Starting a server business might seem easy. High profitability, simplicity, limited startup fees and overhead, and demand that's through the roof- what's not to like?
However, as this blog shows, you need to make sure you know what you're getting into when you decide to sell servers. As with any digital service company, servers are highly competitive.
What can you do to outperform your competitors and turn your server business into a well-oiled, lucrative machine? How can you displace the competition and create a space for yourself?
At OVHcloud, we take care of all your server hosting questions. Whether you need dedicated servers, VPS, or cloud servers, we're here to provide you and your customers with the solutions that fit them best. Continue reading to learn all there is to know about starting a server business.
What Is a Server?
In layman's terms, a server is a powerful computer that serves information and software to employees, customers, and other computers. Suppose you have 15 employees in an office, each working from a different device. Servers ensure all 15 employees have access to the same software and documents.
Or, let's say you own a web design business and have 10 different clients. Your server can host each of your client's websites on your server so that users around the world can interact with your website.
With servers, your software and documents come from a central computer rather than having multiple versions stored on individual computers. This allows for unencumbered file sharing which streamlines in-house collaboration.
Steps to Starting Your Server Business
Starting your hosting company boils down to five simple steps. To sustain success with your server business, you need to:
- Find your niche.
- Conduct competitor research.
- Choose which servers you need.
- Create a thorough business model.
- Launch the business with customer service and support in place.
Find Your Niche
Servers are in high demand. High-demand increases competition. When you're first starting, you won't be able to compete with the titans of the industry. However, if you target a specific group within the market, you can expand your reach and achieve sustainable growth.
One of the primary factors determining your success as a server business is whether you can bring something unique to the table. Unique selling points such as competitive or unmatched price points or targeting specific industries will help your business stand out.
Cater to customer needs that no other business addresses. Whatever your niche, you need to clearly define it before getting into the finer details of your server business. It sets the tone for the rest of your server business model.
Research Your Competitors
After identifying your niche, you need to decide how to separate your business from competitors within that niche. Your business model shouldn't be so specific that you have nothing in common with competitors. However, competitor research identifies what your competitors do well and what they lack.
Understanding what works for competitors and what drives their customers to look elsewhere gives you a distinct advantage. Conducting thorough research will also reveal unique marketing tactics and product offering ideas.
Choose Your Servers
After finding your niche, understanding your competitor's unique selling points, and where they can improve, you need to select your inventory. Luckily, OVHcloud provides companies with different options to make this part of the process simple.
Virtual Private Servers (VPS) are small virtualized environments carved out of big bare metal servers. A VPS is an excellent solution for companies just starting out because it allows you to host websites, email, or small games at the fraction of the cost of a dedicated server.
Dedicated servers are best for clients that require extensive processing or want to create their own VPSs for their customers. Dedicated servers can be an ideal solution for hosting games, allowing your company to create small virtualized game hosting solutions for your customers.
Private Cloud Servers
Dedicated cloud server hosting eliminates scaling and infrastructural needs. Private cloud hosting is also more cost-effective than dedicated servers for large enterprises. They provide much of the benefits of dedicated servers, including peak performance even when traffic spikes, and have the cloud advantage of scaling up or down quickly. These solutions can get rather expensive very quickly and are not ideal if you are just starting out.
Public Cloud Servers
Public cloud servers are scalable and affordable servers that use resources across different servers using a process known as virtualization. These servers have cloud-native capabilities and can run Kubernetes to help your DevOps teams meet software deliverables, ensure quality testing, and ensure high scalability to meet your growth.
When choosing your servers, you should remember there is no one-size-fits-all approach. Instead, consider your client's needs and base your server decisions on your niche and business model.
Create a Business Model
After deciding your niche and which hosting options work best, it's time to dig a little deeper into your business infrastructure. At this stage, you need to strategize branding, pricing, and your business's website design.
The branding portion of your business plan details concepts such as your logo, company name, mission statement, and core values. You should also consider domain names in this section because the server industry is a highly competitive field. Your domain name should be easy to locate and incorporate sound SEO strategies.
Understanding how much your server infrastructure costs and how much you need to charge for a profit will position you to better compete in your niche. You should also consider your competitors' pricing to potentially undercut them and provide more affordable services.
As a digital company, your eCommerce website is the main storefront. Its quality can make or break your business. Make sure your eCommerce website adheres to industry quality standards and matches your brand messaging with its design.
Launch Customer Service and Support
Customer service and support are an essential portion of any business, digital or otherwise. In the digital world, your job is to alleviate the technical stresses that companies don't want to handle in-house.
When running a server business, your clients rely on you to keep their sites running smoothly. If you can't satisfy your customers, they may choose any number of other server providers.
Reasons to Start a Server Business
Who doesn't enjoy extra revenue, especially if that additional cash flow doesn't compromise your other offerings? One of the most appealing aspects of starting a server business or adding server hosting to your service catalog is that it requires little legwork. Outside the initial setup and new clients, server companies don't have high operational costs. Your overhead prices also typically cover your setup costs and offer a substantial profit margin.
Upselling Digital Firms
Suppose, for example, that you run a digital business like a web design firm. You want to add hosting to your packaging options to become a "full-service" organization. Including supplemental services with your offering is an excellent way to gain an edge over your competitors.
Offering direct hosting to your clients ensures you won't have to manage separate users with different hosting platforms. It also simplifies account management and software solutions that need to be installed on client machinery.
It's a Simple Business Model
One of the beauties of starting your serving company is that the web hosting provider takes most of the legwork out of the equation. Web hosting providers take care of the technical aspects and keep services running smoothly.
With a server company, all you have to do is manage individual clients and provide them with the right hosting solutions for their organization.
What to Avoid When Starting a Hosting Company
When starting your server business and your niche, you need to understand your capabilities and your customer's needs. You should only offer services that you can confidently deliver. For example, don't claim to offer VPS, Cloud-native, or customized branding just because other competitors provide them.
Another rule of thumb while starting is to keep your offerings simple. Trying to offer too many products or services may detract from your bottom line and tempt you to overcomplicate your services by expanding too quickly and providing too many offerings.
Conclusion- How to Start a Server Business (2021)
Starting your server business in 2021 should be a simple process that gives you a sizable income. However, if you don't define your niche market, perform competitor analysis, create an extensive business plan, and implement customer service and support measures, it can quickly become counterproductive.
At OVHcloud, we ensure our clients have access to all of the resources they need to run a successful server business. With our dedicated server options, VPS, and cloud-native server options, we make running a server business simple and effective.
Contact us today to see what OVHcloud can do for your new server business.