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BellSouth unveils deals for Web hosting services

The local phone service provider announces plans to offer Web hosting and other services by building new data centers and signing partnerships with Qwest and Sun.

BellSouth, a major local phone service provider, today announced plans to offer Web hosting and other electronic business services by building new data centers and signing partnerships with Qwest Communications International and Sun Microsystems.

BellSouth recently opened "e-Business Centers" in Atlanta and Miami and plans to open four more data centers in the southern United States within 12 to 24 months.

The data centers, secure facilities designed to house server computers and software that is linked via the company's fiber optic network, will provide managed hosting, storage, security, content caching and distribution and application service provider (ASP) services to business customers under the label "e-Platform." Many of the services are new for BellSouth and will be installed over the next year.

Managed and hosted Internet service is a growing market and one that many communications service providers are quickly embracing as a means to fill their networks with traffic. By linking their networks with data centers to provide new advanced services, communications companies have been able to reap new revenues and stave off falling profits in their core voice businesses.

Many dot-com companies and other businesses are willing to outsource, or look to outside service for, the installation, management and maintenance of their Internet equipment, software applications and other infrastructure. Outsourcing these needs to hosting firms can save time, money and many headaches for companies that may not have much Internet expertise, according to industry analysts.

BellSouth said the initiative is expected to "add significantly" to the company's revenue. Citing market research statistics, BellSouth said the Internet services market in the southeast United States will be valued at between $4 billion and $6 billion by 2004.

"The network is the business," said Dick Anderson, president of BellSouth consumer markets. "As many applications are moving from the enterprise to the hosted model...the network is becoming the platform of choice for business."

The Baby Bell also has forged agreements with Sun and Qwest, in which BellSouth has a significant ownership.

Sun will provide hardware, software and professional services under a multiyear deal valued at about $450 million. Qwest will provide out-of-region data center space to BellSouth and will gain access to the Baby Bell's data centers.

Sun president Ed Zander said Sun will recommend BellSouth services to its customers in the southeast United States, and the two companies will co-market and jointly develop new services.