Aug 27, 2004 : The webhost industry: week review

📅 August 27, 2004 - This week's Web hosting industry activity was of the most traditional variety, and included news of acquisitions, executive appointments and large scale research reports, with many of them concerning some of Web hosting's biggest players.
On Tuesday, Web hosting and networking firm VIA NET.WORKS announced that it had completed its acquisition of the continental European operations of PSINet Europe. The transaction, which began in August of this year, gives VIA control of PSINet operations in Belgium, France, Germany, the Netherlands and Switzerland. The five operations provide managed hosting, managed networks and monitored access services to more than 4,000 customers in mainland Europe. The acquisition brings the VIA group's combined revenues to more than $110 million with a mix of roughly 30 percent hosting, 55 percent access and 15 percent other managed services.
Along with the major acquisition, there were major appointments at two large Web hosting firms, Telehouse and Inflow.
On Tuesday, managed hosting provider Inflow announced that Joe Milando had been appointed as general manager of the company's 11,000 square-foot data center in Philadephia, making him responsible for managing all business and operational aspects of the facility. Milando, previously employed at ProServe US, had held other senior management positions at Exodus Communications and EDS.
And on Wednesday, colocation provider Telehouse America announced that it had named Michael F. Vallone its deputy director, head of marketing, making him responsible for marketing and business development, corporate communications, public relations and media relations. Before joining Telehouse, Villone was managing director of Blue Eyes Marketing, and also served as vice president of global branding, marketing and communications at ABN-AMRO Bank and vice president of global equities strategic marketing for Merril Lynch.
Major research reports always seem to come in bunches in the Web hosting business, and this week's research information was no exception. This week's news included coverage of some significant hosting industry measures from IDC, Gartner and antivirus firm Sophos.
On Monday, it was reported that IBM had topped a recent IDC report, identifying it as the largest Web hosting provider in the world. At the same time, IBM pointed to the Web hosting market as a key area of focus in the company's ongoing efforts to increase revenue growth. IDC reported that IBM's share of the Web hosting market grew to 24.8 percent in 2003, up from 23.5 percent in 2002. The company's hosting revenues in 2003 were $1.37 billion, more than those of the next five largest providers combined. With its acquisition of the US assets of Cable & Wireless earlier this year, Savvis Communications became the second largest Web hosting provider in the world.
On Wednesday, a report from Sophos identified the US as the world's leading exporter of spam, with 43 percent of spam originating from within its borders. Sophos's "dirty dozen" list of the top spam-producing countries also identified South Korea as producing 15 percent, China with 12 percent, Brazil with 6 percent, Canada with 3 percent and Japan with 3 percent. South Korea, the most broadband-connected country in the world, has been solidifying its place on the list, with the percentage of spam originating from its shores nearly tripling since February.
And on Thursday, a report from Gartner said that global server sales had surpassed $11.5 billion in the second quarter of 2004, an increase of 7.7 percent over the same period last year. IBM continued to lead in terms of server revenue with 30.7 percent of the market share. HP followed with 27.3 percent and Sun and Dell held 13.0 and 9.8 percent respectively. Dell was the fastest growing server vendor, growing 20.1 percent from the second quarter of 2003 two the second quarter of 2004. IBM grew 10.8 percent in the same period.
This week was perhaps not one of any considerable long-term significance to the Web hosting business. There certainly weren't any surprises. Most significantly, an acquisition reached its expected conclusion, and ratings in a variety of areas confirmed what was already accepted to be the case. This weeks news was more memorable as an illustration as the kind of fundamental ongoing progress that takes place at the heart of a large and growing business like Web hosting.