When starting a Web site, most businesses go the traditional route and pay a monthly fee for Web hosting services. While this fee isn't overbearing for small, informational sites, it can become a goliath when you want to start adding enhanced features such as streaming video, database integration and downloads--or when you start to experience high-traffic volume. Each of these things can drive your hosting charges through the roof to the point that your Web site actually becomes a liability rather than an asset. Under the right circumstances, it may be more cost effective to host the company Web site yourself. Believe it or not, this alternative is not nearly as difficult or expensive as you might think.
Contrary to what many people believe, the most expensive part of in-house hosting is not the equipment, it's the bandwidth. A good Web server can be purchased these days for around $800--almost less than a personal computer. After purchasing the server, however, you need enough bandwidth to make your Web site load quickly and handle all the traffic. A T1 line (broadband internet access about 27 times faster than 56k dial-up) is probably the lowest speed you should go, although you might squeak by with a fractional T1 (only part of the speed a full T1 provides). The problem is a T1 costs between $500-$1,500 per month, which knocks the wind out of most new entrepreneurs. However, there are ways to beat the price.
If you already have a T1 in place for your office, then purchasing a Web server and attaching it to your router makes perfect sense, and it's a great use of the bandwidth you are already paying for. If you don't have a T1 in your office--or maybe you don't even have an office--you may benefit from what is known as "co-location."
Most Internet service providers (ISPs) provide co-location services, which means you buy a Web server and send it to them, and they will actually set it up in their facilities. As an example, XO Communications provides co-location services for $375 a month. This price includes rental of their rack space and bandwidth speeds equivalent to a T1 line.
Paying $375 per month is still quite a hit to the budget, but you can find ways to justify and even leverage it. First, figure out how much hosting your own content is worth to you. For example, if your company sells software, you might find that you could make an additional $2,000 a month by allowing customers to download the software right off of your Web site. This would require that you host 900MB of files. Having your own Web server gives you literally unlimited, free space, whereas traditional hosting charges for 900MB would be extremely expensive.
Once you've determined out how much in-house hosting is worth to you, figure out ways to help leverage the costs by providing hosting to other companies or individuals with whom you have a strong relationship. You can offer low prices that will draw them away from their current ISPs, and while you're adding monthly cash flow to help pay off the co-location charges, you are also strengthening your relationships as you are providing a great service.
So, if your company relies on a Web site that is rich in multimedia, has high traffic, or requires large amounts of disk space, you should consider hosting your own Web site if you can justify the cost. You'll be amazed at all you can do when you have your own server.
Joel Holland, age 17, has been starting and running businesses since he was 12 and is currently the chief marketing officer for Nortel Networks Kidz Online, a digital studio that creates educational content about technology for schools nationwide and in Canada. Holland is ranked in the top 10 nationwide for his marketing skills through DECA, a national organization with more than 300,000 teen members, and was named Business Student of the Year by the McLean, Virginia, Chamber of Commerce. To contact Holland, write to firstname.lastname@example.org.
Joel Holland, 25, is the founder and CEO of Footage Firm in Reston, Va.