[luckyisgood]

It depends whether every web dev / web agency should do this. If the agency grows big enough to hire an administrator (in-house or outsourced), and the agency is capable of adding value to the hosting service, then why not. Customers love to get everything at one place, but you really need to be able to resolve issues. For example, if the agency serves as a glorified email forwarding service between the hosting provider and the client, then there is really no value in this, the agency is only wasting clients' time, and the client would be better off dealing with the hosting provider directly.

In my experience, small agencies (up to 20 people) usually cannot afford or justify giving substantial resources to web hosting. My agency is now fairly small (five people), and web hosting is so complex and fast-growing, that we decided not to deal with it. We found a good partner a few years ago and we refer some of our clients to them. Some of our clients do pay hosting to us, but it's more of an application hosting type of service (they rent apps from us and pay annually). We have our own dedicated server on which we only allow websites we've developed ourselves. This is a legacy thing: we've been doing that before and we're still billing some of our past clients for app hosting, but stopped selling any new web hosting.

If I was starting an agency from scratch today, I would steer away from web hosting and let the specialized partner handle that for my clients. There are simply too many things that could go wrong if a small agency does not have the necessary expertise. One wrong step and you can lose a six-figure client over a $10 domain. And since there are too many things to keep up with in your core business (web development), your time is better spent learning about your core business, not about the web hosting business.

[BorisMelnik]

Hi lucky - I've been in the same industry for 4-5 years and have been offering hosting (as a reseller) for 1 year. We broke 100 hosting clients recently and are hoping to own our own infrastructure one day. We recently put an admin in house who is able to handle all support and day to day server admin of the servers we lease. The way I see it, all of our clients need hosting and I'd rather be the ones charging for it then someone else. I think one of the reasons we've had so much success with hosting is that our clientele are mainly very small biz clients, many of them on static HTML sites, Wordpress themes, or Magento carts which require very little ongoing maintenance.

I definitely am not trying to argue any of your points, but rather chime in with some of my experience.

[stef25]

if you have to spend substantial time & effort on it then obviously don't. The scenario I was talking about involved nothing more than logging in to cPanel to create a new site, making an FTP account, DB + user and that's about it. The beauty of it was that there was almost no work involved in hosting those relatively small LAMP sites.