Nervous Philips Bringing Web Hosting In-House

By Anne Chen  |  Posted 2002-01-29
Increasingly concerned about the viability of its Web hosting outsourcing provider, global electronic giant Royal Philips Electronics NV has decided to pull hosting responsibilities for 350 of its Web sites in-house.

Philips, one of the worlds largest electronics companies in the world, was hosting its primary e-commerce data center at an Exodus Communications Inc. facility in Weehawken, N.J., when the Web-hosting firm declared bankruptcy on Sept. 26. The announcement was a wake-up call to Richard Bogues, director for the corporate data center who escalated a move to relocate his companys servers in-house.

"We started questioning the viability of Exodus in August, and I raised a point about this becoming a business risk because our primary data center was at the mercy of their ability to remain in business," Bogues said. "When the company filed Chapter 11, that sent people into a panic in Holland because theres a fine line between Chapter 7 and 11."

It is hardly surprising that companies such as Philips are choosing to pull their servers out of Web hosting facilities and relocating them in-house. Corporations such as Exodus have struggled to battle the continuing downturn in the telecommunications sector after incurring debt from building out global networks. Global Crossing Ltd., which this week announced that two business partners, Singapore Technologies Telemedia Pte. and Hutchinson Whampoa, will take a majority stake in the company as it restructures its balance sheet, was forced last year to sell off its Web hosting business to Exodus.

In September, Philips began prepping a data center at a corporate location in South Plainfield, N.J. The company hired Dell Computer Corp.s Dell Premier Enterprise Support Services to handle the relocation of 175 Dell PowerEdge servers running Microsoft Corp.s Windows 2000 Server and Red Hat Inc.s version of Linux. Dell also moved about 30 Sun servers. Sun Microsystems Inc. handled the relocation of another 30 servers running the Solaris operating system. In all, the data center powers Philips 350 global e-commerce and informational Web sites.

Dell technicians migrated users and servers in phases to accommodate the need for Philips Web sites to remain up and running 24 by 7. The entire project was finished on Dec. 27.

While Philips chose to in-source its e-commerce data center, Bogues said his company has not given up on Web hosting firms. In fact, when Philips mirrors the data center in The Netherlands during the third quarter of this year, Bogues said using a third-party hosting firm has not been ruled out.

"For a primary data center, it is better for us to have it in-house," he said. "But for a second site, a third party would be ideal."

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