Intel passes on Web hosting services
* After jumping into the Web hosting market at its height, Intel last week unceremoniously bowed out. Intel Online Services launched with two data centers in 1999, and in April of the following year Intel announced it would invest $1 billion in the business, mainly to build and equip data centers. It planned to have 12 data centers up by the end of 2000, but ended that year with eight and shelved plans for the rest.
Intel claims it will use these data centers for its internal IT operations and will retain most of the IOS employees.As for IOS customers, Intel will continue to service them during the next 12 months while it helps them transition to other hosting situations. Analysts note that while IOS didn't have the presence of competitors such as Exodus Communications, which had 44 data centers at its peak, it was consistently winning new business. Intel wouldn't discuss hosting revenue or customer numbers, but Tier 1 Research estimates IOS ended 2001 with $41 million in hosting revenue and predicted that revenue would nearly double to $80 million this year."We were successful in attracting customers, but if you look at the overall market trends and financial projections for growth and profitability, they didn't meet our requirements," says Christine Chartier, an Intel spokeswoman. Separately Loudcloud announced it was selling its managed services business to Electronic Data Systems (see www.nwfusion.com, DocFinder: 9949)