Companies that offer reseller web hosting packages fall into two categories. The first category includes the large data centers. These facilities house hundreds or thousands of web servers. Firms with these resources concentrate their skills on server maintenance and administration. For them, offering reseller web hosting packages provides a “division of labor” of sorts: they can focus on their technical expertise, and leave marketing and a certain amount of customer service to the resellers.

The second category of companies that offer reseller web hosting packages are one step down from the large data centers. They lease or colocate their own dedicated server(s) in secure data center facilities. They may actually own the server, and even maintain it. Keeping the server in another company’s data center often allows them to benefit from improved security, a faster connection to the Internet, and other items.