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Loudcloud: The Next Netscape?

Marc Andreessen, the man who co-founded Netscape and then brought it to its history-making IPO, is seeking to bring another company public. His latest baby, Loudcloud Inc., a provider of Internet infrastructure services, filed plans with the Securities and Exchange Commission Tuesday for an IPO of up to $150 million of common stock.

Goldman, Sachs & Co. and Morgan Stanley Dean Witter are the joint lead managing underwriters of the proposed offering. The company is seeking a listing on the NASDAQ exchange under the symbol LDCL.

Andreessen, who also served as chief technology officer of America Online Inc. from February 1999 to September 1999, is the company's chairman and currently holds an 18.2 percent stake in the company. Benjamin Horowitz, previously a vice president with Netscape and also with America Online, is Loudcloud's president and chief executive officer. He currently holds an 8.8 percent stake in the company.

Loudcloud is all about proclaiming the power of outsourcing. Formed in September 1999, the company offers Web hosting and Web site monitoring services to help companies deploy, maintain and scale their Internet operations, freeing its clients to concentrate on growing their businesses and developing software. Loudcloud's outsourcing services include the use of Web servers, e-commerce software, communications equipment and network capacity, all on a monthly basis. However, it doesn't own any data centers or physical networks. Instead it leases them from telecoms and other hosting companies and focuses its attention on software infrastructure.

Last week, the company previewed additional services, including Instant ASP and Global Connect. Instant ASP is a set of infrastructure services designed specifically for ASPs. It includes ASP operational services, which provides application functionality like configuration, management, billing, customer management and log management. It also includes a new scaling technology called Rapid restore which lets Loudcloud instantly tap into a pool of stand-by servers to replace a failed machine in a live environment. Global Connect includes global load balancing.

Loudcloud faces some tough challenges. The infrastructure services market is young but there is already some stiff competition, including some of the hosting and infrastructure companies from which Loudcloud leases its data centers and networks. But Andreessen has said that the increasing complexity of the network software business means that specialization is inevitable and it makes little sense for hosting companies or telecoms in the physical hosting business to try to maintain a hold on the network software business.