Dell moves into application hosting

Dell Computer Corp. took its first step today into the application-hosting arena by announcing its Dellhost.com program.

Dell Computer Corp. took its first step today into the application-hosting arena by announcing its Dellhost.com program.

The new service, made possible through a partnership with Interliant, a service provider based in Purchase, New York, is targeted at assisting small and midsize businesses create an Internet presence.

Through the program, at http://www.dellhost.com/, Dell will provide a variety of Web hosting services, including design tools and access to Dell PowerEdge servers and PowerVault storage, and a choice of hosting packages for either dedicated or shared servers.

The move could spur acceptance among businesses and swell the ranks of customers adopting the nascent ASP (application service provider) model, according to industry analysts.

"Dell brings the brand and the credibility and confidence to the customers," said Laurie McCabe, an analyst at Summit Strategies, in Boston. "This is huge because Dell is a great channel to provide hosted services."

Company officials have characterized the announcement as the first step in Dell's long-term service provider strategy. The move comes two weeks after Dell announced its new Internet Partner Division, designed to sell hardware in the burgeoning service provider marketplace.

With system vendors jumping into the ASP ring, the most immediate impact will result from the number of customers, both existing and potential, that these companies bring to the table.

"Interliant already has a good number of customers, but Dell is leagues ahead," McCabe said. "This is a great way to get people tuned in to the service provider model."

In choosing to both supply and compete with its service provider customers, Dell will have a delicate balance to maintain, according to McCabe.

Dell's in-state PC rival agrees.

"If a company came to us and said, 'Would you host our app for us?' we would say, 'No,'" said Ray Frigo, vice president of the I-services division at Houston-based Compaq Computer Corp. "We would view that as competing with some of our best customers. Dell seems to be OK with doing that; we are not."

As a result, Compaq will launch in two weeks a 250-person sales force dedicated to selling hardware into large ASP and ISP (Internet service provider) accounts, according to sources close to the company.

Although Compaq has made strategic investments in service providers Digex and Concentric, the company remains steadfast in its refusal to become a service provider itself.

IBM Corp., also through a strategic alliance with Interliant, and Hewlett-Packard both offer hosting to customers.

"The fact that we offer hosting is a separate thing from our sales to service providers," a Dell spokesperson said. "It is really the customer's choice. As long as it runs on Dell hardware, we're happy."

Prices for the Dell service start at US$17.95 per month for shared hosting, and $299 per month for dedicated hosting, with additional options for e-commerce, such as real-time transaction verification, also available.

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