Feb 6, 2004 : The webhost industry: week review

📅 February 6, 2004 - By the early part of this week, it appeared as though the worst part of the MyDoom worm's impact had passed, as the destructive virus had already launched its DDoS attack against the SCO Group, and the threat to Microsoft seemed limited. Web hosting firms and research groups spent much of this week assessing and reporting on the damage, with some speculating on what may be yet to come.
On Monday, the mi2g Intelligence Unit reported that damage from the worm had reached $38.5 billion, placing MyDoom as the worst malware in history. The organization said the threat appeared to have reduced, with only 10 of 50 top Web hosting and Internet providers showing signs of abnormal delays. The virus launched its scheduled Super Bowl Sunday attack on the SCO Group. The company moved its site temporarily to another address.
The second variant of the virus, designed to launch a similar attack against Microsoft was not expected to have quite the impact of the original, as the MyDoom.B variant only accounted for about 10 percent of the MyDoom infections worldwide.
On Tuesday, the day scheduled for the Microsoft attack, reports indicated that the virus had shown no visible impact on the performance of the software giant's Web site. The company had prepared for the attack by making an alternative site available, and shortening the time to live on the microsoft.com DNS entry.
Thursday, mi2g reported that total damages from the MyDoom virus, now considered the fastest-spreading and most destructive malware in history, had caused $43.9 billion in economic damage in 215 countries. The most economic damage took place in the US, UK and France, said the company, with the virus's total impact in the US reaching between $12.2 billion and $15 billion. More was expected, however as the backdoors left open by the MyDoom virus leave machines vulnerable to the launch of further attacks. Mi2g also warned that the MyDoom virus might be imitated by hackers looking to launch distributed denial of service attacks against other Web sites.
While many Web hosting firms spent much of this week on the damage wrought by the virus, some had their attention on other things entirely. A number of Web hosting companies and related providers made big announcements this week, particularly with regard to acquisitions or sales.
On Wednesday, data center service provider Collocation Solutions announced that it had acquired managed network solutions provider COMDEPOT. Collocation Solutions said it had made the investment in response to the requirement of corporate clients and to leverage the network presence within its data centers. COMDEPOT founders Don Purner and Steve Fahle will continue to head the unit.
Also on Wednesday, Hewlett-Packard announced that it would pay $6.10 per share in cash to acquire Novadigm, a developer of management and automation software for service providers. HP said the acquisition was intended to help the company expand management software products. The acquisition reportedly involved 19.1 million outstanding shares. HP already owned five percent of Novadigm's shares. HP said it also planned to acquire technology automation and management software company Consera.
On Thursday, Redundant Networks said that it had scaled back its operations in Raleigh, North Carolina and Reno, Nevada, trimming a staff of 24 to just four workers, according to reports. The cuts were made to reduce burn rate and position the company for acquisition. The company said it is currently speaking to several interested parties, and that it would consider selling the two operations either independently or together.
Also on Thursday, Taconic Partners said it would sell 111 Eighth Avenue, a Manhattan carrier hotel, to German investment firm Jamestown for $775 million. The 2.8 million square foot facility, located between 8th and 9th Avenues and 15th and 16th Streets in Manhattan, is reportedly the third-largest building in New York City.
By the end of this week, the worst of the MyDoom worm threat had passed, and the Web hosting business turned its attention to the lingering effects. While the threat might have passed, the focus on the virus will likely continue, with speculation rising as to the source of the worm and concern about its lasing effect on infected machines and the possibility of a copycat.