Projecting hosting costs for business plan.

#1

Post by phpdev » Sun, Jun 22, 2008, 4:00 PM UTC

Hi. I'm writing a business plan for my web app. I need to project my hosting costs for 6/12/18/24 months into the future for my financial projections etc.. Is there a way to predict the costs? EG: For every 250,000 hits per month you would roughly need 1 server? Being projections, it doesn't need to be 100% accurate! Just a ball park/rule of thumb figure for the plan! Thanks.

Re: Projecting hosting costs for business plan.

#2

Post by babul » Sun, Jun 22, 2008, 4:37 PM UTC

Most decent hosting providers give detailed breakdowns of their service costs (servers/cpu-slices/bandwith/transfer-rates/limits/etc) so if you are able to approximate your usage levels e.g. by comparison to the patterns of other established similar apps/companies, you can do a good job in calculating these costs.

Even not knowing your usage levels, you can make reasonable assumptions and hence choose appropriate services with fixed costs and work on that basis.

Amazon Web Services, SliceHost, and the like are particularly good if you do not know how your service/app will perform over time as they allow you to scale with ease compared to other more traditional hosting solutions and although more expensive in the long term (i.e. buying dedicated servers are cheaper), is cheaper in the short term and actually makes creating early projections much easier.

Re: Projecting hosting costs for business plan.

#3

Post by babul » Sun, Jun 22, 2008, 4:40 PM UTC

babul wrote: post #2

Most decent hosting providers give detailed breakdowns of their service costs (servers/cpu-slices/bandwith/transfer-rates/limits/etc) so if you are able to approximate your usage levels e.g. by comparison to the patterns of other established similar apps/companies, you can do a good job in calculating these costs. Even not knowing your usage levels, you can make reasonable assumptions and hence choose appropriate ser…

It also removes many of the initial fixed costs such as dedicated servers, and will actually bring your projections down to lower levels making, in many cases, the proposition more attractive to investors (if that is what you are looking for).

Re: Projecting hosting costs for business plan.

#4

Post by olefoo » Sun, Jun 22, 2008, 6:35 PM UTC

If you can profile your application do so, data trumps estimates every time.

For a web based app your scarce resources are memory, bandwidth and database connections, disk space isn't usually an issue at first.

One factor to keep in mind is that as you add features to your app, your usage profile will change, mostly by growing heavier.