The End of the Tunnel

For the past couple of years, it was easy for our DealWire feature to keep up with press releases about customer wins and growth. There weren't very many. This week offered a fresh example of how that's changed. Equinix announced hosting/colo deals with two major users, Clearing Corporation and Akamai. The Planet announced sales of 1,500 dedicated servers in December, a new one-month record. LayerOne said that Cable & Wireless has placed POPs in its data centers, while Texas.net said it signed two new disaster recovery clients and Peak 10 touted its customer retention performance.

The best-known collapses are close to being mopped up. The sale of Cable & Wireless' hosting operation to SAVVIS is scheduled to close by Feb. 13. WorldCom is scheduled to emerge from Chapter 11 bankruptcy before the end of February. That should help temper the "headline risk" that has made end-users wary about the stability of data center service providers.

That doesn't mean everything is peachy. The lower end of the hosting business is being seriously commoditized, with multiple providers offering shared hosting at $5 a month, dedicated servers at $49 a month and domains for $5 a year. That kind of pricing has a habit of working its way up the value chain. While consolidation continues, new players are still entering the market. One of them is Europe's largest hosting company, Germany's 1&1 Internet, which just ended a three-month promotion in which it gave away 200,000 full-featured hosting accounts. How do you compete with that?

Yes, challenges remain. You know the old cliche about the light at the end of the tunnel? For several years now, the default position in our industry was to assume that it was a train. I understand that reflex. But many of our industry's survival stories are now seguing into success stories. Remember that sometimes the light is really the end of the tunnel.

Akamai Expands Network With Equinix

FOSTER CITY, CA - Equinix, Inc., the leading provider of network-neutral data centers and Internet exchange services, today announced that Akamai Technologies, Inc. has teamed with Equinix to expand its content and applications delivery platform in the U.S. and Asia. Akamai operates the world's largest, globally-distributed computing platform, making the Internet predictable, scalable, and secure for conducting profitable e-business. Read the full release ...

Two New DR Clients for Texas.net

AUSTIN, Texas -- Texas.Net today announced that it will provide disaster recovery services to direct marketing firm QuantumMail.com and Houston's EC Outlook, a value-chain automation supplier to Global 1000 companies around the world. The two new customers chose Texas.Net based on its comprehensive disaster recovery capabilities, long-standing reputation for reliability and steadfast customer support. Read the full press release ...

Clearing Corp. Relocates to Equinix

FOSTER CITY, Calif.-- Equinix, Inc. the leading provider of network-neutral data centers and Internet exchange services, today announced that The Clearing Corporation ("CCorp") has relocated its data center from its downtown Chicago headquarters to Equinix's Chicago Internet Business Exchange center. In doing so, The Clearing Corporation seeks to benefit from Equinix's state-of-the-art IBX center, which is highly secure, hardened, and provides connectivity to multiple telecommunications vendors. These attributes addressed the key requirement that guided The Clearing Corporation's selection of Equinix -- the operational integrity of CCorp's 24x7 data center. Read the full release ...

Globix to Redeem $40M of Notes

Globix Corporation, a leading provider of managed Internet applications and infrastructure services, today announced it has commenced a tender offer for up to $40,274,000 in principal amount of its 11% Senior Notes due 2008. Under the terms of the offer, Globix will purchase outstanding Notes for cash at par plus accrued interest. This offer will be funded with a portion of the net proceeds from the sale of its property located at 415 Greenwich Street in New York, New York which closed on January 22, 2004. Read the full release ...

NYI Buys Level 3 Data Center

New York Internet has taken over a Level 3 data center in Manhattan, and will market the space as a disaster recovery center, the company said.

Level 3 invested $20 million to fit out the facility, located on the top floor of 100 William Street.

"We are marketing this space as a local disaster recovery facility for New York City businesses that traditionally either maintained their servers in house, or at far-off sites that are difficult to manage," said Erik Koblence, President of New York Internet.

"After 9/11/01 and, more recently, (the blackout of) August 14, everyone is only looking into a high-end product in terms of colocation," says Phillip Koblence, NYI's Vice President of Operations. "We feel that this acquisition of a data center that maintained service on both 9/11/01 and 8/14/03, will allow us to take advantage of the infrastructure of the NYC Financial District while maintaining a mission critical and secure data center facility where clients from all over the world can be assured of their applications integrity and uptime."

