Custom Web Service

Businesses move beyond ISPs to specialized hosts

By Gregory Dalton

ompanies outsourcing large Web sites are growing beyond their local Internet service providers and turning to specialized hosting companies that provide customized services.

Forbes Digital Media, a division of Forbes Inc. in New York, moved its Web hosting from BBN Planet two months ago because the Cambridge, Mass., ISP couldn't quickly accommodate Forbes' plans for a custom environment for its Windows NT servers, says Webmaster John Moschetto. Forbes switched to Digex Inc. in Beltsville, Md.

The market for Web hosting, including messaging and groupware, will surge from $312 million this year to $2.9 billion in 1999, according to Forrester Research Inc. in Cambridge, Mass. Nearly half will come from companies implementing complex Web sites that are beyond the capabilities of most ISPs but outside the domain of facilities management companies such as EDS. Apparently recognizing the market's potential, IBM announced in late July that it will expand its Web hosting services to small and midsize companies.

HotMail Corp., a Net-based E-mail company in Sunnyvale, Calif., started with a handful of servers located at a local ISP. "But when we got up to 25 servers, we were outgrowing them," says chief operating officer Rex Smith. "They didn't have the right infrastructure to support a megasite such as ours." HotMail turned to Exodus Communications Inc. in Santa Clara, Calif., which provides 45-Mbps connectivity and a secure cage to store HotMail's own servers.

Blue-chip companies are migrating from general-purpose to specialized ISPs, says Earl Gallagher, president of Web-site management at Digex, which hosts a site for Nike, among others.

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