Renting vs owning web hosting

In the last post, I talked a little bit about the concept of renting vs. ownership when it comes to your company’s online marketing efforts, Can we apply this logic to other areas of digital business? What are some other services being rented that might be looked at as assets instead?

Website hosting comes up as one of the recurring costs that is “rented out” instead of purchased, but this one might make more sense as a rental.

What is web hosting?

A website is basically a collection of files that can be interpreted by a web browser. HTML, PHP, and ASPX files (among others) define things like a web page’s layout, as well as what content is on the page. Pictures, video, and audio are stored as separate files that are referenced by those web pages.

The web host, or server, is the physical computer that a) stores those files and b) provides them for the user when requested. In concept, it’s pretty simple, but the devil’s in the details.

Beyond simply delivering files, web servers require a variety of drivers and services to support modern web technology. Linux based servers typically run a suite of Apache (the web server) Mysql (the database server) and PHP (a scripting and logic program that can also build websites). The “full stack” of programs and services can vary from application to application, and being able to interact with each component of the system requires multiple specializations.

Costs of self hosting a website

The first cost of hosting your own website is computer hardware – a rapidly depreciating asset. And unless you’re in an industry that specifically requires large purchases of high performance computer hardware, it’s unlikely that you’ll get the same bulk deals that the web hosts are getting.

You’ll also need to hire at least one server developer/administrator. Not only do they tend to be well paid professionals, you may also struggle to even find one who is both available and specialized in each of the specific aspects of the stack you are working on. Oh, and you’ll need them on-call 24/7/365 because downtime will be even more expensive.

You’re also going to need a powerful connection to the internet. Specifically, one that has a very large upstream capacity. Guess what? You’ll still have to rent that, as well as access to the ISP’s networks.

So to avoid that small monthly hosting rental bill, here’s what we’re paying for instead:

  • New high performance computers
  • Server development
  • Server administration
  • Backbone internet access
  • Emergency maintenance

Sometimes it makes sense to rent

And web hosting is probably one of the best examples of that, when it comes to online business. Most local companies will probably be happy with using a light VPS in the $10-$20 monthly cost range. You’ll probably still need someone to administer the server, but the process is still a lot simpler on a VPS than it is on your own local hosting machine.

In a less competitive niche, you might even be able to get away with shared hosting plans that cost $5 a month. Those shared web hosts won’t have the speed of a VPS, but they’re extremely simplified and don’t require a whole lot of technical knowledge to operate.

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