It seems there are thousands of web hosting companies out there and the market seems saturated. Do you think it's a good idea to start one? I am not talking about becoming an affiliate of another hosting company. Starting a new one which offers more services for lower price (even though there are free hosting and less than $3 hosting).
Starting one seems very easy with very low cost with a single server. To me, if it doesn't work out, I am no losing much. I still keep the computer and use it as a second computer.
There's also competition from providers like WordPress which offer free hosting but you can't do as much with a tool created mainly for blogging.
Addition: Web hosting is a side business. I still have a day job. Web hosting is easy to set up and it's a recurring fee service.
No way. It is a run the mill business - unless you either get customers cheap (existing customer base) OR invest a LOT (with a small profit margin) it simply is not something with hugh profit potential in most cases.
OR: you find your niche. Cloud hosting seems to be the current thing.
You cannot compete with places like GoDaddy and Host Gator for hosting on price. It's just not realistic.
You would need to find a market niche like:
Hosting really isn't just turn a computer on setup some FTP accounts and let it rip. You have at a minimum to worry about:
I wouldn't even consider hosting from a residential location. Buy a dedicated or co-locate a server at a local facility. Some place like LiquidWeb.com or RackSpace.com
Then you have to think about:
But if you want to host some friends and family on a machine in your basement go for it! That is no big deal but it would be irresponsible for you to sell it as business grade.
Best bet is to carve out a niche and specialize in hosting a specific programming platform, or open source project. Like Redmine hosting, or knowledge tree hosting, or name 1 of a million popular open source products out there. At this point in the game you need a niche.
If your going to be running the server from your own house, consider your hosting business doomed before it has even started. You are honestly better off leasing a server and some server rack space that is properly cooled in a secure and backed up environment.
You as a hosting provider will have a few responsibilities such as reliability, performance, speed and versatility. another caveat is that if you are running a server from your own home, even with a dedicated internet connection, you're most likely not going to be able to provide a decent connection speed to run the server, not to mention costs associated with electricity, cooling and bandwidth.
Try this site: http://www.leaseweb.com/en - leasing a web server is probably your best bet and it'll allow you to upgrade much easier and expand out if you get big. The market is oversaturated without a doubt though.
"Starting a new one which offers more services for lower price."
Show me evidence people are changing hosts for more services. Clearly 99.5% of those services are solved by 99.5% of hosts already - the very reason there's a price war.
"Starting one seems very easy with very low cost with a single server."
Right...so why do it...anyone can. Washing cars would be a better business. Really.