IBM, KPNQuest team up for European hosting

IBM and KPNQwest today announced a 10-year initiative to build a network of web hosting centres in Europe.

IBM Global Services will build, manage and provide operational support for up to 18 KPNQwest Cybercentres connected to the company's high capacity fibre-optic EuroRings network.

The first six KPNQwest Cybercentres, each measuring some 10,000 square metres, will be in Frankfurt, Paris, Munich, Stockholm, Milan and London. They will be phased in by the end of 2000. The companies predict that the centres will deliver four billion euros (£2.4bn) in revenue during the 10-year period.

IBM will lease 25 per cent of the available space in the centres to host their customers' ebusiness systems. Total investment in the centres is expected to amount to $1.9bn and revenues will be split equally between the two companies.

Typical customers are expected to include ISPs, application service providers, dotcom companies, small and medium businesses, multinationals and traditional 'bricks and mortar' companies moving to web based operations.

Hosting and ebusiness network services provided will range from managing and operating customer servers in the centres to hosting complex websites and building network-based applications for larger customers. They will also provide a full range of network services, such as managed bandwidth, internet connectivity and IP transit under strict service level agreements.

Richard Wendland, an analyst at researcher Durlacher, said the deal is "huge" even by the standards of the vast amount of money other service providers are putting into the hosting market.