Cable and Wireless is preparing to enter the applications hosting market by adding 100,000 square feet of server farms in the UK over the next few months.
The telecommunications company already offers Web site and email hosting services but intends to branch out into hosting ecommerce sites and software applications such as Siebel in the UK early next year on a rental basis.
In the US, C&W owns the MCI Internet backbone that allows it to host server farms for such companies as Coca-Cola, Gap and the US Meteorological Office.
"We are replicating the infrastructure in the UK," said Lance Spenser, managing director of IP and customers solutions at Cable and Wireless Communications. "We are extending globally into Europe, by both building and acquiring piping and ISPs."
One of the key reasons that C&W bought Internet Network Services last week was because of its penetration into the Web and ecommerce hosting market, he said.
C&W's server farms capacity, Spenser said, "Will be significantly increased in the next two or three months. We will be adding 100,000 square feet, with battery backup and full security."
The target market will be the small and medium customer. C&W is talking to all the application vendors but has not decided what services will be offered.
Difficulties remain about the suitability of large ERP applications for small and medium customers, Spenser acknowledged, but he said he expects that market leaders such as Oracle and SAP would be persuaded to scale their large scale products down and "bring out versions tailored to SAP".
INS, the UK's largest independent ISP, has 1,500 customers and 150 workers, with a concentration of skills in IP. Details of the purchase were not disclosed. INS had its own server farm, but C&W reported that demand was outstripping supply.
Rival ISPs said they had expected INS to be snapped up by the cable operator NTL.
Ironically, C&W has also been the subject of takeover speculation, with Deutsche Telekom and France Telecom in the frame as possible suitors.
For more stories see this week's issue of PC Week UK
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