Back to the Future

There was a time when the glut of built-out data centers had folks suggesting that it would be years before we'd see new data center construction or industrial buildings being retrofitted for data center use. There's still lots of finished data centers available, but data-centric companies continue to invest in custom-built space. Today we have two examples: Lexis-Nexis will build a center from the ground up, while HostMySite.com will convert an industrial site into hosting space.

Lexis-Nexis announced yesterday that it will build a 60,000 square foot facility in Springfield, Ohio. ""Building this new computing center and research and development space is essential to supporting our expansion as a global company," said Bill Pardue of LexisNexis. "We are delighted to make this investment in the Dayton-Springfield corridor."

HostMySite.com will outfit an exisiting 12,000 square foot site in Newark, Del. Next month it will begin installing raised floors with downdraft forced-air cooling and redundant FM200 gas fire suppression systems, a central battery backup system and diesel generators. "Our revenues have grown 200% this past year and the new center will let us meet all future demands," said Lou Honick, CEO of HostMySite.com.

Twister in Town

It's been quieter than usual here on the Carrier Hotels web site this week. That's because events in the "real world" have kept me busy. A tornado decided to rearrange my yard Tuesday morning, and the rest of the week has been a bit of a blur.

Folks here in New Jersey had spent nearly a week worrying about whether Hurricane Isabel might cause storm damage. Isabel was pretty much a non-event. But with little or no warning, the tornado took less than five minutes to transform our neighborhood into a maze of twisted trees and fallen power lines.

I was sitting at a traffic light en route to the office that morning, preoccupied with all the things I wanted to accomplish at work. Suddenly, the light rain turned torrential, the air was filled with flying leaves and debris, and my car was rocked back and forth by a ferocious wind. I've seen enough Weather Channel specials to know a tornado when I'm sitting in one. My cell phone went off. It was my wife. "It came through the backyard," she said. "All the trees are down."

As the winds subsided I tried to drive home, but huge trees blocked most of the local roads, and it took nearly 20 minutes to retrace the mile back to our house. Miraculously, everyone is okay and the house is undamaged. My wife was in the family room when the storm hit, and heard a roaring noise and looked up to see our backyard filled with clouds, dust and debris. She retreated to an interior room, and when she emerged, the yard was a war zone of fallen trees.

The neighborhood is a wreck. Four toppled trees blocked our street and damaged several nearby houses. Fortunately, no one was hurt or killed, so far as we know. The Associated Press account of the tornado notes that there were at least 100 downed power lines in Lawrence, along with dozens of trees. We're one of the houses in our development with underground power lines, so PSE&G had our lights back on by 3 pm. Many of our neighbors were without electricity until late Thursday.

It was a long day cleaning up, and much remains to be done. It was a very different day from the one I set out to have. My office sat empty. A bunch of hosting and data center companies issued press releases. Other web sites ran them. The world kept spinning all day long without new content on CarrierHotels.com.

But I haven't forgotten you, and we'll be back trying to post news on our traditional schedule, weather permitting.

Outage in Baltimore

An apparent generator malfunction at a Baltimore building that houses Alabanza and Bulkregister.com left hundreds of thousands of web sites unreachable for much of Wednesday night. An overheating generator in the basement of 10 E. Baltimore created a smoke condition that forced the shutdown of the building's electrical systems.

Alabanza's chief executive officer, Thomas V. Cunningham, told the Baltimore Sun that all of its client Web sites - about 200,000 across the United States - were affected. A support forum message from ChristianWebHost, one of Alabanza's largest clients, placed the total length of the outage at 11 hours.

Alabanza provides turnkey hosting programs that automate essential functions for its reseller clients. Its hosted software allows resellers to sign up web hosting customers without the intervention of customer support employees or a billing department. Its sister company, BulkRegister, is the third-largest registrar of Internet domain names.

The outage creates a headache for Alabanza, which like most hosts has touted its reliability. "Alabanza recognizes that downtime is not an option for your servers," the company says on its web site. "That's why we invest heavily in hardware and facilities that ensure that your clients are up and running on the web 24 hours a day, seven days a week."

