Apr 2, 2004 : The webhost industry: week review

📅 April 2, 2004 - The most notable trend in the Web hosting industry news this week was a resurgence in the recently quiet area of acquisitions, including one particularly high-profile deal in the Friday sale of Host Europe. Along with the acquisitions, however, were several new and noteworthy developments in such ongoing issues as the recent impact of virus threats and the SCO Group's intellectual property claims.
On Friday, it was reported that the board of Host Europe had recommended that the company accept an acquisition offer from London-based Internet service provider Pipex Communications worth roughly £31.18 million in cash. Pipex says it expects the Acquisition to give the company additional focus on the hosting and managed services market, adding balance to its existing offerings. Host Europe says joining Pipex will add to the company's stability and capacity, and provide it with access to a broad new customer base.
On Tuesday, Tantus Networks and eCreative Group announced that they had acquired the shared hosting assets of Iowa-based Web hosting provider PowerSurge Technologies, including the PowerSurge name. PowerSurge reportedly sold the shared hosting business to focus on Fastservers, its dedicated hosting business, which will carry on as a separate organization.
On Wednesday, telecom carrier Cogent Communications announced that it had acquired the dark fiber and other network assets formerly belonging to Carrier1 International S.A. The company said the assets were acquired through a merger with Symposium Omega Inc., which acquired the network from German firm GLH GmbH. The acquisition will add 14 German markets to Cogent's pan-European network, including Frankfurt and Munich.
And on Thursday, IBM announced that it had entered into an agreement to acquire IT infrastructure and application management software developer Candle Corporation. Candle, a long-time IBM partner, says combining the companies will provide customers with a more comprehensive solution set. IBM says the acquisition will complement its middleware solutions and enhance its solutions for managing "on demand" operations.
While last week saw the bulk of the Witty worm's destructive impact, the issues of downtime and its aftermath carried over into this week, with customers voicing concerns and companies doing damage control.
On Wednesday, C I Host, one of the most prominent hosting companies to suffer serious outages at the hands of the Witty worm, announced that it had reinforced its Internet security and server backup safeguards to prepare for future attacks. The company's reaction followed customer complaints that servers had been offline for periods up to 11 days. C I Host said the service interruption was not widespread, and that the company had worked round the clock to restore services. The company said it had taken precautions against future attacks, buying additional storage systems to further back up content and speed restoration efforts.
C I Host was one of the companies featured most prominently in Karen Snider's Thursday column on recent downtime, and customers' reactions through online forums. Message boards tend to be a source for quick, if not necessarily authoritative, information in times of crisis, and C I Host's outage brought customers online seeking answers. The company responded to threads directly, reporting on restoration efforts and saying that all customer data had been saved. Web hosts also came online last week to question outages at AboveNet, attributed to router troubles, and Dot5Hosting, which may be involved in a sale.
Another ongoing issue that pushed its way into this week's news was EV1 Servers' recent decision to purchase intellectual property licenses from the SCO Group, a decision met with heated objections from the Linux community.
On Tuesday, it was reported that EV1 Servers CEO Robert Marsh had expressed regret at the licensing decision, telling IDG News Service that, given the chance, he would not make the deal again. Marsh had previously expressed remorse to theWHIR, saying he was disappointed that the Linux saw the move as putting EV1 in league with SCO. Marsh maintains that he was looking out for the interests of his customers in making the deal, attempting to protect them from being sued.
The negative impact of the deal may not have been as great as it first appeared, however. Research organization Netcraft released its April Web Server Survey on Friday, reporting that EV1's customer losses for the month of March were only slightly more than its monthly losses averaged over the last six months, and were smaller in volume than the new customers added during the same period, ultimately making March a month of positive growth for EV1.
While it was mergers and acquisitions that dominated this week's news, the ongoing danger of virus activity and the looming threat of SCO's legal campaign against Linux almost assure that those stories will continue to carry considerable weight in the coming weeks.