Yep. That is a very good idea. Particularly if you have lots of space to space. I have never tried it yet though, but it is a very good idea. Offer free hosting with limited resources. Basic HTML hosting, no php, no database no emails. Or maybe 1 email. No add on domains, 1 or 2 sub domains, and 1 parked domain, and 1 ftp. That should be enough for a free hosting package.
And, in the terms of service, mention clearly that any site hosted free on your servers shoudl include atleast 1 link to your business website. Something like powered by Indyahozting or whatever your company’s name is.
What is in it for you? Well, for the idle space and with not much of resources that are being used, you get a lot of back links, and if you are lucky, looking at your servers uptime and stuff, if the guy wants to host a blog or something, he woudl definitely go for an upgrade. And you will make a sale, and if he forgets to remove the backlinks, you are lucky again.
And, whe you offer free hosting, you will find yourself on the top of the search engines. Because, on the internet, whereever you see the word free, people just come in to have a look, and are bound to sign up, and you get a huge database to which you can send out newsletters unless they wish to unsubscribe. You can promote your packages to the news letters, your affiliate programs.
Corporates never go for the free stuff, it will most probably be school and college kids who want a website on a free hosting, and to earn some extra cash, they would go with your affiliate programs.
It is indeed a good idea.
But, draw backs? When you offer hosting for free, there is a heavy possiblity that illegal sites can be hosted with ease. You need to do a lot of monitoring, and verification of email and stuff, so that if something goes wrong and the authorities come knocking at your door, you will be able to point in the direction of the curlprit who has been misusing your hosting package.