What is WHMCS? Beginners Guide - Run Web Hosting Business
An analogy can help to clarify what is WHMCS and why is so important in web hosting world.
Besides being most widely used CMS, WordPress is the most popular blogging platform on the internet. If you run a blog, WordPress is the answer.
Similarly, as far as running a web hosting business, WHMCS is the most popular and used software by hosting providers, web agencies, IT professionals and also developers.
It is the platform for excellence that automates all aspects of operating a web hosting and domain registrar business. Thanks to its flexibility, WHMCS can also accomodate other various business needs.
As a reference, currently I use it to sell softwares but in past I used it to run game hosting, web hosting, VoIP and an e-commerce. More recently I used it to remotely control mining rigs, masternodes and wallets for cryptocurrencies. I know people that use it just for billing and for the integrated support suite.
WHMCS has much in common with WordPress.
They are both the undisputed leaders in their respective markets with the former that attracts about 50.000 providers worldwide. If this number doesn't impress you, know that the average provider hosts about 1.000 websites and that this often includes domain registrations.
But that's where the similarity ends. WordPress is free, open source and good at many things. WHMCS kicks off at 15.95 $ per month, source code is obfuscated and even though is solid platform to run a hosting company, there are some shortcomings that we are going to address later.
First thing first, let's talk about mispelling and mispronouncing.
I know that WHMCS sounds like "CMS" but it is not WHCMS nor WHMCMS. The letters stand for Web Host Manager Complete Solution, a name that recalls its reference market.
WHMCS story began back in 2005 when Matt Pugh released the first version of the software. You can learn more about WHMCS team in their About Us page.
Big changes started in 2012 when WHMCS partnered with cPanel. Few years later in 2019, following in the footsteps of Plesk and cPanel, WHMCS joined WebPros, a group started by the Oakley Capital Group.
In web hosting industry Plesk, cPanel and WHMCS are big names. They effectively control the vast majority of the market.
There's no such thing as a free lunch. WHMCS starter license key kicks off at 15.95 $ per month.
You can get one from whmcs.com or from authorized resellers. In the latter case the license can even be offered free of charge. This option is valid only if you purchase also a reseller plan. In essence, you hosts your customers sites on multi-domain plan or VPS for rent.
License key price varies depending on the number of active customers you have on a monthly basis. Before 6th of April 2021, tiered licensing structure was like follows:
- Up to 250 clients 18.95 $ per month
- Up to 500 clients 29.95 $ per month
- Unlimited clients 39.95 $ per month
Considering the size of the market and the problems this software solves, prices were reasonable. Especially for hosting providers that have high running costs.
The very fact that the license can't cost you more than 39.95 $ was a big plus as it allowed to run a successful business safe from high fees. Just to be clear, it had nothing to do with PayPal fees.
Based on my experience small providers make 24.000 euro per year but the vast majority are well above 60.000 euro. That said, there is a considerable amount of companies that make hundreds of thousands of euro if not millions (don't ask me anything ).
As for the current situation, in 2021 in the middle of the COVID-19 crisis, WHMCS increased prices up to 3154%. That's not a typo. Most of my customers are moving from 479 $ to 3599 $ per year (if not worse). That's a 651% increase.
I was expecting that from years. As I said earlier, WHMCS is currently owned by WebPros, a capital group that completed many acquisitions in the hosting industry.
Before WHMCS they even managed to acquire Plesk and cPanel that were competing with each other since always. Basically it's like Ferrari and Mercedes or Intel and AMD having the same owner.
Price-wise, understanding corporate structure is important. WebPros resembles a monopoly and over the years used its dominance to increase prices for both Plesk and cPanel. I guess 2021 was the right time to milk WHMCS customers.
If like me you were the lucky owner of an owned license, support & upgrades was the only recurring cost (59.95 $ on a 6 month basis). Bear in mind that WHMCS no longer sells owned one-time licenses. Moreover they can't be traded.
Owned licenses were available for a one-time up-front purchase including 12 months access to support and updates. Personally I paid 324.95 $ for my Owened License No Branding. Before trade-ban, such licenses were selling for about 1.000 $.
That said, watch out if someone is trying to sell you WHMCS lifetime license. It's a scam since they can't be traded.
That being said, due to 2021 price changes mentioned in the previous chapter, WHMCS went back on its word. It sounds ironic but lifetime licenses have expired so we're all on the same boat. I think this one deserves a new meme.
Nulled or decoded software refers to products that have been stolen and available for free. When you download nulled WHMCS from random websites, there is no guarantee that they are safe to use. Not to mention using nulled is illegal.
