BusinessBusiness RecoveryWebhosting benefits from business recovery

Webhosting benefits from business recovery

Disaster recovery and datacentre consolidation by business customers are providing new streams of revenue for the beleaguered web hosting market - but oversupply is still a major problem, warn analysts.

Russell Poole, UK general manager of web hosting company IXEurope said despite some high profile companies exiting from the business, there is still demand from customers.

‘There was a feeling that this was quite an easy business but you need talented people and you need to understand why people want to buy the services. We are starting to see existing customers expanding,’ he said.

Poole said the financial stability of the hosting company, and its range of suppliers, is becoming more a part of the decision making criteria.

‘IT managers are starting to wonder about how many carriers do they need to be linked to before they have redundancy. There are no completely safe bets any more so the more carriers the better. We have a minimum of five carriers in each data centre so there’s always a significant amount of choice,’ Poole said.

Disaster recovery and consolidation of datecentres is a growth area, he said. ‘We are seeing a move towards corporate data centre outsourcing and business recovery. Lots of companies have four or five offices with small data centres which are little more than converted office space. Now people are asking whether that distributed infrastructure makes sense.’

Other web hosting players have fared less well, and many companies are turning away from web hosting as over-capacity drives down prices. Last month chip giant Intel said that is shutting its web hosting arm within a year. It will take a charge of around $100m to shut down its Intel Online Services arm.

And those still in the business are finding it hard. BT Ignite’s 20 data centres are running half empty, according to its chief executive Andy Green. He told a Sunday newspaper: ‘Vacancy rates at the centres are around the 50% mark. Our aim is to run the centres at a 70% to 80% rate.’

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