If you own a hosting business then you are likely familiar with the potential that comes from upselling accounts. The most common way that providers upsell customers? By offering larger and more robust infrastructure options. Dedicated servers, specifically, offer huge growth opportunity for companies and their clients alike. Such a server gives users the technological horsepower needed to run even the most ambitious sites, applications, and projects. Similarly, these higher-end offerings can be a huge profit center for the company as well. More reliable in nature, those solutions command a higher price point and result in increased customer satisfaction.
In fact, while many providers begin by selling simple shared accounts, most have the ambition to offer bigger - and more expensive - services to customers over time. However, if selling dedicated servers was so easy then everyone would do it, right? The truth is that expanding your hosting offerings with solutions more complex in scale is fraught with challenges and roadblocks that can frustrate even the most experienced technologist.
In this Blog post, we will cover seven main struggles that you may be forced to deal with if you own a hosting company and start providing different, high-priced offerings to your customers.
1. Reading customer needs
Dedicated servers are often more trustworthy and offer better performance than shared hosting plans since they have access to more resources. Furthermore, those resources are not shared with other tenants. Even if they sit idle when not in use, resources from this type of a server are specific to the customer, and not impacted by other users or companies.
The difficulty behind selling dedicated servers may lie in figuring out what customers want with regard to server specifications, which can depend on the company's target market. Some users want higher quality at a lower price, while others need devices for high-traffic websites that experience spikes in demand throughout the day.
2. Taking inventory
One of the main challenges in offering dedicated servers comes in how to keep up with them as they grow more and more in demand. There are typically two ways to maintain the inventory: by hand or with some type of an automated system or software. The manual method includes counting from an account dashboard. For some businesses, the manual calculation comes from literally walking into the data center and adding up devices on the rack. With an automated system, the number crunching is handled regularly by software, reducing the manual work and improving the accuracy of calculations.
For example, EasyDCIM automates inventory counts for connected servers, showing what devices are in use and which are idle, and thus available for provisioning. This allows owners and administrators of hosting providers to save vast amounts of time. Additionally, the platform makes the inventory calculations more precise and stored in a streamlined system instead of being kept in a random spreadsheet or notebook.
3. Server restarts
Another challenge comes in how you choose to handle device restarting processes. The common ways of addressing this need are either performing restarts internally or allowing customers the freedom to handle this task individually for servers they purchased from your company. In case you choose to shut down and turn on the servers all by yourself, then it becomes an integral part of your professional workflows, costing time and resources. Then again, if you choose to give users the ability to restart servers they are using, it ends up being a shared responsibility.
In general, it is not possible to equip clients with the power to perform server restarts without the right software. Hosting providers that utilize EasyDCIM can easily offer this sort of functionality to their customers, and all that without sacrificing control over the provisioned devices.
4. Server hardware investments and expenditures
Dedicated servers are a sizeable investment for most hosting companies mainly because there are ongoing costs associated with upkeep and maintenance. The challenge is knowing when or how often server hardware needs to be upgraded or replaced.
In many cases, reseller programs can be a great option for hosting providers looking to grow. By leveraging a reseller program held by a larger provider, a company can branch out into offering a wide range of dedicated devices without taking on the burden of buying or leasing any hardware. When adding in the costs of data centers, connectivity, electricity, and security, it rarely makes sense for a small or even mid-sized entrepreneur to purchase hardware for sale.
5. Migrating customers between hosting server types
Migrations are complicated in almost every situation, and the migrations from a shared hosting account or VPS to a dedicated server are no exception. If you are going to offer more powerful infrastructure, you should first consider how customers will be transferred to these new offerings. Will you have a separate team for professional services to lend a hand? Automated software to handle the process? Or, like many providers, will you leave the migration to the users and their team, and not provide any help at all?
Ensuring migrations go smoothly is a go-to way to sell more units and keep customers happy. At the same time, you should take into account that providing technical assistance can prove to be a costly burden to your company’s support and engineering teams.
6. Pricing strategy
Settling on the price of any infrastructure service can be complicated. Some hosting providers choose their pricing rates based on the rest of their products and solutions catalog. Others price their offerings relatively to competitors or according to customer surveys. Because dedicated servers are inherently higher-performing, more reliable devices then they are typically priced higher than VPS and shared alternatives. Outside of that guidance, however, you’ll likely need to try different price levels to see what your market and your clientele will bear.
7. Marketing dedicated servers
Lastly, many providers may face various challenges when it comes to marketing and selling dedicated servers. The goal is to advertise these devices as a premium product because they are more robust and powerful than shared web hosting or VPS plans.
The best way to market your new, higher-priced offerings is to position them as the next stage in the natural growth path for customers as their businesses evolve. This is an effective technique to let your clients feel you are a partner in their success and not simply trying to sell them something more expensive. Dedicated servers provide high performance and uptime - users that need both will recognize the value in your new offering when the time comes for that to fit their needs.
Should you make dedicated servers part of your business?
As you can see, there are quite many challenges hidden in the craft of selling dedicated servers. However, what should be stressed above all is the fact that each of these possible struggles is far outweighed by the positive impact that branching out has on your business. Improved customer satisfaction and higher-value sales can be transformative for your hosting business.
Our team at EasyDCIM is on a mission to help hosting providers and their customers get the most possible value from dedicated servers. The platform's suite of extensions as well as integrations with key systems like WHMCS turn the server management into something to look forward to. If you are keen to learn more about adding dedicated devices to your product base, simply click the button below. We would enjoy the chance to help you explore how adding better solutions and more valuable revenue streams can impact your hosting business.
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