Sprint Sells DellHost to Vericenter
22nd December, 2003
Vericenter, a Houston-based provider of managed hosting and colocation, had been in discussions with Sprint in recent months about purchasing as many as four of the telecom company's surplus data centers. The company was launched in 2000 and is headed by Roger Ramsey, previously the CEO of Allied Waste Industries and a co-founder of Browning-Ferris Industries. Vericenter expanded into the Dallas market in 2001, and acquired the assets of Solid Systems in mid-2002.
In June Sprint announced plans to exit its unprofitable web hosting business. The unit's revenue couldn't support its huge overhead on data center space, with 10 leased centers of between 75,000 and 150,000 square feet each. Sprint said it would shutter eight of the 10 data centers, lay off 500 workers and take a charge of $400 million against earninigs.
The fate of DellHost has been a major question mark during Sprint's consolidation. DellHost was launched in early 2000 as a vehicle for computer hardware powerhouse Dell to offer hosting services to its many small business customers. In August 2001, Dell partnered with Sprint to operate DellHost, with Sprint agreeing to use Dell equipment in its hosting business, while Dell agreed to buy telecom services from Sprint. At the time, the two companies said they expected the alliance to "generate hundreds of millions of dollars in sales."
Two years later, DellHost's customer base would be respectable for some hosting companies, but not for a pair of visible consumer brands such as Dell and Sprint. The provider's 34K hostnames are split between Windows hosting (25K) and Linux (9K).