Don’t start with maximum capacity, start small, and think about scalability – how fast you can do it, and how you will do it. Then map the plans to what your selected hosting provider offers. Avoid temptation to use your own hardware, unless you really have resources for administering and maintaining it and a real need to have physical access to the servers. Even companies using their own hardware use virtualization to run virtual machines on top of physical ones.

Two years ago, when we were just experimenting with ideas of the social training log, a shared hosting option on Dreamhost gave us the best prices/features/quality combination. When we launched first closed version of the service named Moozement at the time, we switched to Dreamhost VPS, which allowed enough flexibility and had reasonable pricing. For HeiaHeia (Moozement beta version) we’ve chosen Linode, as it offers Xen virtualization (as opposed to Dreamhost’s VServer), servers with up to 14400Mb of RAM, easy resizing, wide selection of Linux distributions, and several data centres to choose from, including one in London. As HeiaHeia grows, we are preparing for the next step, but for now Linode proved to be excellent choice.

If your company is based in EU, you also need to remember about EU Data Protection Directive – your servers need to be physically located in one of the European Union countries or in the US with a provider following Safe Harbor Principles.

If you have no clue about how much CPU/RAM/traffic your application will need – check reference cases – there are plenty on the internet. Here are just a couple of examples: social network Ravelry and Facebook app Friends for Sale.

Want second opinion? Check these:

• Teemu Kurppa from Huikea has a great write up on choosing hosting subject – Teemu has chosen Slicehost

• Eivind Uggedal has a very thorough comparison of Slicehost, Linode, Prgmr, Rackspace and Amazon EC2 pricing and performance and arrives at a conclusion that Linode gives you best bang for the buck.

In case you decide to use Linode, use this referral link to give us some reward

If you’re planning to host a low traffic service, and don’t want to spend much time on system administration – Dreamhost is a great starting point. And as I already wrote earlier, Dreamhost provides excellent value for money. If you are looking for a good hosting – use IVANKUZNETSOV promocode and get a $50 discount when setting up an account on Dreamhost.

This proved to be a non-trivial task. There is a number of tutorials on the net, but none of them described the full solution. So after getting it all to work, I decided to share all the tips and tricks. Feel free to comment, if you will find problems with the following set of instructions.
SSH to redmine.mydomain.com as a user that will be running Redmine (in the following examples it will be ‘redmine_user’).
First, you need to compile openssl – it will be required for curl, git and redmine.

mkdir ~/tmp
cd ~/tmp
wget http://www.openssl.org/source/openssl-0.9.8k.tar.gz
tar xzvf openssl-0.9.8k.tar.gz
cd openssl-0.9.8k
./config shared zlib --prefix=$HOME/.packages
make
make install

Let’s tell the world that we keep binaries and libraries also in the local directory. Edit ~/.bashrc (it is used by all non-login shells):

export TZ='Europe/Helsinki'
export PATH="$HOME/.packages/bin:$PATH"
export LD_LIBRARY_PATH="$HOME/.packages/lib"
export GEM_HOME="$HOME/.gems"
export GEM_PATH="$GEM_HOME:/usr/lib/ruby/gems/1.8"
export PATH="$HOME/.packages/bin:$HOME/.gems/bin:$PATH"
export RUBYLIB="$HOME/.packages/lib:$RUBYLIB"
export LD_LIBRARY_PATH="$HOME/.packages/lib"

# this ensures our gem install processes don't get killed by the DreamHost police
alias gem="nice -n19 ~/.packages/bin/gem"

(You can skip TZ – it is just usefule to have correct time set for your environment. Use tzselect to find out correct TZ string for your region)

And edit ~/.bash_profile (it is used by login shells):

umask 002
PS1='[\h:$PWD]$ '
alias ll="ls -l"
EDITOR="/usr/bin/vim"
. .bashrc

Now let’s apply the changes in active shell:

cd ~ : . .bash_profile

Then you need to compile curl, to be able to compile git with curl and execute clone commands on your server.

cd ~/tmp
wget http://curl.haxx.se/download/curl-7.19.5.tar.gz
tar xzvf curl-7.19.5.tar.gz
cd curl-7.19.5
./configure --prefix=$HOME/.packages --with-ssl=$HOME/.packages
make
make install

Now get and compile Git. If you are not using Dreamhost PS, you might want to compile it with NO_MMPAP=1, to reduce
probability of git process getting killed by Dreamhost police robots due to extensive memory

cd ~/tmp
wget http://www.kernel.org/pub/software/scm/git/git-1.6.4.tar.gz
tar xzvf git-1.6.4.tar.gz
cd git-1.6.4
./configure --prefix=$HOME/.packages --with-curl=$HOME/.packages
make
make install

