Has anyone purchased another hosting company before or their clients? If so, how does one go about it? I might be looking to acquire another host in the future but I'm not too sure how to go about it. Any advice would be appreciated. 
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Hosting Acquisition
- Thread starter Volt.Networks
- Start date
It depends on the size of the sale and how well you trust/know the other party. The safest way I have found is to use an escrow service (I use the https://www.escrow.com/index.asp). This method is the most expensive but if the transaction is big then it is well worth the price for the peace of mind.
Another way for smaller transactions is to simply use paypal and pay through your credit card. This way if something goes wrong you can do a chargeback with your CC as well as paypal.
Other methods include, wire transfer, money order, and etc but all of these methods have more risk and should the buyer run, there is very little you can do.
Another way for smaller transactions is to simply use paypal and pay through your credit card. This way if something goes wrong you can do a chargeback with your CC as well as paypal.
Other methods include, wire transfer, money order, and etc but all of these methods have more risk and should the buyer run, there is very little you can do.
Thanks Tang, I figured using Escrow would be the safest way about going about that. Have you ever gone through something like this before?
What about the clients? How do you start to collect payments from them? What other actions should be taken with them?
What about the clients? How do you start to collect payments from them? What other actions should be taken with them?
Yup, I`ve done it 2 times I think. And once I used paypal and the other time I used an escrow service.
The clients were notified of the take over by the host that I was buying out a week before the transaction was completed. And the way I always did it was to keep the server that the host had online for 15 week after the buy out. I found that this gave us enough time to get in contact with the clients and move their accounts to our servers with min. downtime and confusion. Once the transaction was completed, we then emailed all the clients and informed them of the completion and the course of action that was to follow. Which was usually to migrate them over to our servers individually and each account that was moved over would be notified after the move was completed.
As to payment, we added each client into our billing software and issued an invoice. In one case we decided to pro-rate all the new accounts so that all new accounts had the same billing date. This made things a bit easier on us but some clients were confused with why they were being billing again before their usual due date.
The clients were notified of the take over by the host that I was buying out a week before the transaction was completed. And the way I always did it was to keep the server that the host had online for 15 week after the buy out. I found that this gave us enough time to get in contact with the clients and move their accounts to our servers with min. downtime and confusion. Once the transaction was completed, we then emailed all the clients and informed them of the completion and the course of action that was to follow. Which was usually to migrate them over to our servers individually and each account that was moved over would be notified after the move was completed.
As to payment, we added each client into our billing software and issued an invoice. In one case we decided to pro-rate all the new accounts so that all new accounts had the same billing date. This made things a bit easier on us but some clients were confused with why they were being billing again before their usual due date.
tlchosting
Active Member
Has anyone purchased another hosting company before or their clients? If so, how does one go about it? I might be looking to acquire another host in the future but I'm not too sure how to go about it. Any advice would be appreciated.
Have a look on dnssnoop they are good for buying and selling domains, internet companys and more.
Use them to find out estimated price of a site.
http://www.dnscoop.com/
A hosting company's worth lies in it's resource setup and client database.
~ServerPoint~
New Member
That is not a picnic to move all stuff from the company you have purchased to your datacenter. Many issues must be taken care of, starting from DNS related ones with minimum delays for the customers
Thanks for your answers Tang. That helped quite a bit. I still have a few more questions on my mind though, if you don't mind me asking:
Say you acquire some clients, paying say $5 per month for 500 mb of space. Do you continue to bill them for that same amount, or do you offer them one of your plans, such as your $1 per month plan for 2.5 gb? Seeing as how your current plans are better than their current plan, do you switch them over or do most clients just keep everything the same?
Also, typically what percentage of clients do you expect may leave because of the hosting acquisition?
Say you acquire some clients, paying say $5 per month for 500 mb of space. Do you continue to bill them for that same amount, or do you offer them one of your plans, such as your $1 per month plan for 2.5 gb? Seeing as how your current plans are better than their current plan, do you switch them over or do most clients just keep everything the same?
Also, typically what percentage of clients do you expect may leave because of the hosting acquisition?
Clients get very edgy when they know they have been "sold". There have been way too many horror stories of takeovers gone wrong where clients are left with the receiving company's screwups. Make sure there is no room for error, that both you and the seller know exactly what you are doing before you sign on the dotted line.
The seller should notify the clients (preferably before the sale) to give them a chance to decide what to do before it is too late. The new buyer should contact the clients as soon as the move is complete and leave the lines of communication open for any questions they may have.
No problem, glad to have helped
.And to answer your question, what we do with the plans depends on the kind of purchase that we had just made. If we had purchased an entire business, including the website, billing system, and clients then we wouldn't turn the clients to our plans immediately. This kind of a purchase is longer in process and we usually slowly migrate the host that we bought slowly into our own.
In the case of just buying pure clients we offer them our plans regardless of if their old host has plans that were better or worse than our own. This is to keep in line with our business model and method of pricing and etc.
As for the turn over, it is a very delicate issue but from personally experience I haven't lost that many clients due to the change. As stated before we keep the old server up and running for an extended period of time and do our very best to eliminate downtime or confusion. Another method that we have used is to offer a free month or a discount for the clients that came over in the purchase to allow them a chance to test our services and decide if they wish to stay or move on. But like I said, we have not lost a lot of clients in the moves. I can only remember 4 account cancellations that arose from a purchase of another host.
How did you confirm that the seller did indeed own the company and clients? Also, how did you verify their income? Did you take it based on good faith and used Escrow as a precaution or did you ask for some kind of evidence?
I hadn't thought of that. That's a pretty good idea.
T^2 said:
I hadn't thought of that. That's a pretty good idea.
FusionHosts
b&
One way to see if to look at their billing panel to see clients and income coming in. Also, taking a screenshot (months income) might help along side the billing panel proof.
just my 2 cents.
just my 2 cents.
For billing if they use paypal or something similar you can keep there billing system or migrate it to yours (eassier if you use the same) Say they sent invoices from billing@blahblah host you can add that email to your paypal account so if someone sends it to you by mistake you still get the money.
