27 October 2011 Reading time: 5 minutes

ISPsystem at whd.local in Moscow

ISPSystem

We have the pleasure of informing you that ISPsystem took part in the international exhibition WHD.local, which was held on October 18, 2011 in Moscow. Members of the hosting sector gathered at WHD.local in Moscow for the first time. 

Julia Nikitina, Marketing director, delivered the report “Starting your own web hosting business”. Today, we have interviewed her and hope that this information will be useful for you.

Statistics say that approximately 300 new hosting companies are set up and launched in Russia every year, but half of them disappear in as little as several months. Julia, tell us, how to start for the first time and what needs to be done to stay afloat?

Julia Nikitina: It is necessary to approach hosting business with all responsibility, just like any other business. It is necessary to consider legal and organizational aspects of hosting-provider’s activity and also to pay attention to the questions related to service positioning on the market and it’s granting to the end user as well. Despite positive dynamics in the hosting industry in general over the past 10 years, there are some companies which could not achieve profitability in their hosting business. We are talking about companies which did not approach the issue seriously enough.

Julia, from your point of view, who is interested in having a hosting business?

Julia Nikitina: We select 3 target groups of users at large. These are the companies for which hosting business is a main business and a field-oriented activity, actually, we mean hosting providers. Moreover, it can be the companies which at some point in time have decided to provide bundled services. Here, we are talking about design studios, web developers, communicative and interactive agencies. Besides, it can be the companies for which the hosting business is not a goal, however, they have decided to diversify their own services portfolio. You see, we are talking about Internet providers, first of all.

Julia, tell us which way is better: renting, per say, shared hosting or cloud?

Julia Nikitina: It all depends on your customer. Nowadays, there are 2 approaches to market hosting services. The traditional approach is when your users rent service packages  with options which were strictly set up. A new paradigm is when your users rent computing capacities. Do not forget that everything new is actually well-forgotten old. You can market a service depending on requirements of your target customers.

There are some small hosting companies which do not license their services. Which licenses does a serious hosting company have to have to provide hosting services?

Julia Nikitina: In Russia, hosting services have to be licensed within the territory of the Russian Federation. To provide virtual hosting services, a license on telematic services is required. If a company intends to provide other kinds of hosting (VPS/VDS, Dedicated, Colocation), a license in telecommunications services will be required as well, except for telecommunication services with the purpose of transferring voice data.

Let’s talk about staff and first of all, about technical support. Obviously, it is difficult to imagine a hosting provider without the high-skilled technical support team. What is a better way of providing technical support services to customers?

Julia Nikitina:  Frankly speaking, every hosting provider has a choice. He can employ people on its staff, or he can use outsourcing services. In the “own experts on staff” business model, one should keep in mind all the expenses associated with wages for highly qualified specialists, their training, social security, and also such expense items as office rental and various accompanying bills.  Not every beginner is ready to incur these expenses. For them, it is easy to transfer technical support functions to outsourcing companies.

I have the last, but least in importance, question about automation. All of us know that some companies already offer those solutions. Is it necessary to apply them or it is better to use less functional, but familiar tools? How to choose one solution which will satisfy a hosting provider on functionality and price?

Julia Nikitina: When choosing a solution for hosting automation, pay attention to tasks which this software can solve, specifically: customers' registration, service orders and processing, invoicing and contracts preparation, and much more. The automation modules should be integrated among themselves. Well, the most important aspect to consider when choosing an automation solution is to follow the purposes of your hosting business.

Thank you for your attention and valuable advice, Julia. We do appreciate it and we are sure that this information will be useful for many hosting providers, for those who are going to run their own hosting business and those who have already flourished in this market.