VeriSign Draws Heat

VeriSign's decision to alter the domain name database to boost its advertising revenue has drawn the wrath of network operators, who say the change makes it much harder to filter Spam and trouble-shoot network problems. Some critics say VeriSign's strategy - in which it redirects any errant URL request to a VeriSign search page bearing keyword-based advertising - is in effect allowing it to assert control over every unregistered domain in the .com and .net universe.

VeriSign's policy was initially discussed as an advertising play in stories in Computer Business Review, The New York Times and The Wall Street Journal (subscription). The concept is similar to efforts by Microsoft and AOL, which configure their web browsers' default settings to redirect bad URLs to custom search pages.

But instead of changing software on a users' desktop, VeriSign's DNS-based approach changes the Internet itself. All misspelled URLs that used to return an error message now return a working web page - which is where the problems begin for network administrators.

An example is Spam control. Since Spammers use phony return addresses, many ISPs filter and delete any e-mail that originates from a non-working domain. Now all those domains "work" - if only to serve ads for Verisign. Without a technical workaround, all that Spam with forged return addresses could now sneak through the filters.

Network operators are indeed developing workarounds. But the level of frustration and anger with VeriSign is growing, and efforts to challenge the policy with ICANN may follow. One Slashdot user noted that some trademarked business names are not registered as .com domains, suggesting that VeriSign could be infringing trademarks if it uses those URLs to generate revenue for itself.

VeriSign has prepared a white paper (PDF) articulating its policy. For more reaction and opinion, check out threads on Slashdot and the NANOG list. There's also news coverage by AP.

C&W Sale Update

About six suitors are weighing offers for the US hosting unit of Cable & Wireless, and the company expects to narrow the field to two in coming weeks, according to a report today in The Financial Times. The level of activity "has raised hopes that a sale of the division could be concluded before the end of the year," according to the paper.

Momentum for 365 Main

As we've noted here many times, the data center downturn has created opportunity as well as ruin. An example of a provider making the best of that opportunity is San Francisco's 365 Main: The Main Exchange, which acquired a first-class facility center for a song and has become a destination for Bay Area companies seeking to switch hosts. Last week it gained a high-profile new client in Raiders.com, the web site for the Oakland Raiders, which shifted from Cable & Wireless.

"The Raiders organization needed to be in a more stable data center space with a team working to provide us best of class service," said Tom Blanda, VP of Finance and Technology for the Raiders, who have captured the AFC Western Division title the past three years.

365 Main is owned and operated by a partnership including real estate investment company Rockwood Capital, San Francisco developer Union Property Capital and 365 Inc., the team that designed and operates the facility, which was bought from AboveNet after MFN filed for Chapter 11. The data center was completed in 2001 after a $130 million dollar investment by MFN/AboveNet, including a $30 million dollar seismic retrofit that utilizes a state-of-the-art base isolation system.

"This building is designed to survive earthquakes, power outages, and other disasters," said Jean Paul Balajadia, Vice President of The Main Exchange. "If the East Coast outage had happened in San Francisco, our technicians wouldn't have noticed so much as a light blinking on site. Our on site capabilities and multiple redundancies guarantee that our customers' data and Internet traffic can survive almost any challenge."

365 Main acquired several new customers following August outages at two other Bay Area facilities. Among them was AT-LINK America Inc., the US unit of a large Japanese provider of dedicated servers.

"We recently chose to host our disaster recovery fail over servers at 365 Main because of its massive redundancy systems and its overwhelming power backup system," said Michael T. Schoback, the Director of Operations of AT-LINK America, who said the new facility will "guarantee me the peace of mind that whether a problem is caused by a faulty substation, overloads on the California grid, an earthquake, or even an East Coast-style blackout, my business will continue to hum."

New Offering from C&W

Cable & Wireless is staying busy on the customer retention front, and will be rolling out a new hosting package offering free managed services next week. The Business Ready Hosting plan combines content delivery, security and storage for the price of colocation. Given C&W's announcement that it is exiting the US hosting business and will sell or close its data centers, the new offering appears designed to make the US business more attractive to suitors, rather than lure large numbers of new customers (who are likely to be wary given C&W's status).

The value will be attractive to colo customers who'd like to add managed services. The offer could also boost the number of C&W customers taking managed services - which would make them more attractive to acquirers. There are no signs a sale is imminent, although UK media reports suggest the company is in early deal discussions with a group including C&W Global executive Simon Cunningham.

