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IDEA #56 – Web Hosting Company using Amazon S3

I wonder if anyone has built a web hosting business off Amazon’s S3 storage/bandwidth services ($0.15/gig storage; $0.20/gig transfer).

GoDaddy is minimum $3.99/month for 5GB storage and 250GB transfer — which would equate to $50.75 at Amazon S3. But how many people use that much space or transfer? Typically sites use less than 500mb of storage and 5GB transfer (or less).

Thus, a 1GB storage and 5GB transfer plan would be $1.15/mo. You could even create a service where the person pays $5 setup fee (to you), which then runs some automated process you created to make all the technical stuff work — allow them to upload files via FTP, or a java applet via their web browser. Ease of nameserver (maybe you tell them where they have to point it to). Then have them auto-signup for Amazon S3, to pay them directly for whatever storage/transfer they do.

You could possibly have a plan that is $1/month (or $0.99, no gimmicks!). Although Google’s Blogger is free to setup a blog, Piczo allows you to create basically your own free website — basically like MySpace, except you can create lots of webpages. So maybe there’s no need for some cheapo web hosting company.

Be careful of customer support — that’s where the pain is; if people are having any web hosting problems, they’ll call you, whether or not it’s your problem. PHPWebhosting has always been good and cheap – $10/month, I don’t really think there’s any restrictions.

I wouldn’t go into this business, but hey, it’s an idea :)

  • http://sstrudeau.com Scott T.

    Yes, but Amazon is changing the S3 pricing model to add $.01 fee per request. Web sites have many, small, frequently requested files — and you’d be paying (X+1) * $.01 per page view where X is the number of images, css files, external javascript files, etc served up from the same server for that page. Ouch!

  • http://daryn.vox.com Daryn

    If you were trying to be a cutrate hosting provider, you’d probably make much better margins at volume doing it yourself than using AWS. That said, people like godaddy are often using web hosting as loss leaders, hoping to upsell hosting customers into their more lucrative products like ssl certificates.

  • Douglas

    Steve,

    Web hosts like GoDaddy, DreamHost, 1&1, and so on depend on overselling to pay their bills. The average web hosting customer will not use anywhere near 5 GB of storage or 250 GB of bandwidth – it’s very rare. Consider a DreamHost plan that offers something like 200 GB of space and 7 TB (yes, terabytes) of bandwidth for like $8 a month. Plus, you can find a discount to get $90 off for the first year. It’s ridiculous how much those companies oversell, but it makes for a very nice business.

    Every web hosting provider I know of (I’ve worked in and covered the industry for several years) does all of their storage in-house. Some use dedicated storage servers (I believe DreamHost does), but they very very rarely outsource it to a provider like Amazon.

    A majority of web hosts, especially those offering huge packages like GoDaddy or DreamHost depend on overselling. I would be willing to bet a very large sum that if every one of DreamHost’s customers started to use 99% of their allowed resources, that their entire datanceter would go down and they would go bankrupt quite quickly. :)

    Overselling is a great model – it just has to be done carefully and correctly to maintain quality.

    By the way, if you are interested in Amazon’s forays into the web hosting industry, grid hosting, and all of those things, get in touch with Isabel Wang. She’s quite interested in that area.

  • http://blog.blendah.com Blendah Tom

    Hi Steve,

    I think a company like http://www.elasticlive.com/ is already playing in this area..

  • http://www.fliso.com Michael St. Hilaire

    It’s a good idea. In a previous venture, we actually started working on this. We were going to build a flikr like site but for any type of file. Myspace addons for viewing/downloading files, desktop uploaders, etc.

    There’s a lot of competition in this market though, big barrier to entry there.

  • http://www.prospectmarkets.com ChandraB

    @Scott: You pointed out exactly what I wanted to
    say…you could potentially lose your shirt. If someone really wanted to be nasty, they could right a little program to do nothing but perform these file requests in a loop and there isn’t a damn thing you could do about it…could you even detect it to stop the process?

  • John

    @Scott- You’re incorrect: S3 pricing is $.01/10,000 requests, specifically:

    $0.01 per 1,000 PUT or LIST requests
    $0.01 per 10,000 GET and all other requests*
    * No charge for delete requests

    In addition to:

    $0.10 per GB – all data uploaded

    $0.18 per GB – first 10 TB / month data downloaded
    $0.16 per GB – next 40 TB / month data downloaded
    $0.13 per GB – data downloaded / month over 50 TB

  • http://www.nilkanth.com Ashutosh

    Its an interesting idea, which is already in the works. PAYG Web Hosting: http://www.nilkanth.com/archives/2007/08/02/payg-web-hosting/

  • netfirms coupon

    This is really a huge space for website and its FTP. This is plan may be helpful for any large database website. I really like this plan.

  • Shokre

    Not gonna happen :) S3 is just a storage part. You need EC2 + RDS for running dynamic applications and putting this stuff together for secure multiuser hosting is serious stuff (and when detailed would probably blow up the DISQUS plugin :))

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