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Leading companies include [7]rackspace.com, [8]Digital Nation, a
Verio subsiduary, [9]Interland, [10]Interliant, [11]DialToneInternet,
[12]CrystalTech, and Dell subsiduary [13]dellhost.com. The typical model
is to offer primarily Intel based hardware running either Red Hat
Linux or Windows 2000, with pricing schemes often starting as low as
00 per month for a moderate specification machine and low bandwidth.
This is seen as an attractive business model by hosting companies, as
there is limited revenue in shared hosting, while dedicated server
customers may typically generate in the region of K-4K per annum.
Customers gain the control and flexibility of having their own machine,
and the convenience of not needing to deal with hardware purchase,
shipment and upgrades themselves.
Many of the dedicated server companies are showing outstanding growth,
with rackspace.com having gone from 700 to over 2000 machines in a
little over six months, and [14]Interland having over 12,000 Windows
2000 sites just six months after the Windows 2000 launch. DellHost is
also growing quickly, presumably by leveraging its parent company's
customer base. Its [15]customer signup page shows how acceptable Linux
has become, with Red Hat, rather than NT or Windows 2000, the
default install. However, on the sites we find at dellhost.com
Windows 2000 leads Red Hat by 2:1, indicating the nature of Dell's
primary customer base.
Although the dedicated server companies are growing revenue very
quickly, the primary beneficiaries may be their suppliers. Intel based
hardware vendors will make more money by selling multiple machines to
dedicated server companies, while Microsoft benefits strongly from the
greater number of software licences sold.
Sun buys Cobalt
Arguably the company that has gained most from the trend to dedicated
servers is [16]Cobalt. Symmetrically, Sun, whose larger machines had
