Lets Start a VPS/VDS WAMP Hosting Service

Posted: 2007-01-28 10:25:00

I’ve got an idea, lets start a VPS/VDS WAMP [Windows,Apache,MySQL,PHP] Hosting Service, using Windows Server 2003 as the guest OS.

First, we will need a dual CPU setup with the Intel-VT or AMD-V architecture extensions, lots of RAM, and SCSI drives under RAID. As you really do need a dual cpu setup to run these solutions.

The top two choices for a Virtualization Solution (aside from VMware) that supports Windows as a guest OS are…

Lets note that the above products can only handle 2-3 times less the number of Windows-based instances [just a guess on my part].

Lets look into the licensing costs/issues of a setup like this…

Virtual Machine Technology FAQ

Each copy of Microsoft Windows Server, whether used as the OS for a virtual machine (“guest OS”) or as the OS for the server (“host OS”), must be separately licensed. For example, if a user is running Windows Server 2003 Enterprise Edition as a host OS on a server and creates two virtual machines, each with its own copy of Windows 2000 Server (each a guest OS), the user would require one Windows Server 2003 Enterprise Edition license and two Windows 2000 Server licenses.

Licensing does not depend on which virtualization technology is used. With a license for Windows Server 2003 R2, Enterprise Edition, you can run one instance of the software in a physical operating system environment and up to four instances in virtual operating system environments.

The MSRP on Windows Server 2003 R2 is $999 for the Standard Edition, and $3999 for the Enterprise Edition. So for 1 host and 40 max win32 guests, that would cost us $25,000 (~60% of retail). There is one problem with this… Microsoft can’t make up its mind on whether the License ties into the device or the end-user, and who exactly the licensee is. In this VH context, this might break a few clauses.

Luckily, Microsoft does have the Service Provider License Agreement (SPLA) which would allow us to lease the OS on a month to month basis for hosting. Its pay as you go, so if we only have 1 customer, we are paying for 1 license and for 1 month. While I cannot locate a pricing list, it is my understanding that the cost is usually at 3% of the perpetual price (retail, or average?).

Lets add another $5000 for the cost of renting the server and another $5000 that Virtuozzo will extort in licensing fees (for 40 users) [both for one year].

At this point, assuming 12 months and 40 accounts, we are in for $25,000. To break even, we would have to charge $50 per month. Which is still about $20 more than what you could charge for a Linux VPS. And at those prices we would be working for free. For one person to do this, and make a living, well, you would need lots of paying customers and farm of servers. Hosting is a cutthroat business.

More info on the subject…

There are also other noteworthy solutions like VMware (full virtualization) and Virtual Iron (based on Xen, except with Native Virtualization).

VMware has some really great things going for it, like ease of use, and their appliance initiative.

Spry seems to offer a dedicated server with Virtuozzo already setup, with 100 VE/VPS licenses — Linux as host/guest OS.