Growing your web hosting company - Part 2

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Location, location, location

The next step beyond dedicated servers is reminiscent of an old business proverb: it’s all about location. The twist on that old saying is that it’s no longer the location of the storefront that matters but a question of where servers will reside.
It doesn’t take much number crunching to realize that over a long stretch, it’s vastly cheaper to maintain and upgrade one’s own servers than to lease someone else’s for hundreds of pounds per month per unit. The problem is that servers aren’t the most pressing issue at this level of hosting. Redundant electrical resources, backup generators, air condition, proper ventilation, and a 24-hour staff to maintain them all are matters that will impact expansion at this point.
This is where the hosting business makes the vital decision whether to co-locate or host its own datacentre. Having a datacentre means managing everything from within the business, which is no small feat. In fact, in some cases it isn’t even possible depending on the costs and availability of utilities in certain regions, levels of broadband penetration, and so on. And again, staffing requirements are huge.
For these reasons, most hosts settle on co-locating with a professional datacentre. Professional datacentres specialize in all of those incidental issues that most hosting companies would rather not have to worry about. Dealing with such issues in large volume, they are able to provide server hosting at better rates that all but the largest of corporations can by managing their own datacentres.
Relationship is key

One of the difficulties of co-location is proximity to the datacentre. Cost savings aside, how difficult is it going to be to get on-site to make necessary server repairs and upgrades? This is why having a good working relationship with the datacentre is key; and, incidentally, why it’s a good idea to start co-locating even before it’s absolutely necessary.
There’s a good chance that such a datacentre will be outside easy driving distance, so having someone at the datacenter to act as ones “remote hands” is important. Not all datacentres offer this but at the same time some can’t imagine not offering it. By building and maintaining a good working relationship with ones datacentre managers and staff, things like replacing a failing processor or memory can become very minor issues even from many kilometers away.
Conclusion

Ultimately, co-location with a professional datacentre tends to be the best fit for hosting companies ranging from those with modest needs to all but the uppermost echelons of the industry. Unlike reseller and dedicate server scenarios, co-locating servers leaves hosts with plenty of room for growth both on theirs and their clients’ ends. For hosts that got into the business for their love of the technology, co-locating allows them to focus on the technology while leaving many of the irritations for someone else to handle.