Nov 8, 2002 : The webhost industry: week review

📅 November 8, 2002 - This week saw the culmination of a great deal of planning for a number of companies in and around the Web hosting industry, with financing and acquisitions, the settlement of a lawsuit, the announcement of several new partnerships and the introduction of new executives at more than a few communications firms.
On Monday, digital broadcasting solution provider VitalStream announced that it had secured an investment of $1.1 million, and entered into an agreement to purchase certain assets of Epoch Networks Inc. and Epoch Hosting Inc. The investment, from Dolphin Equity Partners, came through the sale of VitalStream convertible notes and common stock.
VitalStream says the acquisition is part of its plan to expand its CDN customer base, and involves the purchase of Epoch's stake in a Los Angeles data center and more than 1,000 customers.
Negotiations for a settlement in a lawsuit brought against managed hosting provider SAVVIS by telecom equipment maker Winstar Communications Inc. reached a positive end this week, said SAVVIS on Wednesday. SAVVIS says it has agreed to pay Winstar $1.5 million in satisfaction of all disputes arising out of a series of agreements entered into by the companies in 2000 for telecommunications equipment and services. In September of 2001, Winstar filed a suit seeking approximately $38 million in total damages.
SAVVIS says its financial position has improved significantly as a result of the settlement, and the elimination of over $40 million in liabilities. The company says it will record a gain of $39.6 million in the fourth quarter of 2002.
Along with the settlement of the lawsuit, several companies reached agreements based on far more amicable beginnings. A number of communications firms announced this week that they would form strategic alliances designed to expand the scope of each company's business.
On Monday, managed hosting provider NaviSite announced that it has established a partnership with Progress Software Corporation unit the Progress Company to develop managed service solutions for that company's ISV and ASP clients. NaviSite says the relationship will allow thousands of independent software vendors to become ASPs, providing their applications online as a hosted service without having to develop the infrastructure necessary.
European colocation provider Redbus Interhouse said on Tuesday that it has formed a strategic alliance with Internet security specialist Internetworking Strategies Limited (INSL), in order to make INSL's Augmenta Managed Service available to Interhouse customers. The agreement, says Interhouse, will allow all of the company's customers to outsource their security systems using the Augmenta suite, which is monitored by INSL staff. INSL will also be promoting Redbus Interhouse as its colocation provider of choice.
A number of companies in the Web Hosting industry announced changes to their management teams this week, including the appointment of several senior executives.
Telecommunications carrier TELUS announced on Monday that two executives from Verizon have joined the company's board of directors. Verizon group president Daniel C. Petri and senior vice president and chief financial officer Alfred C. Giammarino will replace Michael Masin, who recently became vice chairman and COO of Citigroup and Fares Salloum, who will be retiring at the end of the year.
Irish Web hosting firm HostIreland.com announced on Monday that it had completed several major moves, including the appointment of a new manager and the acquisition of Renview.com. HostIreland.com appointed Neil O?Neill to the position of business development manager, making him responsible for growing the company's customer base and developing its software capabilities.
The company acquired the hosting services of Renview.com for an undisclosed sum, with all of that company's customers becoming customers of HostIreland.com's hosting service.
On Wednesday, Web hosting company Interland said that it has appointed Tiffany Bova as vice president of sales and marketing. Bova came to the company in August to lead its reseller channel in sales and marketing. In her new role, she will lead sales and marketing for the company's shared hosting line, reporting directly to chief executive Joel J. Kocher. Bova is an expert in the technology reseller channel, previously responsible for channel sales at Affinity Internet.
Internet routing service provider Internap Network Services announced on Thursday that it had appointed former BellSouth executive David L. Abrahamson as its vice president and chief marketing officer. Abrahamson will oversee the company's worldwide marketing strategy, programs and products management. Before joining Internap, Abrahamson was responsible for developing and maintaining BellSouth's Internet data center products and services.
This week's appointments, partnerships, acquisitions and settlement are all the result of often-lengthy development processes. And these results demonstrate vividly that the companies in the Web hosting business are still building strategies around future successes, however stifling current conditions may be. Optimism among service providers, of course, is the best indicator we have that the market is showing signs of becoming more vital in the months to come.