New York Internet is a providere of colocation and dedicated servers, NYI posted the top reliability performance of any hosting provider in November, and was also in the top four for December, according to monthly performance monitoring by Netcraft.

SAVVIS wins C&W Auction

SAVVIS Communications was the winning bidder in a two-day auction for the U.S. hosting assets of Cable & Wireless, with a bid of $155 million.

SAVVIS outbid six other parties in the court-sponsored auction, including Gores Technology Group, which had agreed to purchase the C&W assets for $125 million as part of a prepackaged Chapter 11 filing. In addition to the $155 purchase price, SAVVIS will assume liabilities of about $12.4 million. Addiitonal details of the winning bid will be reviewed in a bankruptcy court hearing Friday morning.

Bankruptcy rules require competitive bidding for major assets, and SAVVIS was among six suitors submitting bids exceeding the value of the Gores deal. According to court documents, the bidders included SAVVIS, Gores and investment entities formed by Cerberus Capital Management, Du Pont Fabros, Leucadia National, Platinum Equity LLC, and One Equity Partners.

XO Communications said last week that it had submitted a bid for the C&W assets. In a court filing Thursday, Gores said XO itself did not submit a bid, but was listed as a "permitted assignee" by several bidders.

SAVVIS Communications is a managed services provider that delivers IP virtual private networks, hosting, and application services to businesses. SAVVIS said shareholders Welsh, Carson, Anderson & Stowe and Constellation Ventures will fund the purchase price and provide ongoing funding.

SAVVIS also said it plans to sell oits rights to acquire five C&W data center to Du Pont Fabros for $52 million, and then lease back space within those data centers for 15 years.

"We are extremely excited about joining Cable & Wireless America’s internet and complex hosting capabilities to our leading private network and hosting business, and we look forward to bringing new levels of service and quality to the combined customer base," said SAVVIS chairman and chief executive officer Rob McCormick. "The companies’ network and hosting operations are extremely complementary with one another and with the SAVVIS vision to provide the industry’s first truly virtualized managed services infrastructure."

"Both CWA and SAVVIS are excited about this acquisition and are committed to growing the combined business," said John Dubel, CWA's chief executive officer. "Fulfilling the needs of our customers remains our number one objective. The conclusion of the auction represents a very positive outcome for our customers as well as for our creditors.

"Our products and market position are strong, our technology is leading edge, and our commitment to providing outstanding customer service is firm," Dubel added. "We look forward to completing the sale transaction."

C&W announced its intention to exit the US hosting market back in June, and has since closed eight US data centers and reduced staffing by 1,000 workers. The company's US unit, Cable & Wireless America (CWA), filed for Chapter 11 protection Dec. 8 as part of an agreement to sell the hosting unit to Gores.

Gores will receive a total of $4 million in fees fot its efforts, and up to $1 million to cover expenses related to its puchase agreement.

NaviSite Sets Stock Sale

Managed hosting provider NaviSite, Inc. plans to sell up to 9.2 million shares of common stock, the company said today. The offering will include 7.3 million newly issued shares and 700,000 shares to be sold by existing stockholders, according to NaviSite, which will also make up to 1.2 million shares available for overallotments.

At the current share price of $6.24 a share, the offering could raise between $50 million and $60 million for the provider, which is based in Andover, Mass.

The lead underwriter of the offering is Thomas Weisel Partners LLC, with other underwriters including CIBC World Markets Corp. and SG Cowen Securities Corporation.

NaviSite is the primary operating unit of the US hosting assets controlled by Unicorn Holdings, whose principals founded Global Switch. In the past 18 months, the company has acquired hosting assets of COLO.COM, Applied Theory, NaviSite, Avasta, Conxion and Interliant.

In November, the company announced that the New York State Department of Labor is adding $52 million to its existing contract with NaviSite's ClearBlue Technologies Management unit.

SBC Colocates With FiberNet

FiberNet Telecom Group, Inc., a leading provider of metropolitan connectivity, announced today it has signed an agreement with SBC Telecom, Inc., a wholly owned subsidiary of SBC Communications Inc., for colocation within the 60 Hudson Street Meet-Me-Room and interconnection of transport services throughout New York City. The agreement initially requires FiberNet to interconnect its network with SBC Telecom, Inc. through both optical and electrical entrance facilities. Read the full release ...

