Dell Launches Web-Hosting Business, Targets Small And Medium Companies

In an effort to diversify beyond its slowing PC business, Dell Computer today said it is launching a Web-hosting service aimed at small and medium-sized companies.

"There is a good chunk of that market that does not yet have a Web site who analysts predict are going to get one," says Tim Mattox, VP and general manager for Dell's Hosting Group. Citing industry estimates that the market will grow to $16 billion by 2003, Mattox says the fact that Dell is a well-known brand among small and midsize businesses will give it an edge over lesser-known pure-play hosting providers. "When you go out into the wild, wild Web, you want to go with someone you trust," Mattox says.

Through its newly created Dellhost.com site, the build-to-order computer maker will offer services starting at $17.95 per month for shared space on a single server. Space on a dedicated server starts at $299 per month. Beyond hosting, Dellhost.com will offer its customers a number of tools and services intended to make it quicker and easier for them to hang an electronic shingle. For instance, customers will be able to download a special version of Trellix Web, an easy-to-use Web design and production software package. Dell will also offer custom site design and consulting through Dellhost.com.

While Dell will provide the management and technical support for the businesses it hosts, the company has outsourced the physical storage of data to Interliant Inc., which maintains data centers in Atlanta, Houston, and Washington, D.C. The hosting service is part of a larger effort by Dell to find new revenue sources as growth slows in its core business. The company's most recent fourth-quarter net income of $436 million on revenue of $6.8 billion just surpassed the $425 million it reported a year ago. When Dell posted those results two weeks ago, company chairman and CEO Michael Dell said that he plans to more aggressively target the dot-com industry. Dell earlier this month created a business unit--dubbed the Internet Partners Division--that will focus exclusively on selling Dell equipment to Internet companies. The new group is headed by former Adobe Systems executive Judi Webster.

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