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I'm starting a little web development company mainly using rails, but we've also got clients with existing joomla and php code.

How do people generally package hosting into web development quotes? Is it usually a pass-through cost, or is it common to charge an additional fee?

Also, since we do want to outsource the hosting, but we realise there'll most often be some configuration and maintenance to do, we're wondering how the hosting account is generally managed by development firms? Does each customer have a master account, or are there setups that allow some sort of hierarchy?

sendos
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I will often split these costs up or else use an affiliate program with your preferred host. Hosting tends to come at a monthly, quarterly or yearly fee.

One method is to lease a dedicated server from a hosting company and set it up the same way many hosts do to provide multiple virtual servers. Fee should be more-or-less based on what percentage of system resources and bandwidth each client is going to consume.

For example, if Client A needs 50% of your server and Clients B, C, D, E, F and G each need 10% then you need to be able to recuperate most of your leasing fees from Client A to pay for your dedicated server.

If you do this it is often simply a matter of running multiple websites from one host and sectioning each of them off.

Sometimes they can however easily share various resources. You don't really need to have 6 instances of MySQL running for instance and you can have a control panel which understands which user is logged in.

That Realtor Programmer Guy
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    I agree, with a key point being that the fees you charge for hosting customers' sites should recuperate your costs. Remember that in hosting the site for them you'll always have a little extra work keeping them up-to-date and so on, so you may prefer to add those costs into the hosting fee. Thankfully, your hosting/leasing fees these days are small enough that the price you pass on to clients is still quite reasonable, and most clients will be glad to pay you those recurring fees for the comfort of knowing that you are taking care of the site for them. – ewall May 23 '11 at 13:20