Starting a Canadian
Web Hosting Company

Back to Main - Starting a Canadian Web Hosting Company

Ok, here's a fun one. Apparently MYOB the popular accounting software is now getting into the web hosting market.

I don't blame them, Costco does it, maybe soon Walmart and K-mart will too..

Many people think it is this easy to start and run a web hosting company in Canada:

  1. Get some cheap desktop computers
  2. Install some webserver software
  3. Find Canadian customers
  4. Charge customers
  5. Run to the bank with all the money.

This is where it becomes funny. The 5 step "lets start a web hosting company and run to the bank" quickly becomes apparent after year 1 or year 2 once you realize your up to your knees in mud and there is no where to turn to..

This is exactly how many first-timers in the hosting business (Canada and elsewhere) get started. Until the things that they didn't plan for, start happening, which includes:

  1. Crackers from all over the world breaking into your Canadian servers
  2. Denial of Service Attacks
  3. Exploitable cgi scripts, security vunerabilities in operating systems
  4. Scalability, and sudden burstable traffic loads
  5. Redundancy, and Disaster Recovery
  6. Hardware failures
  7. New virus attacks, social networking panic, other internet disasters.
  8. Research and Development, catching up to the latest internet trends, etc.
  9. Much, much more..

Some companies like MYOB might end up subcontracting out their web hosting division to someone who knows how to do it right, and actually has extensive experience in the web hosting industry. This in turn will shave off the little profit they are making, which in the end, will make web hosting not seem attractive.

When will people learn that the web hosting market is ALREADY saturated. We do not need new hosts. We need BETTER, more mature, better experienced web hosts in Canada.

It is this kind of thing that makes web hosting the joke it is today. People figure that web hosting is an easy market to tackle in Canada, and that's only because they do not see the hidden effort and expense it takes to keep a network running properly.

They see:

a) Server Cost
b) Bandwidth Cost
c) Advertising Cost
d) Tech Support / Billing Admin costs

What they don't see is all the other little costs it takes defending your servers on a constant basis from attacks, traffic spikes, and everything else. Most Canadian business requires quality web hosting and should avoid non-experienced web hosts.