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Provider Hosting Expenses
PineappleM
Member
Everyone here (including myself) loves a good server deal, but I am often left wondering how we can purchase servers for a year that cost less than a pizza order (or even a cup of coffee). Obviously, providers' main source of revenue are invoice payments, but presumably there are many expenses to pay to keep the servers up and running.
Some obvious expenses that come to my mind are:
- Hardware (capital) cost
- Electricity cost
- Bandwidth cost
- IP rentals (especially IPv4)
- Support staff
What other expenses do providers incur that many customers might be oblivious to? Payment processing fees? Insurance? Licensing fees?
It would also be great if providers can share ballpark numbers on how much things like network, licenses, IP addresses, etc. cost so we can get a better appreciation of where/how the invoice payments are spent, along with how costs vary across regions (e.g. APAC is usually more pricey than US/EU).
Thanks!
Comments
There's also offsite backups and website hosting (for most hosts)
Licenses for whmcs and the virtualization panel (virtfusion etc)
Remote hands (those cost a lot) basically for every host who has more than 2 locations
Every time you turn around, as you scale up, you will face new challenges and costs. You must be first and foremost adaptable, as at every turn l there is either a price increase, or a new unanticipated cost.
Don’t forget keeping an attorney on retainer (you will need one eventually), CPA/accounting, taxes, software such as Slack/Trello/etc, maintaining a cash reserve for incidentals, and also not forgetting to pay yourself.
Maybe advertising expenses as well? (I am not in hosting business, but it is one of the most expensive line items in my trade.)