EV1 Bags A Bowl

Houston-based Everyone's Internet made several big moves last week to raise its profile and consolidate its branding. The regional Internet access and hosting provider purchased naming rights to the Houston Bowl, which becomes the EV1.net Bowl. It also renamed its fast-growing dedicated server company, Rackshack, which will now be EV1Servers.net. Company CEO and "Head Surfer" Robert Marsh also revealed that EV1 has acquired another data center in Houston to accomodate growth. "We are behind schedule (on the acquisition) but are declining to discuss specifics at this time," Marsh said this week in Rackshack's user forum. "There could be good news before the end of the week."

The data center expansion was driven by the explosive growth of Rackshack/EV1Servers, which now houses more than 17,000 servers and 400,000 individual web sites. In recent months it has been selling approximately 2,000 dedicated servers per month, and recently began selling domain names for $5 a year.

That growth has maxed out the power available from the local electric utility, a scenario that was widely discussed in the dot-com heyday but rarely seen in the real world. Marsh says the company is "exploring options with the local power utility on ways to bring new power from a different segment."

The purchase of naming rights for the EV1.net bowl may also summon memories of the Internet boom (Remember PSINet Stadium?). But Everyone's Internet is instead an example of a more retro success story: the regional provider that bootstraps its way to profitability and expands on the cheap in a consolidating market. Back in 2001 the company bought a 28,000 square foot data center for $1 million from distressed provider Verado, which spent $10.5 million building the facility.

While EV1 has built incredible momentum in the discount server market, Marsh made it clear that its ambitions extend beyond that niche. "While Rackshack.net was well known in 'Internet' circles, that brand was not well known within our local community and those not directly in the hosting business," he said.

Everyone's Internet has also been busy in the past year buying up hosting-related web properties, including Web Hosting Talk discussion forum, and Hosting Tech.

ISP Survives Twister

Companies who think they can get by without offsite backup should consider the tale of Aeneas Internet and Telephone, a small Tennessee ISP whose data center was flattened by a tornado on May 4. ComputerWorld reviews how Aeneas managed to be back in operation within 72 hours, but not without a near-death experience when it realized that all its tape backups were inside the data center and had been ruined by the storm. Aeneas dodged a bullet when a data recovery firm managed to save the data.

It's hard not to admire the effort and determination the ISP showed in recovering from a disaster (which it has chronicled on its web site). At the same time, it should serve as a wake-up call to any company that still keeps all its critical data in a single location. Two years after Sept. 11, the basics of data preservation are still ignored by many businesses. Whether you have enough terabytes to fill a data center or can fit your customer database on a Zip disk, the principle is the same: if your backups are lost, you may well be out of business.

Digex Backs MCI Bid

Digex is recommending that shareholders accept MCI's bid to acquire the common stock of the managed hosting company it doesn't already own for 80 cents a share. Some shareholders are grumbling about the valuation, given that publicly-held providers are trading at higher share prices. But Digex apparently had received only one other firm offer, which placed a far lower value on the common stock, according to the valuation report from its advisor Lane Berry & Co.

MCI owns a controlling stake in Digex, which wasn't included in the MCI/WorldCom bankruptcy filing but placed itself for sale late last year. Lane Berry, which Digex hired as a strategic advisor, concluded that MCI's offer represented a fair value for Digex, saying higher share prices for competitors Globix, Interland, SAVVIS and NaviSite were based on future expectations, rather than current value. Another factor was a lack of competing bids.

"Beginning in October 2002, Lane Berry conducted a sales process for Digex, contacting over 120 potential buyers," Digex reports in its SEC filing. "After receiving preliminary indications of interest, five of these parties were invited to conduct further due diligence on Digex, consisting of a management presentation, facility tour and access to additional financial, legal and business information.

"After this due diligence period, one party submitted a formal proposal which provided for a purchase price of $0.23 per share for the Common Stock, assumption of Digex's capital lease obligations, a $35 million senior secured note to MCI in settlement of its debt claims and the redemption of the Series A Convertible Preferred Stock."

Digex shareholders on message boards have panned the MCI offer, saying it undervalues the company. Perhaps they should consult the many investors in common stock of hosting companies who have wound up with nothing. With the only other bid valuing common shares at 23 cents, Digex shareholders may want to stop griping about MCI's offer.