Apr 12, 2002 : The webhost industry: week review

📅 April 12, 2002 - It was a fairly upbeat week for the Web hosting industry, as the good news from companies finally seemed to heavily outweigh the bad after weeks of bankruptcies, cuts and closures.

The week was particularly busy for tech giant IBM, which made several announcements on the hardware, software and outsourcing fronts.
On Monday, the company said it had formed a services alliance with SuSE Linux, which provides a wide range of Linux-based software solutions. Under the agreement, IBM's Global Services unit will package and support turnkey implementations of SuSE's SuSE Linux Enterprise Server.
The next day, the company said it had signed a 10-year, $850 million (CDN) service agreement with Manulife Financial, a Canadian financial services giant. According to the agreement, IBM will manage Manulife's IT infrastructure and operations.
On Wednesday, Web hosting automation firm Sphera said it had signed an agreement with IBM that will see Sphera's HostingDirector Appliance Edition software integrated in to IBM's new eServer xSeries Hosting Appliance.
And on Thursday, the company, in conjunction with Microsoft and VeriSign, announced the publication of a new Web services security specification designed to help organizations build secure Web services applications.
The specification, known as WS-Security, supports, integrates and unifies several popular security models, mechanisms and technologies through a standard set of Simple Object Access Protocol (SOAP) extensions.
Aside from announcing its involvement in WS-Security, software giant Microsoft also announced a partnership with communications firm Cable & Wireless this week. Under the partnership, Cable & Wireless will deploy a Microsoft .NET application platform that will give customers the infrastructure and managed services necessary to manage XML Web services on C&W's Exodus hosting network.
With earnings season in full swing, there was also a lot of financial news to report. Regional ISP Everyones Internet, which is the parent company of Web hosting firm RackShack, announced its fifth consecutive quarter of growth in revenue, net income and subscribers this week. The company said its RackShack subsidiary would shift its focus from virtual to dedicated hosting, as it is projecting "phenomenal" increases in sales. In March 2002 alone, the company said it sold close to 900 dedicated servers.
Meanwhile, neutral co-location firm Telehouse said it had generated revenue growth for its fifth consecutive year. Telehouse maintains five data centers in the United States.
Web hosting and network services firm Globix Corp. proved that bankruptcy isn't necessarily the end of the road when it announced on Wednesday that it would emerge from bankruptcy protection April 18. Globix filed for bankruptcy protection March 4, but now plans to emerge from Chapter 11 after a round of financial restructuring.
Keeping with bankruptcy-related news for a moment, global network provider Level 3 Communications is reportedly eyeing its troubled rivals, including bankrupt networking firm Global Crossing. The company has already reportedly expressed interest in Williams Communications Group and Flag Telecom.
"We are not among the walking wounded," Level 3 CEO Jim Crowe told the Wall Street Journal. "The over-pessimism in the industry is creating opportunities for us to buy assets."
Level 3 also signed a major agreement with ISP United Online to provide the company with dial-up network infrastructure services.
The week wasn't as bright for fiber provider Metromedia Fiber Network (MFN), which saw two of its customers pull out of fiber agreements with the firm last weekend. Both Verizon Global Networks and Genuity Solutions terminated their fiber optic agreements with MFN. MFN, which is trying to get its finances in order, warned last month that it might be forced to file for bankruptcy protection if it could not restructure its debt.
And finally, managed services firm Loudcloud said late last week it would suspend its prior revenue guidance for the full fiscal year after one of its largest customers announced it was ceasing operations. Atriax, which provides electronic marketplace services for the financial sector, said Friday it would cease operations.
In light of the announcement, Loudcloud reiterated its previous revenue guidance for the first quarter of fiscal year 2003, which will close on April 30, 2002. However, the company said it would suspend its prior revenue guidance for the full fiscal year "pending its assessment of the impact of Atriax's announcement and the resolution of its discussions with Atriax," the company said.
The Web hosting industry had a fairly good week, buoyed by plenty of upbeat news. After months of gloomy news and outlooks, let's hope the industry gets on a bit of a roll for the near future, and keeps the good news coming.