Unlike other broad used web hosting terms like "Shared Hosting", "VPS Hosting", "Dedicated Hosting", "Managed Hosting" or even "Budget" and "E-Commerce" hosting, the term "Reseller" lacks technical specification or specific set up that would distinguish it as a hosting type. But at the same time "Reseller Hosting" is a multi-million dollar industry.
Why? The reason is simple. A relatively small change in any web hosting automation software allows individuals who cannot afford to invest in their own web hosting infrastructure or do not have skills in managing web servers to establish their own web hosting brand. Shared, VPS, Dedicated or any kind of web hosting service can be resold. All the Reseller newbie needs is the ambition and skills to market itself on the web.
Is Overselling Killing Reseller Hosting?
The Reseller Hosting inherently tied to Shared Hosting. Most of those who operate reseller hosting brands sell low cost shared hosting services. Their business is on the verge of vanishing into a niche as part of the evolution of the web hosting industry.
Since 2006 the hosting market has grown substantially and thousands of new web hosting providers have emerged. The prices of Dedicated and Managed hosting have gone down. Today anyone can get a low-end rack-mountable server for less than $70/month and to run their own boutique web hosting company.
Virtualization and the rapid development of various VPS Hosting technologies made the reseller hosting accounts look outdated. However the thing that's killing "Reseller Hosting" is the overselling trend in Shared Hosting market. When web hosts began offering "Unlimited disk space" and "Unlimited data transfer" for $7 per month or even for less it has become unnecessary to buy a reseller plan.
It is impossible to compete with Shared Hosting providers who sell "Unlimited web hosting" when you have a limited amount of resources in your pocket. If anyone buys a Reseller Hosting plan which features 50 GB disk space on the server and 250 GB data transfer per month, they can create 10 shared hosting accounts, each of them featuring 5 GB disk space and 25 GB data transfer per month. So the reseller might try to sell these 10 accounts but it will be very hard for them to compete with their own web hosting provider because they can't make the same "Unlimited" offer.
Reseller hosting is born again.
A small, but very significant change in the concept of producing and delivering computer resources saved the reseller hosting niche. It's name is Cloud computing. The new networking model of producing and delivering computer services form a highly available and scalable computing infrastructure brings Reseller Hosting to another level. Resellers are born again!
The "Cloud" is an excellent chance for anyone involved in Reseller Hosting to abandon the traditional way of selling web hosting services and to become part of the new Cloud hosting industry. And those who decide to move forward can stay in the Reseller market and even grow as a business. Those who decide to keep going in the same direction by selling services the old way might see that their business will be gone.
