Oct 10, 2008 : The webhost industry: week review

📅 October 10, 2008 - In this week's most compelling ongoing story - one that's still playing out as I write this - a lawsuit from Microsoft left a hosting company reeling, and a possible bailout by way of buyout fell through.


Following Microsoft's formal announcement that it had named James McCreary, his hosting company Alpha Red and another company, Branch Software, that allegedly belonged to McCreary, posts began surfacing on popular message boards that Alpha Red was in danger of going out of business. The lawsuit accused McCreary of using his companies to distribute an illegal "scareware" product Registry Cleaner XP. Users said they were having trouble connecting with Alpha Red, and that servers were going offline. Alpha Red representatives posted to the thread saying they were working on a deal to sell the company to CWIE Holdings.

Later on Monday, CWIE confirmed that it had agreed to acquire the assets of Alpha Red, which included two data centers in Houston and Dallas. Representatives from CWIE, which owns CCBill and CaveCreek Hosting said McCreary wouldn't be involved in Alpha Red going forward, and they weren't concerned about problems from the lawsuit.

But there were problems from somewhere, or some thing. On Thursday, CWIE issued a very brief (but multi-syllabic) statement, saying the purchase "could not be consummated notwithstanding considerable effort," adding that it would be issuing no further word on the matter. Following the news, message boards were once again abuzz with users looking for further information on the as-yet-unconfirmed rumors that the company has all but shut down operations.

While the Alpha Red saga unfolded, the hosting businesses more common trends continued unabated. Several companies, for example, announced major green data center projects.

On Wednesday, Canadian telecommunications firm TELUS announced that it would build a $33 million dollar data center in Laval, Quebec. The building will include 44,500 square feet of space, with a potential for expansion, and will be built according to LEED environmental standards, says the company. Green technology will be a priority at the facility, which will employ free cooling and energy efficient equipment.

And on Thursday, data center operator Digital Realty Trust announced that it has completed a lease agreement to provide IBM with a data center property located in suburban Paris. The company says the facility employs its own POD architecture design configuration and construction methods, which help promote energy efficiency.

And, while new product launches are certainly not unusual in the hosting business, this week saw a couple of particularly interesting new products in the hosting business.

On Monday, SoftLayer announced that it had added a global server load balancing product to its line of services, designed to deliver a fail-over solution that decreases the distance between content and its final destination. The service starts at $99 per month, which covers a single domain and up to eight web servers.

And on Tuesday, French registrar Gandi reported that it had launched a new web hosting offering, after nine months of beta testing. The service will be built around a VPS model that will enable users to buy "shares" of a server, each representing an even chunk of the capacity and power, for $14 per month. Customers can add and remove these shares as they need them.

The greatest ongoing impact in this week's news will undoubtedly be from the Alpha Red story, which may have developed further since you started reading this weekly wrap. We'll stay on top of that one and bring you any updates as soon as they happen.