NTT Selects Opsware Hosting Software

Opsware Inc., the leading provider of data center automation and utility computing software, today announced a multi-million dollar licensing agreement with NTT Communications, one of the world's largest telecommunications companies and a subsidiary of Tokyo-based NTT Corporation . NTT Com, providing services in more than 50 countries and territories worldwide, has selected Opsware's data center automation software to automate its hosting businesses across North America, Europe and Japan. Read the full release ...

Another Deal for Switch and Data

Switch and Data today has acquired Philadelphia-based colocation provider MeridianTelesis, the two companies said today.

The deal provides Switch and Data with more than 30 new customers as well as MeridianTelesis' 20,000 square foot facility in the Port of Technology Building on Market Street. Switch and Data already operates a data center at the 401 North Broad carrier hotel in Philadelphia.

The deal continues Switch and Data's pattern of growth through acquisition. Last March the Tampa-based provider Internet exchange operator bought PAIX from AboveNet for $40 million in a Chapter 11 deal.

It also continues the consolidation of colo space in the Northeast, following on the heels of FiberNet's purchase of Gateway Colocation. Both deals saw providers with larger networks buy regional providers that retrenched after expansion efforts.

"We believe this acquisition is going to be a great asset for Switch and Data," said Patricia Higgins, President and Chief Executive Officer, Switch and Data. "MeridianTelesis has a similar business philosophy, strong commitment to customer service and a broad customer base, which blends well with Switch and Data's strategy to expand its client base and enhance its service offerings in the enterprise sector."

"We are pleased with this acquisition," said Greg Peters, President and Chief Executive Officer, Internap Network Services Corporation. "We have had a relationship with Switch and Data and their management team for several years, and we're confident they will continue to provide the quality of support we require."

"Switch and Data is a profitable and financially stable company, poised to continue providing the superior level of service our customers are accustomed to receiving,"" stated David Taffet, President of MeridianTelesis.

Taffet, a former lawyer and investment banker, founded the company in 1998, focusing on the Philadelphia market. In 2002, MeridianTelesis saw an opportunity to expand Broadwing announced that it would consolidate its data center network. MeridianTelesis took over Broadwing data centers in New York, Dallas and Santa Clara, Calif in an arrangement that let Broadwing keep its network equipment at the facilities, while MeridianTelesis managed the colo operation.

By early 2003, following the loss of a single large customer, the agreement was discontinued and MeridianTelesis once again had a single facility.

Switch and Data provides neutral interconnection and colocation services to network centric enterprises and service providers.

Weatherbug Moves to Equinix

Equinix, Inc. and AWS Convergence Technologies, Inc. today announced that AWS has selected Equinix's Washington, D.C. area Internet Business Exchange center as the new location for the company's information technology and Internet operations infrastructure. AWS will utilize Equinix's premium, secure and high-availability data center environment, the abundance of network service providers in the center, and Equinix's exchange services to enhance the performance and reduce the operating costs of the company's content and IT infrastructure. Read the full release ...

XO to Court: Set Aside Gores Bid

The bidding for Cable & Wireless' US hosting arm heated up Friday as X0 Communications asked the bankruptcy court to disqualify the current lead bid from Gores Technology Group, saying Gores had tampered with XO's efforts to prepare a competing bid. Late Friday XO confirmed that it had joined the bidding.

With hours left before the 5 p.m. bidding deadline, XO said it learned Tuesday that Gores had hired away the XO executive directing a planned joint bid with One Equity Partners, the private equity arm of Chicago's Bank One Corp.

Gores said the motion was "nothing more than thinly-veiled attempt to disrupt the bidding process," and amounted to gamesmanship by XO chairman Carl Icahn.

XO said Executive Vice President Brian Oliver left the company Tuesday to take a position with Gores, and that its ability to compete in the auction "has been compromised by Gores's misconduct."

"At this critical stage of the auction and sale process, XO is without its key officer who had guided XO's acquisition efforts and negotiations with (One Equity Partners)," XO said in its filing. "XO believes that Mr. Oliver has shared with Gores information regarding XO's strategy and negotiations between XO and OEP concerning a bid."

Gores contested XO's version of events, saying Oliver left with the blessings of XO management. Oliver "told XO's CEO Carl J. Grivner of his opportunity to join GTG," Gores said. "Mr. Oliver offered to refrain from joining GTG until after the bidding process for the Cable & Wireless assets had been completed. Mr. Grivner gave Mr. Oliver his blessing to join GTG immediately.