One can easily hide malicious codes in a nulled software. One hand you enjoy a free software but on the other you risk security flaws and vulnerabilities.
How about I give you a nulled WHMCS that contains a "surprise" that allows me to enter your servers, steal domain names and all your password remotely? It would take me less than 10 minutes. On the contrary you will need years to find the backdoor in million lines of code.
Apart from that, another question arises. WHMCS provides License Verificaton tool that anyone can use to find a domain which is not authorizied to use their software.
There have been many cases of hosters ruining their online reputation because they were running nulled installations.
That said, it is worth spending a few words about this tool.
We use multi-domain in WHMCS. Our website is also accessible from katamaze.it (I use it for italian visitors). A lookup for this domain, results in the following message.
This is a false-positive. The problem is that license verification only looks for the main domain name. The tool can't be used to check secondary ones.
When it comes to control panel for web hosting and domain registrars, comparisons inevitably run through the minds of many so here is the thing. WHMCS is the leader of its reference market but alternatives exist.
+39$/yr support & updates
We can argue for days about who has the best features. I have opinions like everyone else but I prefer not share my thoughts as I have a limited experience with these alternative softwares.
Judging a book by its cover is never a good idea. It would be unfair to HostBill, Blesta, ClientExec and Ubersmith developers that are making an impressive job.
What I'm trying to say is that is that it takes a lot of time to review and test softwares that run your business. As a reference I'm using WHMCS since 2007 and I'm still learning but I will say one thing.
I'm the first to admit that WHMCS is getting worse. I'd pay 10.000 € to stop WHMCS team from adding new pointless features and bugs but on the internet people blame them for pretty much anything.
I can name tens of people that cyclically write they are leaving this software but days later they're still asking questions about WHMCS. We live in the era of free live demo. We should all learn to use then and form balanced opinions.
Going further, it is no secret that WHMCS has the best quality/price ratio. It offers an all-around platform that is highly extensible. Even though WHMCS isn't perfect, it is good at many things.
Besides popular alternatives, it is worth spending a few words on custom-made platforms. If you are thinking about creating one to emulate what WHMCS already does, you better rethink your strategy.
Unless you have the budget of GoDaddy, you can't keep up with changes in technology. It's not just about creating the software but everything that's around. Integrating registrars and web hosting control panels is an ongoing process that never stops.
Over the years I helped many companies migrating from custom panels to WHMCS. I've never seen the opposite. Reinventing the wheel creating a copy of inferior value, in my opinion makes no sense.
Let me give you a little background. I started using WHMCS in 2007 and since then it has always been with me following all transitions I made. From beeing a game hosting provider to web hosting and now software developer.
Believe me when I say free alternatives to WHMCS are scarce. After so many years the only hosting panel that comes to mind is BoxBilling but it is more a freemium software. The free version in fact is set with a lot of limitations:
- 1 staff member
- 2 products categories
- 5 products
It also clearly lacks many of the WHMCS features. The very fact that their forum is locked due to spam, doesn't sound promising but that's just my opinion.
Speaking of my opinions, I don't get why free softwares exist in this market. I mean, we are talking about running a hosting business. If one can't afford a few bucks for such a critical software, maybe one shouldn't do hosting altogether.
The sooner you learn you need a WHMCS expert, the quicker you'll be successful. I'm not talking about developers that are experienced in other areas or with other softwares. You need an actual expert of WHMCS.
To put it in a simple manner, being expert in WordPress doesn't play any role in using WHMCS. The learning curve of such complex softwares is very steep. Being a developer is not enough.
Over the years I've seen many tragicomic WHMCS setups where companies dissipate energies and waste time employing workers in unnecessary labor-intensive processes. All because they haven't figured out how to fully configure and use it.
Part of my job is to train companies. I also help them to rethink their operating models to get out of traps that many people fall into.
There is nothing worse than misconfiguring settings that in the long run cause troubles. Making bad decisions can make the difference between success and failure.
To give you an idea of what I'm talking about, one day I've seen a heavy PHP library (as bigger as WHMCS) that was used to run queries on database. That's pretty bad if you think that all it takes to interact with database is a single line of code.
Don't get me wrong, I am not not applying for the job. It's just that I've seen so many messed-up systems that my eyes hurt. Below I'm going to list experts of WHMCS including our competitors. With one exception, I can recommend them to anyone.
|Modules Garden 2011|
| WHMCS Global Services 2010
They steal contents and attack their competitors. And they've been hacked
|WHMCS Services 2009|
If you can't afford consulting a professional and you have a small budget, go for the learning by doing approach. To this end, I prepared a WHMCS guide to get you started as quickly as possible.
