Why don't many big start-ups opt for a web-hosting company, but instead get their own servers even at the beginning. Take for example Facebook or Google. Facebook could have gone for a VPS. Is getting your own server better than a VPS or is it just additional learning? I know this is not a very straightforward question but didn't know any other place where it can be better answered.
closed as off topic by Gilles, Shane Madden♦, Iain, Holocryptic, Ward♦ Jun 12 '11 at 1:25
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That depends very much on what the startup is trying to do. For us, our main product was an app that performs data-processing, so shared-hosting, or even dedicated hosting, made very little sense. Especially considering the nature of the data we work with, where questions surrounding "who has access to this data, exactly, I want a list," can come up. Our main website was and still is in a hosting environment. Our one web-service is fully hosted by us for several reasons, not the least of which is that it is a full off the shelf .NET webapp with multiple components, and the same "who has access, prove it," requirements; while shared hosting for that does exist, data-control concerns trumped the cost efficiency concerns.
And that's just the startup I work for.
Also consider scale. A startup is built on hopes of being the next Facebook/Google, and you don't scale to that level by sharing your stuff. Plan from the beginning to be able to scale from one up to many, up to massively many, and so on. If there is sharing going on, it'll be VPS/Cloud, not shared hosting, as the startup can control the entire web environment in a way that can't be done with shared hosting.
When Google and Facebook both started, virtualization technology hadn't come as far as it had now. The IT world was very different when Google started, certainly.
But I'm afraid you're not likely to get a very good answer on this, for the simple reason that companies don't know if they are going to become huge when they first are founded. They may hope they will become the next Google or the next Facebook - in fact, most of them probably do - but ninety-nine times out of a hundred, they don't. There isn't a point in buying Google or Facebook level dedicated hardware which will cost an arm and a leg if you're never going to grow out of the "two founders and a dog" phase.