In recent years, the cost of webhosting has been dropping rather quickly due to the ease of market entry. The availability of OTS(off-the-shelf) webhosting control panel that simplifies the tasks of creating webhosting accounts on the popular Linux servers, has allowed any dedicated server owner to become a potential webhosting provider quickly.

It is amusing when I read about a new (one-man-operated) webhosting provider asking another, "hey, how do you guys support your customer 365/24/7? I need to sleep and take care of my day job." Yes, we know that.

We cannot blame these one-man-operated "webhosting company" because the procedure looks quite simple (but it isn't):

a) Order one dedicated server with a controlled panel(most popular being cPanel, Plesk or Ensim) from one of the dedicated server providers.

b) Familiarise with the control panel (see their documentation).

c) Get a professional web design or create your own one with a logo.

d) Get a webhosting shopping cart from Hotscripts.com (say WHMautopilot or Modernbill, and familiarise with it.

e) Integrate them together and test it out with your favourite payment service(s).

f) Setup a KB (knowledgebase or FAQ) and/or a support email/forum.

and TADA, you have just started a webhosting company!

The effort to setup such a company may be quite hectic for a complete newbie, and cost between US$500 to US$1,000 depending on the quality of softwares used and servers. Anyway, it is a good job if you have done it. But wait, most one-man-operated "webhosting company" soon found that there are some problems which they never thought of:

a) You need to know how to manage a dedicated server, esp. one that is unmanaged. For a linux server, at the very least you should know how to even ssh into the Linux CLI and type "ls -la", "pwd", or "ps -axf". Don't use "rm -fr *" if you don't know what I am talking about.

b) You get what you paid for. If you ordered your money-making machine from one of those cheap dedicated server provider with non-existent management services, God Bless You (and your poor customers).

c) You need to know a few other things: OS patches, software updates, security patches, control of server resource, any external security or ddos mitigation features, DNS setup, etc.

d) You may need to constantly change your Packages because everyone
is offering multiple or unlimited domains and bandwidth with 10 or 20GB HDD. Some companies even increase the specs every week, all for the price of shared hosting at less than US$ 8 (spell "Eight").

This is just my opinion. I wouldn't call those one-man webhosting companies a scam, but would say that the webhosting market is over-saturated with many small home-based businesses offering services which the owners thought they are competent to deal with. I am getting crazy when I see new company names in some of the hosting forums. And I am quite sad when some of those, once reliable good webhosting companies forced to degrade their services.

The existing established webhosting companies should consolidate and focus on education, value-added service and customer support. Value-added services does not imply "Fantastico", "One-Click" Installs, etc. We are referring to the ease and reliability of upgrading an existing site from a shared hosting, to VPS hosting, to managed dedicated servers, and finally to a small cluster managed by a load balancer. Users should be educated on what to expect for a shared hosting, and be able to upgrade to VPS hosting or dedicated hosting without switching host.

We know that most websites do not have sufficient traffic for the upgrade. However, most website owners do expect their website to grow. The problem is that most webhosting company are only interested in making the upfront cash rather than being directly involved in supporting the growth of their customer's business.

Well, we also have to face the fact that the underlying problem is also caused by the mass consumers - everyone on the internet wants to get things free or cheap, and with the least effort. This is the root cause of all the complaints in the forums about being scammed, or getting poor services.

In life, you get what you pay for. This is what you can offer to others, and what others can offer to you.

btw I don't offer webhosting :)