Is shared hosting good B? (6.Viewing)

I have recently been offered to invest in a small shared web hosting business (A good friend from the past who has stayed active online while I have not). I am sort of interested, but I can't find much information online. I have been somewhat active for the last year or so, but I have a gap of about 15 years of online inactivity, so I do not have a decent grasp of how things are.

While numbers make sense in his business, my main concern is how growth looks in it. Would anyone be willing to pitch in some numbers?

Thanks!

Don't do it, the big boys will eat you alive, web hosts come and go, barely any small hosts survive long term unless they get a buy out.

A web host has to be fully redundant, if a server goes down another must be able to take its place. Real redundancy means you need duplication of all systems including the data centre itself. Cost to do web hosting properly are astronomical, it only takes one outage to lose a large portion of your client base.

I've been following the web hosting industry for 25 years. Here are how things are in a nutshell:

• when properly managed (hardware, software, support), web hosting is a stable business with very healthy margins
• shared hosting, out of the whole lineup of hosting products, while commonly the cheapest product, is also most time consuming (most clients per server — more clients, more support requests) with the least profit margin.
• don't invest in a hosting business if your friend's idea is to only compete with one product (shared hosting). At minimum, you want to also offer VPS/dedicated servers where the profit margins are higher, and some of the clients have products to upgrade/grow into.
• this business is all about support, as it is also the only competitive differentiator on the market. Anyone can buy a server and install the same software, it what comes after that makes a difference to a client.
• web hosting is not a get rich quick kind of business. You need to hustle, stay always available, have immense patience, and be prepared for very slow initial growth.
• competition is brutal (there are thousands of other companies offering exactly the same product as you, all over the place), making PPC rates (AdWords) so high that if you were thinking to grow faster through advertising — you can scratch that one off your list, unless you have cash to burn. That's not to say there aren't organic ways to make yourself stand out.