It’s been a long time since I’ve been a direct decision maker regarding hosting but for 20 years running an agency, I’ve boiled hosting choices down to three distinct scenarios (of course there are outliers). The three options that typically exist also very much define the type of agency you are. Agencies and their hosts fall into, self hosting, client hosting, and partnerships.
Self hosting agencies are exactly what they sound like. These agencies have typically gone through the trouble of building a level of hosting via purchased or leased hardware as well as renting space with a reliable infrastructure partner like Steadfast.net. Self hosting agencies typically have a level of expertise with the ins and outs of setting up and configuring everything from the operating system to the web server (Nginx or Apache), the application environment (PHP, node.js, etc.), and the database (MySQL, MariaDB, etc.). Additionally, support and maintenance of such infrastructure is an ongoing concern and expense. These agencies are typically much larger to support the heavy costs with such expertise and even though hosting may be a profit center, it generally is only marginally significant in regards to overall profit.
Our second group of agencies is the client hosting option. These agencies have clients that span from SMBs (small and medium business) to SMEs (small and medium enterprises) to full enterprise. They may be part of affiliate programs with hosts like GoDaddy, Bluehost, or InMotion Hosting. They recommend and refer for smaller clients, or for larger customers the decision is already set by the client. There may be some marginal revenue gained but more importantly, the relationships with such host providers are much more hands-off.
Lastly, the hosting partnership agency has found a way to augment overall hosting value with a dedicated strategy to engage with the host and customer. Great examples of partnership driven hosts include Convesio and WP Engine. These kinds of partnership hosts have built similar models to engage with agencies at different price points and service levels to provide a comprehensive solution which not only increases profit to the agency relative to self- and client hosting focused agencies, but also provide marketing and customer exposure. Agencies following this model can significantly add value to their overall solutions and increase customer retention.
There is no right or wrong model for your agency, a lot depends on in-house expertise and client base, however as a believer in partnerships there is a lot to be gained by working with a host that is aligned tightly with your needs.
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