June 17, 2002 — (WEB HOST INDUSTRY REVIEW) — Global services company EDS (EDS.com) announced on Monday that it will acquire the managed hosting business of hosting service provider Loudcloud (Loudcloud.com), as well as licensing the company?s IT automation software, Opsware, allowing EDS to automate complex computing environments within its enormous IT infrastructure.
Loudcloud previously anticipated a 2002 revenue stream for its managed hosting business, which EDS acquired for $63.5 million, to be approximately $75 million. Along with Loudcloud?s managed hosting business, EDS also acquires the company?s 50 enterprise Web hosting clients.
Having sold its managed hosting business, Loudcloud intends to re-brand itself as Opsware Inc. (OpswareInc.com), focusing exclusively on its IT automation software business.
Under the terms of the licensing agreement, EDS will pay $52 million over the course of three years. The agreement, says EDS, provides the foundation for the widespread automation of service delivery and applications management in EDS?s managed Web hosting business and, later, throughout the company?s global network of 50,000 servers in 14 major data centers and 140 client-owned and regional facilities worldwide. EDS says it expects the Opsware initiative will generate over $100 million in savings over the term of the agreement.
“These agreements further strengthen EDS’ leadership position in Web hosting, a market growing at a 61 percent compound annual rate,” says Doug Frederick, executive vice president and sector executive for EDS Operations Solutions. “This already is a significant business for EDS, and we have the infrastructure in place to support it.”
EDS says it expects the deployment of Opsware will reduce cost and improve efficiencies in the data center environment by automating the complete lifecycle of managing business applications and infrastructure.
