For the past 6 years I been working in the Web-Hosting industry.
During that time I created 3 companies, WizardsHosting, DataColo and Relio, the latter is simply a re-branding of the first. And while WizardsHosting and Relio worked great as a Shared Hosting outfit, DataColo was a disaster.
At the time I put DataColo up (end of 2000 / beginning of 2001), we offered dedicated servers and co-locations, and at that time, we could package a server with 50GB of bandwidth for $500 a month, or sell 1Mbs of traffic for $500-$700, the profit margins were great, and we made good money.
But then a shift on the market, sometime in 2001, RackShack (EV1) came along and started to offer servers for $99 per month with a staggering (back then) 100GB of transfer, clients flocked in, and outfits like ours started to feel the pain……
Unfortunately at the end of 2002, I was still trying to sell into this market, as a fool thinking I could compete with the likes of EV1 without Venture Capital, so I went ahead and built a mini-noc of my own which was completed at the beginning of 2003
The NOC & Offices were small, just about 1000 SQ FT., but it was mine .. I did save some money by outsourcing the power from another datacenter in the building (basically they provided me with power that was backed up by UPS and Diesel Generator in case of failure, saving me money and space), the space itself belonged to Neutelligent (later Hostway) and it was simply unused space, which we pay them to convert to our needs.
Pictures of the racks in the NOC
After burying some serious cash into this mini-venture, I was confident the future for DataColo was rosy, after all we had about 100 servers, making a (small) profit and space to grow 6-5 times over.
But as always, your plans are not always in Sync with other people’s plans .. my two largest clients (eBizHosting & Wayne) sold out to others, the new owners of the first one simply moved all servers and service to their own DC, while the second one’s new owners simply ran the company to the ground in 3 months.
At this time bandwidth is also becoming extremely cheap, thanks to the expansion of crap providers like Cogent, so we have to lower our COLO prices as well.
By the end of 2003 I am beat, and I am tired of the whole business of dedicated servers and colo, to add to the problems, I went so hard into DataColo that I started to shed away WizardsHosting, a year earlier I had stopped all new signs into it, and didn’t replenish the churn.
So I decided to go back home (Portugal) and get my bearings back in line, we left to the Azores (PT) in October 2003.
After a few months back home, I decided what to do, the DC had to go, and so, only after little over 1 year, I moved into rackspace at the Hostway datacenter (in the same building) and dissolved the NOC, my hope was that this would save me enough money that would warrant keeping DataColo alive (against the warning of my family), I also re-launched the Shared Hosting offering by opening Relio, and merging the WizardsHosting clients into it, I didn’t know yet, but it was to prove to be my best move, going back to basics into a business model I should have never left.
And so it was for over 18 months .. I moved the family to the UK, focused on growing Relio while keeping DataColo profitable … until of course, Relio started to make 50% more money than DataColo, using ONLY 9 servers and 10% of the resources.
But my biggest problem was the resources DataColo was consuming, mostly my own time, colo and d-server clients can be demanding, and I seemed to have some of the more demanding ones in the business, some refused to deal with any of the help staff I hired, and only wanted to deal with me, leaving me with no free time, no weekends, and no life, at the same time my commitment to another company I held a % of (PSoft) was also increasing, and more yet, we were discussing a merge with Comodo, which might mean more work for me, so I knew needed to let something go.
So the next step of the plan was laid out … DataColo was a dream that was flawed .. and never to be, and it was time to let it go.
I contacted Hostway and offered it to them, we agreed on a price, they took the clients, the servers, the switches, the works, I took Relio and moved it to a Texas Datacenter of a good friend of mine.
The sign-over of DataColo and move of Relio (which was very smooth) happened at the end of last month, and today I see the Domain (DataColo.com) is now transfered over to them, so I am free of it.
So now I am in the same spot I was at the end of 2000 … running a profitable WebHosting company part time, outsourcing things like servers, security audits, monitoring and some support, while keeping busy with Marketing and Management only (it’s all I could take in also, since I have other obligations to Comodo), I have my free time back and my weekends .. and I can sleep at night.
Yes, it was nice to open the office door and look to the left, see my office, look to the right and see this huge glass window with racks and server lights blinking behind it, and to the front, my reception and techs area … it was nice, but it was not viable.