"We have had no discussions with Mr. Oliver about XO's strategy relating to Cable & Wireless," Gores added. "Our discussions were purely on an operational level. This is a classic Carl Icahn tactic."

Cable & Wireless America (CWA) filed for Chapter 11 protection Dec. 8 as part of an agreement to sell the hosting unit to Gores for $125 million.

Qwest and Koch Data Centers LLC have sought an extension until Tuesday to review documents and submit bids.

Media reports have mentioned interest from other suitors, including Level 3 Communications, WilTel Communications, Oaktree Capital Management and Cerberus Capital Management.

151 Front Street Sold

Northam Realty Advisors has bought Toronto's primary carrier hotel building, 151 Front Street, from Trizec Properties for $59 million ($76.3 million Canadian), the two companies said today.

151 Front Street is an eight-story, 272,000-square foot carrier hotel and data center facility, housing more than 150 telecommunication company tenants. Built in 1954 and operated as a mixed-use facility for many years, it was purchased by TrizecHahn Corporation in 1997 and then redeveloped. The adjacent 39,000-square-foot Skywalk retail concourse also was included in the transaction announced today.

The sale continued an effort by Trizec to refine its focus to office properties, an effort begun when the company restructured as a real estate investment trust in 2002. During the past year, Trizec has exited several markets where it had owned single office property assets, including Detroit, Memphis, West Palm Beach and the Los Angeles Airport submarket.

Northam Realty Advisors Limited is a Toronto based commercial real estate investment advisor, managing several pools of German and Canadian institutional and private capital. Northam's portfolio exceeds 7 million square feet of commercial space, valued at more than $1 billion.

Trizec Properties, Inc., a real estate investment trust (REIT) headquartered in Chicago, is one of North America's largest owners and operators of commercial office properties. It owns or manages a portfolio of 64 office properties totaling approximately 43 million square feet concentrated in the metropolitan areas of seven major U.S. cities.

Qwest, Koch Mull C&W Bids

Qwest and Koch Data Centers LLC are in talks with Cable & Wireless about buying its U.S. hosting assets, but say they haven't been given enough info to prepare offers by the bid deadline at 5 p.m. tomorrow (Jan. 16). The two companies have sought an extension until Tuesday to submit bids, according to bankruptcy court documents filed today.

Both Qwest and Koch claimed that they had difficulty obtaining information about C&W's hosting customers, and need the additional time to prepare bids. A court-sponsored auction is scheduled for Wednesday.

Cable & Wireless America (CWA) filed for Chapter 11 protection Dec. 8 as part of an agreement to sell the hosting unit to Gores Technology Group for $125 million. Media reports have mentioned interest from other suitors, including Level 3 Communications, WilTel Communications, Oaktree Capital Management and Cerberus Capital Management.

The court papers filed by Qwest and Koch refer to "a number of other bidders" analyzing the Cable & Wireless assets, which include 15 data centers and more than 1,000 customers. Qualified bids must exceed the $125 million offer from Gores, which will then be able to raise its bid during the auction.

Qwest and Koch each want to be given until 5 pm on Tuesday (Jan. 20) to submit bids and participate in Wednesday's auction. The judge will consider the request in a teleconference set for 12:30 pm Friday.

CWA's hosting assets comes barely a year after it closed eight CyberCenter hosting facilities, which averaged 50,000 square feet apiece. At one time Qwest planned to build as many as 42 CyberCenters, funded partly by a $5 billion strategic alliance with IBM.

Qwest's filing suggests it is interested primarily in CWA's customers, which it would then transfer to its own network facilities.

Little information about Koch Data Centers, LLC was included in its court documents. Affiliates of Koch Industries, Inc. , a conglomerate based in Wichita, Kansas, have been actively evaluating data center deals for some time, and last year invested in Collocation Solutions, a Dallas provider of colocation and managed services.

C&W announced its intention to exit the US hosting market back in June, and has since closed eight US data centers and reduced staffing by 1,000 workers.

$22M Deal for Infocrossing

LEONIA, N.J. -- Infocrossing, Inc., a provider of strategic IT and business process outsourcing solutions, announced today the signing of a new, sixty-five month outsourcing agreement with a global media conglomerate headquartered in the United States. Under the terms of the agreement, Infocrossing will immediately assume management of the client's mainframe data center operations, and migrate the environment to Infocrossing's existing infrastructure. The award is valued at more than $22 million over the contract term of approximately five years, and is expected to begin billing in February of this year. Read the full press release ...

