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RealTime IT News

Businesses Benefit From Host of Options

Qwest Communications International has launched a new promotion to scoop up Web hosting customers from Sprint, Level 3 and others who are phasing out the offering.

The Denver telecom today began offering two free months of its CyberCenter service -- which utilizes hosting centers in Burbank, Calif., Chicago; Denver; Sacramento, Calif.; Sterling, Va. and Tampa -- to new customers.

"We are committed to Web hosting, and in this time of industry change, we want to reassure our customers and other companies that we are a reliable and stable provider," said Eric Bozich, Qwest's vice president of national services.

The move is similar to other survivors in the space. Earlier this week, AT&T started a promotional campaign to woo new customers. In addition, Navisite, a provider of application hosting and messaging services, also recently reached out to new users.

Both pitches included two free months of co-location hosting services with a two-year contract that included a bundle of Internet connection and domain hosting services.

The vacuum has been created by two firms. In April, Level 3 said it would dump its hosting business (a holdover from its Genuity acquisition) and send customers to Computer Sciences Corp. CSC also gained data centers in Chantilly, Calif., and Cambridge, Mass., and about 125 employees.

Level 3's hosting operations were expected to generate revenues of $40 million, and a net loss of $5 million during 2003. In addition, they represent only 2 percent of the 5,000 contracts it picked up with Genuity.

And earlier this month, Sprint said it would shutter its money-losing hosting and co-location business by year's end and lay off 500 employees. The network operator said it didn't have enough customers to make the service profitable. Other smaller hosting providers simply went out of business after the dot-com crash.

Instead, Sprint will focus on Internet protcol-related offerings such as managed services and network transport on its Tier 1 IP backbone.