Here's some thoughts (based on experience) on hosting companies, data centers, and so forth..
Like any business, the best growth is organic. That means starting with one customer, and when you get a second customer, expanding your business to accommodate them (or right before they join).
Putting together a "6-months from now, I'll probably be at.." business without the 6-month interim is how most businesses end up going under.
Now, as many have mentioned, hosting doesn't *require* maintaining your own data center. In fact, on a cost competitive basis, you are better off reselling existing hosting, or offering hosting from an existing data center. Low initial investment, and you build up a reliable customer base - which can move with you to a permanent facility that you maintain.
Assuming you can compete on features, price, and service against the *thousands* (not an exaggeration!) of hosting companies, you can then look at starting a data center.
Data centers are tough. You have three major concerns - Bandwidth, Power, and Heat.
Bandwidth is relatively simple (but expensive). You request a line from a provider, and you have to sign a 5+ year contract (generally). The contract gets you a nice pipe run to your location from their closest hop, and (usually) a CSU/DSU. You may have to pay for the 'last mile charge' to run the pipe to your location. Be prepared - the contract can be $15k plus over the lifetime, and the last mile charge could be as high as several thousand dollars.
Many of those costs are negotiable, depending on the carrier/location/moon phase.
Once you have bandwidth, now you need power. You can get as high as 200-300 watts per square foot in usage, and most simple commercial (read: Not warehouse) spaces cannot manage that load for a decent sized space. You also need the power to be 'clean', which means adding in load levelers, trip faults, and the like. Expensive again - easily in the $10-30k range.
Finally you need to get rid of that heat. Generally, the rule of thumb is "one ton per tile", and that can also end up being extremely expensive. For a measure you can relate to, a data center the size of one floor of a 3-bedroom house generally needs approximately a 6-7 ton cooling system (running constantly). Thats gonna require yet more energy.
And these ignore backups (power, cooling, data), security (physical, information, network), and design (raised flooring, humidity control, flooding, attack proofing). We should mention service in there too, as you'll need a rack monkey roughly 24x7 to compete with ANY of the established companies - thats full time pay, plus benefits.
Its a daunting, expensive, challenging, frustrating process. Worse, there are thousands of competitors at each stage:
1. Resell hosting (the main sellers can sell it for less, and offer better service)
2. Sell hosting (the main sellers can offer more features, better service, AND better uptime)
3. Small data center (the main sellers have more redundancy in their networks, better rack technology, and have solved the major problems - for less than you can)
Hockey wrote:My local service providers are the local phone company (DSL) and Shaw cable (national carrier - Cable).
Google "Canada backbone providers". LOTS of choices. DSL & Cable aren't terrible, but they usually won't get you the peering you need to be competitive. You want a Bell Canada, or similar. Someone with OC3+ trunks to feed from.
More than anything, it will come down to differentiation. If you can offer an incredibly (must be incredibly, not incrementally!) better set of features, service, and reliability, you MIGHT be able to make a dent in the market, as long as you scale organically.
Its not impossible, but its certainly improbable.