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As everyone rushed to get an online presence, the web hosting industry looked a safe bet. With the Internet developing rapidly the demand for server space was predicted to increase exponentially and anyone with operational experience of IT set up Internet Hotels in an attempt to take a share of this booming market.

The problem is, it just didn't happen; racks lie empty and the hotels are barely occupied. Many of the big players have now disappeared and yet it seems Web Hosting may be getting a reprise.

The basic premise of Web Hosting is sound--someone else houses and manages your servers and you gain from the sharing of computer room resources such as power, air conditioning, back up generators, security staff, technical and operations staff.

The problem was that the low end of the market was run by a bunch of amateurs--keen to cash in on a safe bet, some vendors thought packing away a few servers in a spare room would do the job. Not surprisingly such ventures failed as cheap does not always mean cheerful, and no customer is going to trust their data and applications to a back room operation.

At the other end of the scale vendors followed the old adage of build it and they will come. Setting up Internet Hotels costs millions of pounds and as the major vendors competed to have the biggest, most secure and technically advanced Web Hosting centre, the costs soared leaving a big red hole in the balance sheet when the customers didn't come.

Another flaw was that customers wanted something more than just somewhere to house their kit--they wanted five star service, with extras if they wanted them. Many vendors missed this opportunity and customers looked after the kit themselves instead.

Many of the big players have been busy filing for Chapter 11 including Exodus and PSInet. This has provided the IT and Telecoms vendors who still have money in their back pockets an opportunity to pick up Web hosting assets at rock bottom prices.

It is the terrorist events of last year that are making customers think again about the benefits of Web Hosting. Spreading the IT assets through more than one location is looking just like the good idea it always was, and it's only a continued hesitancy to sign the purchase order that is stopping Web Hosting from being the success it always should have been.

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