Some friends and I are in the process of starting a company which hosts game servers, but we've run into a bit of a problem: we can't figure out how to host it. The highest-tier plans for VPSes we've found include typically 30 terabytes of monthly bandwidth, and a 1TB hard drive. However, this would only support about 10 servers, which would allow for little to no profit margin. We briefly considered building our own servers, as they would pay for themselves as opposed to the plan within a few months, but we again ran into the issue of bandwidth, or rather network speed, which would allow for even fewer than 10 servers. We've run out of ideas at this point, and so we were hoping those more experienced than us would have some.
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Look at AWS they're a cloud provider – Drew Khoury Nov 24 '13 at 11:13
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1It seems as if you're putting the cart before the horse here. While it's always good to consider what it will take to scale things, you are only just starting out, you have no idea what success (or not) you'll have, and you are (no offense) having problems sorting out even the most basic infrastructure decisions, let alone what it'll take to operate at scale. So - my advice to you would be to start small - one or two servers. Figure out how to organize things in a stable, reliable, reproducible fashion, and then build from there. – EEAA Nov 24 '13 at 20:01
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Speaking from experience, hosting game servers is very difficult. There are several major providers who offer services for prices that are difficult/impossible for a startup to compete with unless you are willing to take a loss, and a significant number of your customers end up being flakes who you will struggle to collect from. I'm going to agree with EEAA on this and say you're getting ahead of yourself. I mean this in the nicest way possible, but if you're not even aware of how to provide bandwidth for the rentals, you need to spend more time researching this before attempting it. – jlehtinen Nov 25 '13 at 04:21
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Unless I'm getting the numbers wrong somewhere, 30 TB/month is the equivalent of just a shade under 100 Mbit/s *sustained* throughput for the entire month. How much bandwidth *do* you estimate needing, peak and average? Storage capacity, even at high throughput and IOPS, is the easy part; it's an initial cost that can be estimated, but beyond that, the running cost for storage is fairly low. (You want to make sure to budget to replace the hardware in a reasonable amount of time, but it's almost certainly the initial outlay of cash that hurts the most.) – user Nov 25 '13 at 09:41
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The **technical** aspects of physical vs. virtual are also discussed in [this question](http://serverfault.com/questions/446649/what-is-the-purpose-of-a-physical-standalone-server) . – MadHatter Nov 25 '13 at 09:42
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Well, it all runs down to business and administration decisions. But also consider damage risk. A VPS going down is "load backups into new VPS that your provider provides". A server failing (hardware) means pulling the machine, waiting for spare parts etc. - a LOT more downtime. No profit margin is generally normal for people going for small hobby scale deployments for things that require no real investment.
Generally, every business without entry barrier will have a near zero profit factor - the more if you talk economy of scale business things and you don't have scale. But any business decision is outside the scope of a pure admin side.
