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Europes Hosting Woes Accompanied by Silver Lining
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Adam Eisner, theWHIR.com
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July 10, 2001 – Like most other Web
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hosting markets, Europe has seen its fair share of difficulties over
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the past year. Several companies have closed shop, others have been
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sold, and the WorldCom debacle is already having a negative effect on
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the marketplace.
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But while Europes hosting troubles have
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been bad news for most, it has opened up a number of opportunities for
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companies with a solid business plan and a bit of capital to spare. As
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a result, several firms have decided that now is the time to bolster
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their presence in Europe’s Web hosting market. Some appear to be
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choosing the path of acquisition, while others are focusing on organic
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growth.
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One firm that is likely to increase its
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presence soon, albeit probably a little reluctantly for reasons of
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pride, is Dutch telecommunications firm KPN. The company is reportedly
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on the verge of purchasing a significant portion of KPNQwest, a
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Pan-European carrier it helped start in 1999. KPNQwest was a joint
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venture between KPN and US telecommunications firm Qwest, and went
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through a great deal of well-publicized financial trouble before
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finally going bankrupt in May.
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While KPN would essentially be picking up
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the pieces of its own shattered venture by acquiring any KPNQwest
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assets, it also has a great deal to gain by doing so. The company would
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likely acquire a world-class network and facilities for a shockingly
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low price at a time when much of the competition appears to be fading
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quickly.
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Another European telecommunications firm
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in for a few changes in the upcoming months is Norwegian
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telecommunications firm Telenor, parent company of Nextra, a UK-based
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managed services provider.
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Founded in 1991, Nextra provides a wide
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range of services including enterprise hosting, IP VPNs and managed
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infrastructure services. According to reports, Telenor feels its brand
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is currently less than recognizable the UK despite being a leading
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European communications firm. As a result, Telnor is planning to boost
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Nextras managed infrastructure and application hosting offerings in
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the region during the next few months.
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A Nextra executive recently told
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vnunet.com that Telenor also intends to increase its recognition in the
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UK by re-branding Nextra as Telenor Business Systems as of September 2
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in order to bolster the company s brand. Vnunet also recently said
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Nextra would back its managed infrastructure services by offering a
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£1bn insurance policy against loss of business in the case of
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significant downtime, and that the company is looking at bolstering its
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ISP and IT service portfolios.
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KPN and Telenor arent the only companies
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poised for changes in Europe, however: several other firms in the
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region have bulked up operations in recent months, including Host
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Europe and its subsidiary firms, which have rolled out several
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enterprise and managed-level services recently. Meanwhile, several
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companies, including UK-based Web hosting firm Netscalibur, have
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reported increases in business as a result of KPNQwests recent
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troubles.
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Terremark, which builds carrier-neutral
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data center facilities, has expressed hope for an increase in data
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traffic through Spain, having recently agreeing to construct a NAP
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there. American firms like Chicago-based Hostway are moving full speed
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ahead, as the company opened an office in the United Kingdom earlier
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this year through a strategic acquisition; meanwhile, Rackspace Managed
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Hosting continues to experience consistent growth through its own UK
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office. And it is highly unlikely that Cable & Wireless have
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completed making acquisitions, as the company is always reportedly in
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the hunt for a good deal.
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While Europes Web hosting industry may
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be flagging, it is certainly not dead. And, like in North America, when
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the dust settles, several leaders will emerge. Contrary to what many
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may have believed even a year ago, however, the leaders will not be
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smaller, nimble companies espousing terms like first mover advantage;
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rather, they will be the larger, slower-moving corporate giants that
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have always believed that slow and steady will eventually win the race.
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About theWHIR.com
Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, interviews and resources to the hosting community. TheWHIR is an iNET Interactive property. For more information on iNET Interactive, visit http://www.inetinteractive.com
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