IBM: Pushing the Envelope For the big hosts, staying at the top [...]

📅 June 10, 2001 - As the Web hosting industry continues to develop, with the ranks of hosting companies thinned by the harsh climate of financial reality, competition in the industry has also narrowed to focus most prominently on the big players vying for the top spots. For the big service providers, the nature of business is expansion, and exploration, not only in the geographic network-building sense, but also in the expansion of their services to include new and unexplored territory.
In May, IBM continued its geographic expansion by investing $17 million Canadian in a project to open a Web hosting facility in Montreal, Quebec. And with the establishment of the new center, IBM continues to add to the infrastructure that supports its massive hosting operations. The company currently provides hosting for over 5,000 clients, and has over 74,000 servers under management throughout the world.
According to Paul Lovell, a Web hosting executive responsible for IBM's hosting business in Canada, the geographic expansion is a carefully considered process. ?We listen to our customers, is the bottom line of it,? he says. The company looks for markets that demand its presence, attempts to design solutions that meet the needs of its customers there, and applies them across the board, geographically. ?Clearly we need to have a presence in a city like Montreal to serve the Quebec marketplace,? says Lovell. ?The demand is there, and customers were asking us not only to have a physical presence by having the data center, but also to expand our presence across eastern Canada.?
IBM's response to that demand for a physical presence can happen quickly. ?From the time we really decided that we were going to go forward and complete an Internet data center in Montreal,? says Lovell, ?we were able to do it within the year, in less than five months.? The reason for the rapid turnover is the fact that IBM already has existing data centers across the country. ?What we?ve done,? says Lovell, ?is we?ve used the investment we?ve already made in building these facilities, and set up part of our data center for use as an Internet data center, specifically designed to provide Web hosting services to our customers.? The facility is built up to be a class-a data center, including all of the appropriate infrastructure elements sought by hosting customers, including diversity among telecommunications providers, redundant power, security and environmental controls.
The Montreal data center is IBM's second facility geared specifically toward Web hosting in Canada, the other residing in Toronto. ?Although we have the capability of providing Web hosting services across the country,? says Lovell, ?and we do.? The company runs a total of 37 data centers worldwide specifically designed to offer Web hosting services.
By expanding its physical presence into Montreal, IBM is betting on business community in Quebec's need for Web hosting services, because its hosting offerings are limited entirely to the business segment of the marketplace. IBM isn?t interested in offering the $15 shared hosting package. Its hosting services range from the simple colocation, where the customer only wants to acquire the real estate, bandwidth and power from IBM, all the way to what the company calls its fully managed services.
The major reason that IBM targets businesses at its hosting customers is that the company's services don?t begin and end with Web hosting. ?If a customer wants to just acquire the Web hosting from us,? says Lovell,?then we?re happy to service them with the Web hosting. If they want to have us provide the entire solution end to end, then we?ll come to the table, and we?ll provide that to them as well.?
IBM's ?fully managed? services are a big part of the exploration. In this case, the kind of theoretical exploration that takes the company into new territories of service. And, according to Lovell, IBM is one of those companies that have traveled furthest into the area known as ?managed services.? He describes different levels of hosting services, from basic colocation, to what the industry is calling ?managed services,? which Lovell says includes layering on some additional services, like monitoring and reporting, backup and recovery, and additional systems administration or server operations. ?The next step up from that,? says Lovell, ?is what I?ll call fully managed hosting, which I think is something we have that's unique in the marketplace.?
As part of its fully managed service, IBM will provide everything for the customer. ?You just bring the content to the table,? says Lovell. ?We?ll provision the hardware. We?ll provision the software. We?ll do the setup for you. We?ll test the environment. We are responsible for problem management, change management and for daily ongoing operations.? Absolutely, says Lovell, there is a difference between this type of fully integrated solution, and those that attempt to bolt separate service elements together into a ?managed solution.?
It could be considered a luxury, or a responsibility, but there is no question that it is the leaders in the field that are taking up the task of defining terms like ?managed services.? It is the major companies like IBM that are exploring their own offerings, expanding on the services they deliver. And while the meaning of the term ?managed services? may vary across the hosting industry, IBM has certainly done its part to develop the services philosophy.
No doubt, the exploration will continue, both in geography and in services. But according to Lovell, IBM's customers are responding well to the company's move into Montreal. ?The response to the announcement, and the demand that we?re seeing has been terrific,? says Lovell. ?And at this current course and speed, we?re ahead of where we had structured our plans to be. So it has been very positive.?