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VPS Business Economics
seen a lot of offers and startups on the VPS business always talk about geek stuff but nothing about the business side of thinks ...
maybe the experienced warriors should give a piece of advice to all the wanna be VPS CEOs and a tip or two about perfect competition ...
Comments
Figure out how to offer a VPS with 4GB RAM, 8 Cores, 5TB bandwidth, 100GB SSD and a dedicated 1Gbps port for less than $7 per month and you will get all the business here, guaranteed. Good luck!
I imagine owning a small VPS company is like working on a helpdesk dealing with imbecile calls with the added bonus of chargebacks.
Best advice I can give...
1. Write a plan. Don't leave "how to profit" open ended and hopeful. Plan it.
2. Pick an angle that you can be passionate about. Nothing says "I'm here to stay" like a passion for what you're doing.
3. Write a plan. This was worth repeating. Time and time again we see failures here because people thought they could just jump in head first and just figured a solid business plan would develop itself.
4. Don't be a bargain hunter. Providing VPS services on whatever is cheapest right now in the WHT offers section and expanding into whatever is cheapest tomorrow. You'll regret it. Those who don't regret it yet, just wait.
Well... as a person who originally was planning on starting his own company but then ended up getting taken hired by @jarland and @ryanarp, I'll just give you my own opinions here.
Assuming you have all the technical side down in terms of what hardware, bandwidth, etc. down... (and agreements with datacenters set in place)...
Place all of your costs in an excel sheet. This includes everything from additional IPs, license costs (e.g. SolusVM or VirtPanel or anything else), hardware costs, payment costs, domain name costs (seriously I know its only 7 dollars for a year (or less), but this is important), costs of extra parts you want on hand (because things do break and people will complain when you take FedEx or UPS days to deliver), hell if you went as in-depth as me even have it categorized by what date what is due.
Finding out how much money you're paying is the most important (preferably look into the units of yearly because I'm sure you want to be there for the long run), because then you know what you should charge and see how profitable you can be.
Now decide what "standard" profit you want. This is usually in terms of a percentage. Personally, I added this into "costs" (because your time isn't free son).
Now comes back to the technical side. How many clients do you want on the server (remember not to overload the I/O or anything like if that's your thing)?
Determining how many clients you want (at minimum, because every client is different and sometimes you'll overload one server but it'll still run awesome and others you'll underload a server... unless you're not into making sure everyone is happy) per server and then divide it by the total amount.
Congrats you just got your base number to work with!
Now on top of that I (well, atleast for me) factored in the ability to do promotions and obviously have the ability to provide people deals, because that's part of marketing.
Honestly, the biggest challenge is the technical part. The money part should be a breeze (atleast in my opinion, this was the easiest part. The technical part was the most challenging and obviously takes the most amount of time).
Good luck if you're planning on starting!
Edit: Damn it, and @jarland posts before me!
Not at all planning to start!!! I have my own consulting business ...
Honestly, the business side should be simple economics (well, atleast to start with). The technical part is the most important part in my opinion and I believe this is why this community so heavily focuses on it.
I respectfully disagree ...
Actually I'm quite curious. Why? (I'm not offended or anything just wondering if I thought of it all wrong is all)
@HalfEatenPie - to me, being "taken" by someone has vrry negative connotations. What happened?
@raindog308 That's pretty much what happened, but he promised not to press charges.
They decided to steal a half eaten pie joke
I changed it to hire. Haha.
It just happened that I wanted to start one and had hardware and other systems lined up (basically, I had the "lab-tested" part covered, but not the "actual in-field" experience part) but a few things were still missing.
Decided to hold off on that and jarland offered me a spot.
Edit: And jarland still beats me to it! Its just like battles for support tickets all over again!
LowEndJudgeJudy may be needed.
It'll be handled by The Supreme Court of Catalyst Internal Affairs.
@jarland can be Judy
@herbyscrub not really, if you're doing it right you shouldn't get tickets or calls other than sales related. Minecraft hosting on the other hand.....
@BrightBull Yep.
25% of our customer have Minecraft servers with us.
75% of our tickets are to the "Minecraft Support" helpdesk, plus the 2% who submit Minecraft support requests to the "KVM ISO Requests" helpdesk....
My only public tip is don't expect to sell out in 3 months of launch it takes time and effort, if you don't have enough money to cover all costs for 1 year up front and that includes your own expenses to live. I don't agree with doing this part time while working 9-5
Please tell me you're joking.
They must not have a Minecraft server ISO.
@Bodgacutuu What? Minecraft servers use .JAR files, not .ISO's
I couldn't tell if he was being sarcastic or not so I just left it alone
just curious to know. what are the costs to run such business apart from pe as we were doing in the past per AMP of power used.
There's also http://minecraft.codeemo.com/
I've tried that before for my own little server but IMO it's pretty pointless when you can do that same with Debian with Minstall