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Making Money By Web Hosting


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Hey Guys,


I'm just curious what kind of margins are available to make money on web hosting.


Right now I' mainly a VoIP provider / Internet Service Provider, which has decent/so-so margins. I also provide dedicated servers to customers upon request.


I just don't understand how profitable web hosting can be, when a lot of company's are providing Unlimited Everything for $5-10 a month.


Now I even see a company providing $1.67 per month (on a 10 year contract... holy hell?)




Could anybody enlighten me?



40GB Disk Space

800GB Monthly Bandwidth

512MB Ram / 2048 Burst

$45 (roughly per month)


Which I'm guessing would handle about 15-20 customers?


Maybe I'm looking at this the wrong way... ;)



Say for example I charge $7.99 per customer per month for Roughly 2GB HDD, X Amount of Bandwidth


7.99 * 20 = $159

$159 - $45 = $114 profit from 20 customers or $5.7 per customer


Approx 71% Margin (starting to sound good)


But you would need 175 customers to make $1000 per month


I guess the key is to purchase a cPanel license directly and get a dedicated server with a unmetered port?

Edited by Chasem
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The first server with 512mb memory and 40gb HDD is just not enough. Especially the memory. Maybe use that as your administrative server where you run WHMCS from. Even then I would take it to 1gb memory right off the bat. It must be a VPS. I recommend that you not try to serve hosting on one. You can't control what the other VPS users on the box are doing. I tried it myself early on with 2gb memory. Performance and number of inodes was a very big problem.


The other is probably a $100 to $130 dollar monthly box to lease on average. Sat you offered 15gb at 9.00 per month. Probably have 450gb to work with. That would leave you room for a max of 30 clients. That would be $270.00 per month off that box. Most would offer an annual commitment and sweeten the pot by offering a year at $99.00 (2 free months is good advertising). Now that box is worth $8.25 a month per client or $247.50. If you can fill it.


Each box will be different depending on the clients and their usage. One box could be full with very good performance. Another (as othellotech was pointing out) could only have 10 clients on it and be a dog. Again because of usage (and/or abuse...!).


I'm more a hobbyist and don't make my living via my hosting company. Some of the other good folks do and can most likely give you better detailed advice.

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