Once you are ready to go, move to more advanced topics like SEO and integrations. But using this software isn't all tickles and hugs. WHMCS has a "dark side" made of some terrible bugs: MUST read before launching a WHMCS website.
As for the forum, among all softwares of this kind, WHMCS is no doubt the one with the biggest community. Don't forget this is still it is a small niche compared to say WordPress so do not expect fast replies.
In Marketplace you can find thousands of third-party modules to extend the features of your system but not all developers use it so learn to rely on Google too.
Obviously you can also submit support tickets to WHMCS staff but I suggest you to this channel only as a last resort. As you can imagine lot of people open tickets on a daily basis hence using forum is usually preferable.
Many fall into a trap of believing they don't need automation. The very essense of using WHMCS is to embrase automation so that you can focus on growing your business.
The most common excuses I hear are «I prefer to check it manually», «I want to double-check some stuff». But «Oh, I didn't know that» is a classic.
This attitude halves productivity leading to lower profits. In the same time it increases defects due to human errors.
Automation frees up workers from frustration and allows them to focus on more value-added activities like brining in more customers.
The numerous features combined with a large number of third-party addon modules, make this software suitable not only to manage hosting, domains and servers but also for other types of businesses.
When you install WHMCS, you will not use all the features it offers from day one. But it's nice to know that it can support any growing company scaling from small to large enterprise.
To give you an idea about how well the software performs, it used by companies with million euros in revenue. The amazing thing is anyone can get such a powerful tool for as low as 15.95 $ per month.
The list of WHMCS integrations that open up countless of customizations is long. What do you need?
- Addon Modules (eg. Mercury, Billing Extension)
- Server Modules (eg. Plesk, cPanel, DirectAdmin)
- Registar Modules (eg. eNom, Internetbs, Hexonet, ResellerClub)
- Payment Gateways (eg. PayPal, Stripe, Bank Transfer, Bitcoin)
- Fraud Protection (MaxMind and FraudLabs Pro)
- Reports, (clients, transactions, notes, domains...)
- Widgets (income, To-Do list, Activity Log...)
WHMCS integrates with leading web hosting control panels, providers, registrars, SaaS and payment solutions. There are over 200 native integrations not counting third-party modules. If you need something more, read the following chapter.
Action hooks are one of the most important features of WHMCS. The combined use of hooks and API, opens up a world of unlimited customization. Mastering the creation of an action hook can make the difference in perfecting the use of this software.
As the name suggests, an action hook allows to execute your own code when specific events occur inside WHMCS. Hook Index lists all hook points, available parameters and responses. Begin by reading getting started guide.
When you know the basics but you still can't code, don't despair. I have a great surprise for you. I maintain an updated list of free action hooks for WHMCS 100% open source. I continually add new ones and improve existing ones. You find things like:
- Forcing payment method depending on invoice balance
- Offer one-off products
- Stronger password generator for provisioning
- Group clients based on purchased items, registration date or domains
- An improved integration with Chatstack
- Conditional support departments
- Churn rate report
Feel free to use them on your system, adapt them to match your needs or as a source of inspiration for other projects. I know it takes time but if you plan to use this software for a long period of time, learning action hooks is really worth the effort.
There's a lot of debate about whether or not WHMCS should be open source. PHP files are in fact obfuscated with ionCube. Some people claim that scripts should be open to facilitate developers job.
Curiously such claims don't come from developers specialized in WHMCS. I'm not a genius but since 2007 I have never had the need to see source code. You can get almost anything done with action hooks, API and programming skills.
In some occasions having access to source code would have helped me but I still think that code obsuscation is not a problem. If you've been suggested to stay away from WHMCS because of ionCube, understand that we're the living proof that working with closed source is perfectly fine.
There are some parts of WHMCS that are not so good as you would expect. Namely CMS capabilities, billing and affiliates. Running a hosting business with such limitations is not ideal.
The good news is that we created modules exactly to address these weaknesses. By using them you can turn such weaknesses into into strengths.
Transform WHMCS into a complete CMS like WordPress:
The complete billing solution:
Boost business growth with affiliate marketing:
The software used to be relatively simple to update but over the years the situation has worsened. WHMCS staff always says that the latest version is stable and recommended for new installations and upgrades. Sadly that's not true.
The truth is that upgrading WHMCS feels like jumping off cliffs believing you can fly but here is the "secret". DO NOT upgrade your system when a newer version is available for download unless you like playing russian roulette.
Stick to your version till is still in LTS (Long Term Support). In this specific case running an outdated version is not the end of the world. The only exception are security patches.