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May 16, 2008 -- (WEB HOST INDUSTRY REVIEW) -- The discussion of this week's most significant news would probably do best to start with the multi-billion dollar acquisition, as this week HP announced that it would be acquiring EDS.
On Tuesday, shortly after the rumors began circulating, it was reported on Tuesday that HP had agreed to pay $12.6 billion for EDS, doubling the size of its IT services business and creating a strong challenger to IBM in the large and growing IT services space.
Following shortly after the EDS acquisition came reports that British Telecom was in talks to sell its British data centers to HP for approximately $2.9 billion. The deal would see approximately 24 data centers in the UK change hands, along with 400 employees. BT would continue to use the facilities under a ten-year deal. The arrangement would continue past deals, in which BT has supported HP's data network, while HP handled BT's IT infrastructure.
And on Thursday, a new development was reported in one of the most complex recent acquisition stories, as billionaire investor Carl Icahn sought to take over Yahoo!'s board of directors in an effort to reopen buyout talks with Microsoft. In his letter, Icahn said he had acquired 59 million Yahoo! Shares and sought clearance from the US Federal Trade Commission to acquire up to $2.5 billion in Yahoo! Stock.
Along with all the large-scale acquisition news came news of several very significant leadership shifts at businesses of major significance to the hosting market.
On Monday, it was reported that the world's largest networking hardware firm, Cisco, had seen its data center division head leaving after 15 years with the company. Jayshree Ullal said in a post to the company's blog that she would be departing. She didn't say what she will be doing next. She will be replaced in the position by one of her deputies, John McCool, who is vice president of the Internet systems business unit.
And on Thursday, 1&1 Internet, the biggest web host in Europe and one of the biggest in the world, reported that it chairman and CEO Andreas Gauger had stepped down from his position, and that it had appointed Oliver Mauss to replace him. Mauss formerly worked at Vodafone, most recently as global director of business product marketing.
Also this week, several hosting providers reported plans to begin delivering content delivery network services, where previously they had not.
On Monday, fast-growing dedicated server company SoftLayer reported that it had launched a CDN service it is calling CDNLayer. The service will optimize the delivery of content using geographically distributed nodes. SoftLayer calls the offering a valuable extension of the company's services that will help it cope with customer demand.
On a larger scale, AT&T announced this week that it has been building out its own content delivery network infrastructure, and intends to launch the product in the third quarter of 2008. The company says it expects to spend between $70 million and $80 million by the end of the year to bring 400 GBps of capacity online for its CDN services.
While the HP acquisition of EDS was certainly this week's biggest news, the story to follow in the coming weeks is certainly Carl Icahn's takeover bid for Yahoo! The company has already fired back, with Friday reports of an open letter from Yahoo! chairman Roy Bostock in response to Icahn's own letter.