Vericenter Closes Sprint Deal

Managed hosting provider VeriCenter Inc. has confirmed its purchase of parts of Sprint’s hosting business, including data centers in Boston, Atlanta, Dallas and Denver, and customers from Sprint's DellHost and E|Solutions operations.

The deal, which has been in the works since October, gives Houston-based Vericenter more than $45 million in revenue, profitable operations and a national footprint. It also adds to its existing customer base of more than 400 businesses.

"The transaction catapults VeriCenter from a regional to a national player, positioning them in the top tier of managed hosting providers," said Andrew Schroepfer, president of telecom research firm Tier1 Research. "It elevates VeriCenter’s critical mass of enterprise and government customers and its growing portfolio of services."

"This acquisition is a significant move for VeriCenter," said CEO Gray Hall. "The market for outsourcing enterprise applications is growing rapidly and the managed services industry is still quite fragmented. This transaction strengthens VeriCenter’s core business of delivering enterprise-class managed hosting solutions and establishes our critical mass within a consolidating industry."

The deal also includes a marketing agreement under which VeriCenter can provide services to Sprint customers as a preferred managed hosting partner.

VeriCenter has also raised $10 million in additional venture capital funding, led by Sage Venture Partners.

Between the Vericenter deal and the sale of the Santa Clara data center and customers to Equinix, Sprint now has just three data centers remaining, in New York, Los Angeles and Sacramento, Calif. Tier 1's Schroepfer estimates that about $10 million of Sprint's hosting revenue remains in the available data centers.

Three-way Denver Merger Unveiled

Denver data center operator Data393 will merge with neighboring hosting firms Ventures Online and Huge Hosting in a deal that will fill Data393's facility with more than 10,000 customers.

The deal between Data393 and reseller specialist Ventures Online was first reported back on Dec. 3.

Data393 founding CEO Lee Woodward will serve as chief executive for the new company, which will combine the support staffs and back-office systems to create a more financially sound service provider.

"Both Huge Hosting and Ventures Online were considering moving their hosting operations to Data393's facilities," said Huge Hosting president Alex Burney. "But then we saw a unique opportunity to create a comprehensive, technically superior services provider that gives customers the stability and personal focus of a locally owned company."

"All three companies have already established their ability to compete with and outperform the industry giants out there," Burney said. "As a single company we're giving Colorado a new telecommunications company it can be proud of."

"Data393's facilitates are as good as any Web hosting business and its customers could want or need," said John Burns, CEO of Ventures Online. "We get excellent fiber connections from eight Tier-1 Internet service providers, enabling us to deliver our customers' web content at maximum speed. This new company is in a tremendous position to host even the most complex, data-rich web sites with complete reliability, security and responsiveness."

Data393 launched last year, operating out of a former COLO.COM facility in the Inverness Business Park in Englewood, a suburb of Denver. Woodward bought the building housing Data393 in 1993 and later leased it to COLO.COM, which invested $8.5 million in finishing the site as a raised-floor data center. COLO.COM filed for Chapter 11 bankruptcy protection in May, 2001 and returned the space to Woodward's company.

Formed in September 1997, Ventures Online evolved from a web business to a full-service advanced hosting company.

Huge Hosting was launched in 2001 by three former executives of ICC, Alex Burney, Bill Heuston and Blake Skinner. Later that year the company acquired the shared hosting business of Verado, adding 7,000 customers.

Data393 is located at 393 Inverness Parkway in Englewood, Colorado.

Public Offering for InterNap

Network services provider Internap hopes to sell more than 52 million shares of common stock in an upcoming public offering, the company said Tuesday. At its current stock price, that would raise approximately $135 million for the Atlanta-based company, which specializes in managed Internet connectivity services.

Internap filed a registration statement with the Securities and Exchange Commission to sell 45.6 million shares, which will include 35 million newly-issues shares and 10.6 million shares being sold by existing stakeholders. Internap will also offer the underwriters the option to buy another 6.8 million shares to cover over-allotments.

The offering will be made through an underwriting syndicate led by SG Cowen and including CIBC World Markets, Thomas Weisel Partners LLC, Jefferies & Company, Inc. and Needham & Company, Inc.

Internap currently serves more than 1,500 Fortune 500 and mid-tier business customers in the financial services; travel/hospitality; manufacturing; media/entertainment; technology and retail industries.

