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British firm eyes lucrative Web hosting market

Telecommunications company Cable & Wireless throws its hat into the potentially lucrative Web hosting ring, opening the first of 20 planned data centers.

Cable & Wireless threw its hat into the potentially lucrative Web hosting ring today, opening the first of 20 planned data centers.

The Britain-based telecommunications firm is joining the U.S. market late, however, following competitors like AT&T, Global Crossing's GlobalCenter, and more focused companies like Exodus. It does have several Web hosting facilities overseas, including centers in Japan, Australia, Hong Kong, and the United Kingdom.

Web hosting facilities essentially serve as warehouses for online companies' Web sites. To reduce the risk of a power outage or other accident that could take a site offline, most big Web companies keep multiple copies of their sites on servers around the world--often using several different companies and networks as hosts. Web hosting centers have become increasingly important in light of the growth in Web-based firms, especially e-commerce companies.

The explosion of new Net companies has created a shortage of hosting space. Analysts say the demand for space is so strong that the market will thrive on the high number of companies offering services, at least in the short term. Forrester Research predicts that today's $3 billion market will grow to nearly $23 billion by 2002.

The hosting business marks a new stage in Cable & Wireless' bid to turn itself into an Internet powerhouse in the United States, in large part by using the network it bought from MCI last year.

Yet the firm's path to Internet success has been rocky. The British company sued MCI WorldCom early this year, charging that the value of the network had been undermined after the previous owner hired away key company personnel and grabbed key customers.

Since then, however, the company has boosted the network's capacity, and refocused its attention on business markets.

Cable & Wireless's first U.S. data center is opening in Reston, Virginia. The next six facilities will be spread around the world, encompassing Santa Clara, California, London, Frankfurt, Munich, Tokyo, and Sydney, the company said.