Qwest Taps IBM to Create New Web-Hosting Space

FRAMINGHAM (03/31/2000) - In an effort to deliver on its promises, Qwest Communications International Inc. this week signed a deal with IBM Corp. to dramatically increase the space it can make available to users in its Web-hosting data centers.

The deal will create 28 new sites to be dubbed Qwest CyberCenters, the same as the current group of Qwest Web-hosting locations now in operation or being constructed. Qwest has been touting its ability to not only transport but also host IP traffic and applications, but analysts say the carrier simply needs to build floor space faster to take on the amount of hosting business it's projecting.

Although Qwest will own the sites, IBM Global Services will build and provide operational support - for a fee of $2.5 billion payable by Qwest. In turn, IBM will then purchase hosting space back from Qwest to support its own customers' e-commerce initiatives and will become the anchor tenant in the CyberCenters it builds.

Qwest has previously struggled to keep up with demand for value-added Internet services, at one point reportedly all but running out of space in its early California Web-hosting centers. The company has seven such centers open and plans to build seven more of its own, bringing the total number of sites to 42 over the next three years.

Most of the new IBM-built sites will have at least 100,000 square feet of floor space, while some of the sites Qwest is building for itself will reach 200,000 square feet.

Qwest offers a variety of Web-hosting options under its CyberCenter program, from simple hosting with e-mail notification of problems to premium management and monitoring features. Demand for space is expected to increase further as Qwest begins to host applications services in deals it has signed with numerous software vendors, along with consulting firm KPMG.

The new centers will have a direct connection into Qwest's now-25,000-fiber-mile backbone network, offering users a choice of access speeds (see graphic).

Unlike other carriers, Qwest is not choosing sides in terms of potential Web-hosting markets. Target customers include traditional large enterprises with high-end e-commerce needs, newer dot-com companies, public electronic marketplaces and application service providers.

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