60 Hudson Meet-Me Approaches Sellout

FiberNet Telecom Group, Inc. , a leading provider of metropolitan connectivity, announced today that Phase I of the colocation area of the 60 Hudson Street Meet-Me Room is approximately 90% sold out. The Company's customer base of leading international and domestic carriers utilizes this key communications interconnection facility to house their networking equipment and to exchange global voice and data traffic over their networks. Read the full press release ...

Rackspace Names New CFO

Rackspace Managed Hosting today announced that it has named Gary Kofnovec as its chief financial officer. Kofnovec has more than 25 years of senior financial management experience including leadership in initial public offerings and negotiating large credit facilities. In his new role at Rackspace, Kofnovec will be responsible for the company’s fiscal function and performance, treasury management, capital structure and investor relations. Read the full press release ...

Texas.Net Signs 30 New Customers

Texas.Net has added 30 new clients to its South Internet Data Center over the past six months. The newest clients in Texas.Net's rapidly expanding corporate customer base demonstrate the value of Texas.Net's central Texas location to customers throughout the United States and Mexico. Of the 30 clients, more than one-third are based outside of Austin, and five are from outside of Texas, including a customer from Col. Polanco, Mexico. Read the full press release ...

Server Central Expands With Equinix

Server Central, a national provider of managed hosting, colocation and bandwidth wholesaling, and Equinix, Inc., the leading provider of network-neutral data centers and Internet exchange services, today announced that Server Central has signed an expanded, multi-year agreement to host its operations at Equinix. The agreement doubles Server Central's current deployments within Equinix's Chicago, Washington, D.C. area, and San Jose Internet Business Exchange centers. Read the full press release ...

New Bidders for C&W?

Will Gores Technology wind up owning the Cable & Wireless America (CWA) hosting assets? Or will other suitors emerge and bid up the price in a bankruptcy court auction set for next Tuesday? A Reuters report says that as many as four other companies are contemplating bids for C&W's hosting unit, which includes 15 data centers and more than 1,000 customers.

On Dec. 8 Gores and Cable & Wireless announced a deal in which an affiliate of Gores would acquire the assets of CWA for $125 million, with $50 million in cash and the remaining $75 million in a note from Gores. CWA filed for Chapter 11 bankruptcy protection to conduct the sale under bankruptcy rules, which gives debtors the option of rejecting costly leases.

The companies mulling bids are reported to include Oaktree Capital Management, Cerberus Capital Management, WilTel Communications and Level 3. We'll see if the opportunity to streamline the asset transfers through Chapter 11 encourages buyers to step up and top Gores' bid.

In any major bankruptcy asset sale, finding a lead bidder - known as a "stalking horse" in the bankruptcy trade - is critical. It reassures creditors that the asset will be sold, and establishes a ballpark for other bidders to use in a cost/benefit evaluation of a bid. The Gores deal and court-sponsored auction present suitors who previously passed on a CWA bid with an opportunity to reconsider the assets under Chapter 11 rules.

One way or another, we'll know more soon about whether Level 3 is serious about acquiring distressed telecom assets. The structuring of the sale as a prepackaged bankruptcy is similar to Level 3's deal to buy Genuity last year. Bids are due by Friday.

Access IT Acquires Core Technologies

Access Integrated Technologies, Inc. today announced that it has completed the planned acquisition of privately held Core Technology Services, Inc. The purchase price included $250,000 in cash and 100,000 shares of AccessIT's Class A restricted common stock.

Read the full release ...

Fast Search Selects Internap

Internap Network Services Corporation, a leading provider of performance-based routing services over the Internet, announced today that Fast Search & Transfer, the leading developer of enterprise web search and real-time alerting technologies, has selected Internap to support its enterprise search business in North America. Internap is delivering FAST a complete solution of managed IP, security and colocation services. Read the full release ...

ServePath Expands in Bay Area

Dedicated server specialist ServePath has expanded into 17,000 square feet of new facilities at Telecom Center San Francisco, a carrier hotel operated by JMA Wired.

ServePath is moving into a data center that was completed by MCI/WorldCom in 2000 but never occupied. The facility in JMA's building at 360 Spear Street includes 3,000 square feet of office space and 14,000 square feet of raised-floor technical space.

ServePath maintains a second San Francisco data center at the Townsend Telecom Center at 650 Townsend Street, which it opened in the fall of 2002. It is among the providers taking advantage of the "dot-com hangover" that left finished facilities available for acquisition at less than their construction cost.

