http://news.com.com/2100-1033-938311.html?tag=dd.ne.dht.nl-sty.0

Web hosting: Survival of the fittest


By Margaret Kane
Staff Writer, CNET News.com
June 21, 2002, 9:45 AM PT


This week's departure of two well-known names from the Web hosting business is the latest sign that only the strongest will survive in the rapidly consolidating market.

Interesting

Loudcloud was always a dud before and after their much hyped IPO. I don't track them anymore. Are they still listed on the NASDAQ or were they dumped??

I read that article and noticed something kind of funny.

At the beginning of the article, the writer quotes this ceo as follows:

"Antonio Salerno, CEO of Santa Clara, Calif.-based Conxion"

Then later in the article, she quotes him again, but with a slight difference:

"Onion's Salerno compares the existing Web hosting market to the car industry."

How did she go from "Conxion" to "Onion"?

According to the article, web hosting is a very capital-intensive business.

Huh?

I'd be surprised if many web hosting companies had capital costs exceeding 12 months revenue; in many cases, it's probably much lower than that. How does that qualify as capital-intensive?

When you get to the 'build a datacenter' point, I think it shifts to that. When you're leasing a few $99 servers, no.

Originally posted by Chicken
When you get to the 'build a datacenter' point, I think it shifts to that. When you're leasing a few $99 servers, no.

I'm still not convinced. Rackshack has over 5000 servers, each of which is giving them $99/month of revenue; that's half a million $/month. Add the setup and other fees, the people with more expensive servers, etc, and they're probably getting somewhere around a $1M/month of revenue. How much did that new datacenter of theirs cost?

The datacenter where we haven some equipment colocated here cost over $4 million. Interestingly, the company that built it went out of business and sold it. The company that bought it filed bankruptcy and just sold it as well, for $750,000.