May 23, 2003 : The webhost industry: week review

📅 May 23, 2003 - One of the more noticeable trends from the Web hosting industry last week, the acquisition and sale of Web hosting assets, carried a good deal of momentum into this week, as several companies announced the buying and selling of assets, while several hosting software developers announced new products and a powerful hosting player announced its withdrawal from the US market altogether.
After an announcemet last week that it was close to revealing its US restructuring plan, it was reported this Thursday that telecommunications giant Cable & Wireless is planning to withdraw from the market altogether, and is considering selling its Japanese operations. The restructuring would leave C&W focused on its UK and Carribean operations, which currently generate a combined profit of about £300 million annually. The company's new CEO Francisco Caio is expected to announce his plans when the company reports its full-year results on June 4.
While Cable & Wireless considered selling assets, a number of Web hosting companies actually made deals this week to move assets.
On Tuesday, NaviSite announced that it had completed its acquisition of the assets and certain liabilities of Interliant. The previous week, the company had announced its successful bid at Interliant's bankruptcy auction. Under the terms approved by the bankruptcy court, NaviSite has acquired assets and liabilities totaling approximately $5.7 million, adjusted from the $6.2 million figure announced last week. NaviSite says Interliant's messaging applications will provide an interesting addition to NaviSite's enterprise product portfolio.
Also on Tuesday, SAVVIS announced that it had agreed to sell its St. Louis data center to media company Reuters for $35 million, in an effort to strengthen its balance sheet. SAVVIS said it would lease back one third of the data center for 10 years, and that Reuters had agreed to award certain bid preferences to the company. In turn, SAVVIS agreed to reduce Reuters's minimum purchase commitment under an existing network services agreement. SAVVIS said it would use $12.9 million from the proceeds to reduce its debt to about $50 million.
On Wednesday, infrastructure provider OpSource Inc. announced that it had acquired the managed services business of Space4Rent.com, assuming full responsibility for servicing its customers. The services will continue to be provided by Space4Rent support teams, said OpSource, as it had agreed to hire on all of Space4Rent's employees. The companies' common business model, said OpSource, made it easy to transition customers and services without changes or interruptions.
And on Thursday, the long and complex saga of hosting company FeaturePrice came to a comparatively pleasant end as Florida-based ISP Atlantic.Net announced that it had purchased the assets of the company now under investigation by the Florida Attorney General's Office. Financial details of the deal were not disclosed. Atlantic.Net said part of the reason for its acquisition was to attempt to repair some of the damage done to the industry's reputation by the questionable activities of FeaturePrice in recent months.
Of course, there were other developments beyond the changing hands of assets. Particularly notable were the unveiling of several new hosting software solutions.
On Tuesday, software developer Oriensoft announced that it had released HostingAccelerator Version 1.6 for Windows, the latest version of its hosting automation software. The new version includes support for Windows 2003 Server and IIS 6.0, as well as support for the latest versions of popular mail and statistics servers such as Imail, Mdaemon, MailEnable and Urchin. The new version is available as a free upgrade to existing customers, and can be purchased by first time customers for $150.
And on Thursday, Ensim announced that it had released a new version of its WEBppliance control panel software, called WEBppliance Basic for Linux, designed for Web site owners operating their own dedicated servers. The product is priced at $149, says the company, and Ensim is considering developing a version for Windows. According to Ensim, the development of the tool for users migrating from virtual hosting accounts to dedicated servers is a reaction to the rapidly dropping entry prices for dedicated servers, and the corresponding boom in that market. WEBppliance Basic, says Ensim, is very similar in form to the control panels used by shared hosting customers, making learning the new system a simple task.
While most of this week's biggest Web hosting news related to the buying and selling of assets, several of those announcements were rooted in the discussion of companies' efforts to reposition themselves financially, a trend that appears poised to make a significant impact on the hosting landscape as Cable & Wireless departs the US market. The wake of that decision alone could mean an interesting summer for the Web hosting business, leading competitors working to position themselves and pick up displaced customers.