Let’s start with ruby and rails related stuff. First readline library is needed, for script/console to work.

cd ~/tmp
wget http://ftp.gnu.org/gnu/readline/readline-5.2.tar.gz
tar xzvf readline-5.2.tar.gz
cd readline-5.2
./configure --prefix=$HOME/.packages
make
make install

Install ruby:

cd ~/tmp
wget ftp://ftp.ruby-lang.org/pub/ruby/1.8/ruby-1.8.7-p72.tar.gz
tar zxvf ruby-1.8.7-p72.tar.gz
cd ruby-1.8.7-p72
./configure --prefix=$HOME/.packages --with-openssl-dir=$HOME/.packages --with-readline-dir=$HOME/.packages
make
make install

Install rubygems:

cd ~/tmp
wget http://rubyforge.org/frs/download.php/60718/rubygems-1.3.5.tgz
tar zxvf rubygems-1.3.5.tgz
cd rubygems-1.3.5
ruby setup.rb config --prefix=$HOME/.packages
ruby setup.rb setup
ruby setup.rb install

Now you can install all required gems and freeze them if necessary.

Installing RedMine

Refer to http://wiki.dreamhost.com/Redmine for details.

But there’s one trick – if you want RedMine to use just compiled version of Git – edit in lib/redmine/scm/adapters/git_adapter.rb:

# Git executable name
GIT_BIN = "/home/username/.packages/bin/git"

If this is not done, default Dreamhost git will be used (which is too old at the moment 1.4.4.4) and Git repository browsing will not work in RedMine
(see http://groups.google.com/group/phusion-passenger/browse_thread/thread/5080d7c7cfbcf20e).

Setting up Git repository

Refer to http://wiki.dreamhost.com/Git for details.

Couple of tricks here. There are bugs in WebDAV functionality in Ubuntu – so if you’re using it – launch Nautilus, use “File->Connect to server…” menu from there (not from the system menu), don’t enter user name in the dialog – leave it empty and enter it when you’re requested username and password in the next dialog.

When setting up WebDAV access rights, give access to user “redmine”.

Setting Git repository copy for Redmine

Create ~/.netrc for your redmine user on Dreamhost

Insert the following line in that file

machine git.mydomain.com login redmine password [redmine_password]

where redmine_password is the password you gave to user redmine in the previous step.
.netrc will ensure that password is not asked when git is accessing the repository.
You don’t need to bother about creating .netrc if you have a public repository (or at least available for cloning without password).

Create a local copy of the repository

For RedMine to be able to display Git repository, it needs to have a local clone of the repository.

mkdir ~/git_project_clones
cd git_project_clones
git clone http://git.mydomain.com/repository_name

Now you should have a local copy that can be used from RedMine.
All you have left to do is to set up regular pulls from the master repository to this local copy. Use command

crontab -e

Add the following line to pull latest change into local copy every 5 minutes:

*/5 * * * * cd /home/redmine_user/git_project_clones/repository_name && /home/redmine_user/.packages/bin/git pull

Make sure that you specify full path to git – otherwise it will execute Dreamhost default git 1.4.4.4 and command will fail with “refusing to create funny ref ‘remotes/origin/*’ locally” error.

Save and exit cron editor.

(You might also want to check Redmine own wiki: http://www.redmine.org/wiki/redmine/HowTo_keep_in_sync_your_git_repository_for_redmine)

Set repository in the settings of your project in RedMine: /home/redmine_user/git_project_clones/repository_name/.git

Now you need to manually update Git repository changesets in RedMine:

cd ~/mydomain.com
script/runner "Repository.fetch_changesets" -e production

And set a hook to your repository to do this every time repository is updated – edit ~/git_project_clones/repository_name/.git/hooks/post-update file and add the following command ther:

cd /home/redmine_user/mydomain.com && script/runner "Repository.fetch_changesets" -e production

When writing this blogpost I found a lot of useful information on Dreamhost own wiki as well on these blog posts:
http://www.wavethenavel.com/2008/09/08/bootstrapping-a-dreamhost-account-for-rails-and-git/
http://juliobiason.net/2008/05/19/git-repositories-on-dreamhost-via-ssh/
http://www.simonecarletti.com/blog/2009/07/configuring-git-repository-with-redmine/