RealTime IT News

Digex Grabs Cargill Hosting Contract

Digex Inc. is riding high on its recent popularity, scoring a web hosting deal Wednesday with international distributor Cargill Inc.

Cargill, with more than 85,000 employees in 60 countries, needed a guaranteed secure network for its business-to-business services. It was a requirement Digex has marketed itself to provide.

Its certification in the Statements on Accounting Standards Type I (SAS70) and TruSecure Management Service Provider (MSP) gave Digex the extra step to beat out competitors for Cargill's contract.

Cargill decided the time was ripe for an e-commerce expansion of its services. While the privately-held company netted a whopping $48 billion in revenues for fiscal 2000, improvements to infrastructure would streamline its ordering, marketing and distribution efforts.

Mark Middendorf, Cargill EC infrastructure manager, said his company's burgeoning e-commerce services needed a solid, dependable home.

"As the number of our business units conducting business online continues to grow, it became increasingly clear to us that we needed to identify a hosting provider that could provide comprehensive management of our web infrastructures," Middendorf said. "With Digex, we have confidence that our sites will be available 24x7 to our customers worldwide, that they are secure, and that they can scale to meet the continuing growth of our businesses."

Last year, or even last month, the hosting company probably would not have netted a contract with a company of Cargill's caliber. While Digex had its own European office, it didn't have the worldwide clout to grab Cargill's attention.

Digex made national and international headlines earlier this month when Worldcom Inc. bought out Intermedia Communications Inc. to get its hands on the managed hosting services company. Intermedia , until Worldcom took over, controlled 55 percent of Digex stock and had a 94 percent voting stake in the company.

That's good news for Worldcom, which now takes the reins at Digex, but not so good for the public shareholders who make up the minority difference.

Future decisions are now in the hands of the telecommunications giant, which will manage the company with an eye toward its profit margin. Not a good long-term proposition for anyone with stocks tied up in Digex.

What the deal did give Digex was access to Wordcom's immense sales and marketing team, which includes markets overseas. Digex, which will in practice act as a separate company, can now spread its coverage to include most of the known world.