The company's expansion has been driven by strong growth in the market for dedicated servers, which are increasingly popular with hosting resellers and large web sites. ServePath leases dedicated boxes for prices ranging from $99 to $599 a month.

"Expanding into a large data center built by a major telecom carrier, with the best infrastructure available, is allowing us to take our business to the next level," said ServePath CEO John Keagy. "ServePath is pleased to have a presence in Telecom Center San Francisco and we look forward to building a long and solid business relationship with JMA Wired."

"ServePath is a great addition to the roster of tenants at Telecom Center San Francisco," said Art Chapman, President of JMA Wired. "JMA Wired is excited to work with such a fast growing company."

JMA Wired and its affiliates own and operate over 1.5 million square feet of premier telecommunication & colocation facilities throughout the Western United States including: San Francisco, Los Angeles and Phoenix. JMA Wired, LLC is a division of JMA Properties Inc.

ServePath was launched in January 2001 by the founders of InReach Internet. InReach was the largest profitable Internet Service Provider headquartered in California during the 1990s.

London Law Firm Picks SAVVIS

READING, United Kingdom -- SAVVIS Communications (NASDAQ:SVVS - News), a global managed IP and managed hosting services provider, today announced that Watson, Farley & Williams (WFW), an international law firm headquartered in London, has selected SAVVIS' Intelligent IP Networking(SM) to connect its offices across Europe, the United States and Asia. Read the full release.

FiberNet Buys Gateway Colocation

FiberNet Telecom Group, Inc. will acquire Gateway Colocation in a deal valued at $3.97 million, the two companies announced today.

The deal provides FiberNet with a 49,000 square foot colocation center at 165 Halsey Street, a Jersey City carrier hotel. The facility is 60 percent occupied by Gateway customers, including 25 carriers, Internet service providers and cable companies. The center is already connected to FiberNet's metro transport network, which connects many of the largest carrier hotels and office buildings in the New York area.

FiberNet will fund the acquisition with $170,000 in cash and 2.9 million shares of common stock, valued at about $3.8 million. The deal also includes an "earn-out" payment based upon ongoing revenues at the facility. The earn-out payment will also be paid in shares of FiberNet common stock.

The acquisition comes a day after FiberNet President and CEO Michael Liss was appointed Chairman of the Board as well. Liss outlined an ambitious future for the New York-based network services provider, which also operates a meet-me-room at Manhattan's 60 Hudson Street carrier hotel.

"This strategic acquisition expands our footprint in this key carrier hotel, where we already have a presence," said Liss. "We believe that there is an opportunity for FiberNet to fill the vacant colocation space in the facility with one or more customers seeking fully redundant space outside of New York City.

"Additionally, we intend to gain additional transport revenues from other customers of the facility and tenants of the building, leveraging the communications hub infrastructure that we are acquiring," Liss added.

Gateway had total assets of approximately $5.1 million as of Oct. 31, and had 2003 revenues of approximately $1.9 million in revenues through that date.

"The transaction is consistent with the emerging consolidation of telecom and data networking businesses that have survived the earlier difficulties of this sector," said Oskar Brecher, a founder of Gateway Colocation. "We believe that offering customers both colocation facilities and transport with a broad footprint generates tangible value."

The deal is expected to close by Jan. 31, at which point Brecher will become a member of FiberNet's board of directors.

Ticketmaster Moves to Equinix

FOSTER CITY, Calif.--Equinix, Inc. (Nasdaq:EQIX - News), the leading provider of network-neutral data centers and Internet exchange services, today announced that Ticketmaster and Citysearch will move the operations supporting their East Coast online business infrastructure to an Equinix Internet Business Exchange(TM) (IBX®) center. As a part of the move, Ticketmaster and Citysearch will have access to a redundant data center infrastructure and Internet hub environment that includes every major global network and an aggregation of managed service providers. Read the full release.

New Tenant for 365 Main

SAN FRANCISCO, Dec. 1 - EDAW, a leading landscape architecture, urban design, and environmental consulting firm with offices in the United States, United Kingdom, Hong Kong, China and Australia -- has chosen 365 Main to be their worldwide data center. EDAW moved their critical data communication operations to San Francisco-based 365 Main, to host their web-based software solutions for project accounting, resource planning, CRM and proposal development.


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