AT&T Web Hosting: Top Shelf

 
 
By Baselinemag  |  Posted 2005-01-13
 
 
 

Looking for cheap Web hosting? Don't look to AT&T. Customers, however, say they're willing to pony up extra because its services are among the most consistently reliable in the business.

Reference publisher Merriam-Webster, whose free site serves 100 million pages per month, picked AT&T in 2001 after four of its previous hosting providers went out of business or were acquired, says Michael Guzzi, manager of electronic products. "We wanted a provider with some financial stability," he says.

According to Guzzi, Merriam-Webster's Web sites haven't experienced a single outage in the past year attributable to AT&T. He says the company's performance-monitoring services have been superb. "They usually detect a problem before I do," he says. "That communication is a real plus."

View the PDF -- Turn off pop-up blockers!

AT&T's biggest minus: It's pricey. Customers and industry analysts estimate that its Web hosting services run 10% to 15% more than the industry average. "AT&T could always become more cost-competitive," says Davidson Scott, director of architecture and infrastructure for Michael Baker Corp., an engineering and energy consulting firm in Pennsylvania. "I'm always making that argument with them, and they're responding. They acknowledge it's a competitive market."

But more important than the raw price is "whether this provider is going to be around for the next three to five years," says Bryan Garcia, chief technologist for TALX, a St. Louis-based payroll and human-resources services company. "Having to move hundreds of servers could be wildly disruptive for us."

When Garcia and his team toured AT&T's Dallas data center, they saw that the company hosted the equipment running its network there. That wasn't always the case with other providers TALX evaluated. "Seeing AT&T eat their own dog food—that impressed us," Garcia says.

AT&T has proved its worth to the U.S. Golf Association, says Bill Lacey, the organization's manager of Internet services. The USGA's 20 Web sites include that of the U.S. Open championship, which this year delivered 75 million page views over four days. "Our marching orders internally were, 'You guys can make mistakes—except for the U.S. Open site,'" he says.

For $225,000 annually, the USGA can serve up to 30,000 gigabytes of data over AT&T's network. That fee is about 15% higher than the previous operating costs for the association's Web sites, but Lacey believes the quality of AT&T's hosting services has helped attract new sponsors: "The business value has outweighed the cost."

Web Hosting

AT&T
1 AT&T Way,
Bedminster, NJ 07921
(908) 221-2000
www.att.com/hosting

Ticker: T (NYSE)

Employees: 61,600

Jim Daugherty
Dir., I.T. and Applications Networking
The 18-year company veteran oversees all hosted application services. He was previously in charge of AT&T's network-based virtual private network offerings.

Christina Costello
Dir., Hosting Products
Responsible for leading the team that develops hosting and utility computing services.

Services
Provides managed Web hosting in 13 Internet data centers in the U.S. and 13 internationally. Other services include management of databases, hardware and operating systems, storage, application performance and security.

Reference Checks

1-800-Flowers.com
Ira Sheinwald
VP, Infrastructure Services
isheinwald@1800flowers.com
Project: Flower and gift retailer operates 42 racks of servers and other equipment in AT&T's New York data center and 15 racks in the carrier's Dallas facility.

U.S. General Services Administration
John R. Murphy
Dir., E-Gov Solutions Support
(202) 501-1231
Project: AT&T hosts infrastructure for the agency's FirstGov Web site at a facility in Ashburn, Va.

Merriam-Webster
Michael Guzzi
Mgr., Electronic Products
mguzzi@merriam-webster.com
Project: Reference publisher in Springfield, Mass., hosts six servers at two AT&T data centers for its free and subscription-based Web sites.

U.S. Golf Association
Bill Lacey
Mgr., Internet Services
blacey@usga.org
Project: The Far Hills, N.J., association's 20 Web sites are managed by AT&T, which also hosts streaming Internet video for major tournaments.

Michael Baker Corp.
Davidson Scott
Dir., Architecture and Infrastructure
dscott@mbakercorp.com
Project: AT&T hosts 60 Web sites for the Moon Township, Pa.-based engineering consulting firm and its clients, as well as an Oracle 11i enterprise resource planning system.

TALX
Bryan Garcia
Chief Technologist
bgarcia@talx.com
Project: Payroll and human-resources services company hosts Web-based employment and income-verification applications at AT&T's Dallas data center.

Executives listed here are all users of AT&T's services. Their willingness to talk has been confirmed by Baseline.

AT&T Operating Results*

2004YTD20032002
Revenue$23.26B$34.53B$37.83B
Gross margin44.4%46.6%49.4%
Operating income/loss-$10.70B$3.66B$4.36B
Net income/loss-$6.74B$1.87B-$13.08B
Net margin-29.0%5.4%-34.6%
Earnings per share-$8.48$2.36-$17.08

* Fiscal year ends Dec. 31; YTD reflects first nine months. operating expenses for the nine months endED Sept. 30, 2004, include impairment, restructuring and other charges of $12.7 billion.
Source: company reports

Other Financials**

Total assets - $32.06B
Stockholders' equity - $6.44B
Cash and equivalents - $2.63B
Long-term debt - $8.88B
Shares outstanding - 795M
Market value, 1/10 - $14.95B
**As of Sept. 30, 2004, except as noted