Web Hosting Business

Managers of web site hosting concerns should always be on the lookout for unnecessary expenses caused by poor infrastructure or business processes. Because margins are becoming smaller and smaller in certain segments of the industry, such as shared hosting for example, vendors should take proactive steps to ensure that any financial "leakage" resultant from poor practices are eliminated.

Best practices that should be enacted include billing for existing services offered, measuring and billing for services that have not traditionally exacted a charge, and diversifying product offerings.

The first major way that smaller hosting firms lose money is by not billing their existing client base. As their customer base grows, errors in bookkeeping often occur, leading to lack of accounting for some clients. Companies should carefully scrutinize their financial records to ensure that information is up-to-date, and that customers are being billed for the correct amount and on schedule. While implementing correct billing processes might seem to be an obvious consideration, it easily is one of the most overlooked. One acquaintance of mine regularly mentions how their Web hosting company fails to bill them regularly or even on time. Being an honest consumer, he informed his hosting firm that they had neglected to bill him for three months of service.

While my associate adheres to "honesty as a best policy," we can rest assured that a wide majority of hosting consumers does not assume such an enlightened stance. With massive competition and churn in the marketplace, consumers are always searching for the best deal; and no price beats "free." With massive churn rates of 25 to 30 per cent still plaguing the industry, it is important that hosting companies squeeze every last drop of revenue out of a customer. Therefore, a customer must be billed on time, and billed regularly.

The second consideration for a hosting operation is measurement. Many firms do not realize how much income they are losing for services that they do not bill for. For example, most hosting firms do not invoice for ancillary bandwidth usage. While most firms are constantly concerned about the Web site bandwidth consumption of their customers, many do not consider the cost incurred by secondary bandwidth usage by applications such as mail and FTP servers. web hosting reviews