage that would normally be provided by a virtual server
  • Companies and individuals that have a large number of domains and domain names that they manage

"Overselling" — What's It All About?
Overselling is used in a number of industries including telecommunications and travel.

In the travel industry, airlines frequently overbook their flights. They do so because they know that not all of the passengers will make every flight. In order to be profitable, they do want each flight to be as full as possible. Occasionally this results in a flight being overbooked and some passengers being offered the opportunity to stay behind and receive a free flight in addition to a rebooking of the one they have volunteered to miss.

In the telecommunications industry, it may mean that a telephone exchange has the capacity to handle 1,000 calls simultaneously but have over 5,000 connected lines (telephones).

On the Internet it means that a company with just 2,000 Gigabytes of disk space on its server may actually sell (rent) 4,000 Gigabytes of disk space to its customers. Likewise for bandwidth. Or, a single server may reasonably be expected to adequately server 50 busy websites but might be actually hosting 150. All of this overselling is controlled by the hosting company to ensure an adequate level of services and availability of resources. They know that not every subscriber will utilize all of their allocated disk space, CPU resources, bandwidth and email addresses.

Overselling allows companies to reduce costs to themselves and these savings are often passed on to their clients.

Software is used to prevent complete overburdening of any particular resource.

Where does Reselling Fit?
Resellers are, as mentioned previously, like the wholesalers and distributors of days of yore. Think of them as the No-Name brands of the grocery store where everything comes in yellow, or the store bulk purchases product and places their own brand name on the product. WalMart and Costco do this extensively. Costco's brand is Kirkland.

I need a Reseller Account! Who do I Pick?
he only way I can answer this is to tell you to do your research. Don't focus on price. Focus on:

  • Service
  • Support
  • Uptime
  • Communication

Yes, price is a consideration, but you should establish your budget, establish the levels of service and support your requirements and then look for the best company to meet your needs within those parameters. Don't just go looking for the most services for the lowest price.

Go to web sites like http://www.sitepointforums.com/ and http://www.webhostingtalk.com/. Search the forums for discussion, look for comments regarding the companies you are considering. Contact the webmasters of the sites that you find that are using the company you are considering. Contact the company you are considering. Ask them about their support, their overselling policies etc.

Communication is critical. Consider how quickly the company you contacted responded. Were their communications with you clear and concise ? Did you detect any undertones in the communication ? If there are any concerns, move on. There are many good companies looking for your business.