Though dot-coms continue to fall by the wayside, there continues to be a huge market to host Web sites for successful Web ventures and other brick-and-mortar companies looking to expand their Web presence. And both Sprint and WorldCom, beset by falling prices in their core business of long-distance, want a piece of the action at the Internet World industry trade show this week in Los Angeles.
WorldCom announced it has incorporated Digex, the Web hosting company with which it has gained 55 percent ownership, into its own set of Internet holdings. The packages include all equipment, software and installation, and can be up and running in 10-15 days.
"They've recognized a trend we've seen of (selling complete) offerings instead of providing them a la carte," said The Yankee Group analyst Courtney Quinn.
WorldCom hopes its all-in-one approach can help it gain market share against leader Exodus Communications.
"It's designed to demystify the purchasing process," said Ron McMurtrie, WorldCom vice president for E-Services.
The Web hosting companies provide a variety of services to clients that want to outsource the operation of their Web sites. For example, Yahoo has chosen Exodus to host a large portion of its Web operations so it does not have to manage its Web operations itself.
Separately, Sprint and Sun Microsystems announced they would do reciprocal marketing and install Sun's equipment in Sprint's data centers.
The deal will mean that in Sprint's new centers "Sun equipment will be baked in," said IDC analyst Melanie Posey.
"Sprint is definitely looking to raise their profile in the Web-hosting space," Posey said, and while the Sun deal reflected that, she questioned how many Sun salespeople were going to refer customers to Sprint. "I'm not sure it will really be a big sales generator."
The managed Web hosting market has already seen rapid growth, and IDC predicts it will rise from $4 billion in 2001 to $17.2 billion in 2004. Forrester Research has predicted an even higher figure of $20 billion for the same period.
"The market will level out as more and more people enter it," Quinn said.