Qwest And IBM To Expand Hosting Services

Scrambling to keep pace with booming demand for complex Web hosting, IBM and telecom carrier Qwest Communications International Inc. today unveiled a $5 billion initiative designed to help each greatly expand its hosting operations.

Under the deal, IBM Global Services will build and provide support for 28 Qwest hosting centers over the next three years, buying 25% of the space in each facility and backbone network bandwidth from the carrier to expand the reach of its Web-hosting services.

Qwest gains by greatly expanding its hosting center effort beyond the original 14 centers due online by year's end to total of 42 facilities, all in the United States and Canada. Qwest also gets access to IBM's E-business services employees, which have helped the vendor manage more than 40,000 servers in 133 data centers worldwide. Hosting is a $1 billion business for IBM, a company spokeswoman says.

"IBM and Qwest customers will benefit because the alliance will provide them the skills and infrastructure needed for full E-business enablement," says Andy Efstathiou, program manager for E-sourcing strategies at the Yankee Group.

Although a statement from the two vendors claims the duo "plan to offer the widest spectrum of E-business services under one roof--from collocation to complex Web hosting to application service provider platforms," no details were given.

That could be confusing to customers; because both initially plan to offer Web hosting services and support from the same centers, they will compete for new customers to some extent, predicts Efstathious.

"It's a model for co-opetition," says a Qwest spokeswoman. "We have every intent of working together."

The first four IBM-built centers will be located in Dallas, Philadelphia, Sterling, Va. and in the San Jose, Calif. area and will be operational by year's end. Beyond those, IBM has plans for facilities in Atlanta, Boston, Chicago, Denver, Los Angeles, New York, Phoenix, Seattle, and Washington.