Mar 21, 2003 : The webhost industry: week review

📅 March 21, 2003 - Within the news to come out of the Web hosting industry this week, many of the most significant stories were related to the software that powers the hosting business, as vulnerabilities were discovered in several of the leading server software platforms, and a number of announcements came from the companies developing hosting automation software.
Reports released early in the week said that a security hole in Microsoft's Windows 2000 operating system and Web server software was being exploited by online attackers to take over corporate servers. The flaw was discovered after hackers began using it to breach customer systems, exploiting the vulnerability before it had been uncovered by researchers, and before work had begun on a patch. Microsoft released a security bulletin, and a patch, early in the week.
Additional reports this week said that Linux programmers had uncovered a security hole in the central Linux code that could allow a user without permission to take control of a machine. Key members of the open source and Linux community said the vulnerability affects the 2.2 and 2.4 series of Linux kernels, which are at the center of a number of Linux products, including those recently released by companies like Red Hat and SuSE. Early in the week, Linux developers began posting patches for the vulnerability, which could allow local users to gain root access, taking control of a machine. The local vulnerability is considerably less severe than a remote vulnerability, which would allow for online attacks.
There were developments beyond vulnerabilities for the Linux operating system, however. Early in the week, Linux developer Red Hat Inc. and computer systems developer HP announced that they have expanded their partnership in an effort to increase Linux sales to business customers. Through the agreement, HP will become one of Red Hat's preferred partners, working to sell the company's entire line of Linux products.
Along with the big news in the server software market, there were also several major announcements this week from developers of hosting automation software.
On Monday, hosting automation solution developer Positive Software announced that it has released version 2.3 of its H-Sphere multi-server Web hosting control panel. The new version includes a number of new features, among them are the ability to move clients between servers, an integrated knowledge base system, mass email spell checking, a new Web-based file manager for Unix and Windows and support for the eNom domain registrar. The updated H-Sphere also supports eight new credit card payment solutions, including PayPal, 2Checkout and WorldPay, bringing the total to 21.
On Tuesday, automation solution developer Sphera announced that IBM has become a reseller of Sphera's HostingBusiness Suite, a comprehensive solution for hosting automation and management. IBM will offer hosting providers, carriers and resellers the ability to buy the solution for Linux and Windows on an IBM eServer xSeries or BladeCenter system. The solution has already adopted by Verio Europe, says Sphera, to provide a solution for its resellers.
Later in the week, automation solutions provider Hosting Controller announced that it has released its Build 3 Service Pack 4, providing a completely revamped billing system, a new bandwidth monitoring utility, rich reporting and a new host-to-reseller auto signup. The company said its billing system now supports almost every payment gateway, and incorporates a number of new features for invoicing, alerts and reminders, deactivation and reactivation, online and offline payment and multi-currency support.
Of course, along with the news from software side of the business, there was important news from the companies more directly involved in the hosting business, including several announcements regarding acquisitions.
On Monday, colocation provider Switch and Data announced that it has acquired the assets of Internet peering exchange provider PAIX.net Inc., including locations in New York, Palo Alto, Seattle and Vienna. Switch and Data says the acquisition further improves its EBITDA positive financial standing, as the combined company will generate free cash flow and annual revenues of about $440,000 per employee, an increase of about 30 percent. The acquisition will also increase the company's customer base to more than 400.
Also on Monday, communications carrier NetCarrier Inc. announced that it has acquired a communications facility in Newark, New Jersey from bankrupt telecommunications company Telergy, as a step toward offering voice and data services in northern New Jersey and southern New York. NetCarrier says it paid $750,000 for the facility, which has an estimated value of $12 million, in a February transaction. NetCarrier says the facility will connect easily to the company's Philadelphia network. The company plans to launch its integrated voice and data services in New York City and northern New Jersey by late summer.
Perhaps as notable as the news itself this week was the prominence of stories regarding the software that powers the Web hosting business. The view from slightly higher on the supply chain can often provide a unique and interesting view of some of the issues that impact the Web hosting business from week to week.