NEW YORK (02/29/2000) - In a departure from tradition, U.S. computer services giant Electronic Data Systems Corp. (EDS) today announced it is packaging Web hosting and network management services ranging from bite-sized, fixed-price offerings for small companies to heftier a la carte menus for capital-rich businesses jumping into electronic commerce in a big way.
The new service packages, called the EDS Web Computing Suite of Services, come in three baskets: application service provisioning; network and security services; and Web hosting. They are being rolled out now in the U.S., but not immediately available worldwide.
"We're usually thought of as the elephant hunter, trying to bag those multiyear, multimillion-dollar deals," said Ken Capps, public relations counsel for the E.solutions unit of EDS, here today at market research company Gartner Group Inc.'s Internet & Electronic Commerce (iEC) show. Now, the elephant hunter is changing tactics, Capps said.
A primary reason for the alteration in EDS strategy is that businesses of all sizes are getting interested in the ASP (application service provider) concept -- whereby an outsourcer hosts applications which companies typically access over Internet Protocol-based networks, Capps said. "The idea of application service providing is a wave that we want to stay ahead of," he added.
Even though EDS had revenue of US$18.5 billion in 1999, it faces stiff competition from the likes of technology and services company IBM Corp. and hosting specialist Exodus Communications Inc., officials acknowledged here today. Last year, for example, EDS slipped behind IBM in terms of outsourcing revenue [See "EDS Reorganizes Itself," May 5, 1999.]. Though the bulk of its business from the new hosting and networking services are expected to come from the midrange packages, according to company officials, EDS clearly can't afford to turn away the business of the small companies.
Officials note, however, that the newly offered basic hosting services package, which starts in the US$2,000 per month range, is a price point that EDS can still make money on. Low-cost packages such as these are still profitable for EDS since the cost of server technology has come down steadily over the past few years and EDS can leverage infrastructure it has already built up, according to Tim Hazzard, director of Internet Hosting Solutions for EDS.
There is a mix of new and old services integrated into the packages announced today, Hazzard said. What will be new for customers, however, is the way that these services are packaged, in off-the-shelf, fixed-price offerings, according to Hazzard. Even the higher-end packages of services, with customized pricing, are designed to make the menu of options more readily understandable for users, Hazzard said.
-- Application Service Provisioning (ASP), with two offerings. The Enterprise ASP (E.asp) suite is designed to help companies develop, operate and maintain customized Internet-based ERP (enterprise resource planning) systems. The Wholesale ASP Services offer a menu of Internet-based applications that ASPs can resell to customers.
-- Network and Security Services also offers two service portfolios. Network Management Services includes management of routers and frame relay access devices, Internet access and various value-added network connection services.
Information Assurance Services is designed to help companies assess security requirements -- including data encryption, digital certificates, firewalls, intrusion detection needs -- and monitor system security.
-- Web Hosting features three types of hosting services. With shared hosting, a single server hosts more than one client's Web site. Dedicated Hosting offers a server or servers dedicated to a single client. Custom and Complex Hosting integrates existing legacy systems with Web functions. Web Hosting services are also offered in what EDS calls a wholesale model, for ASPs to resell these functions to small and medium-sized customers.
Details on pricing for all the services were not immediately available.
However, basic dedicated Web hosting services start at $2,200 per month for a single Windows NT-based server with Internet connectivity services and software; Gold-level dedicated services, for e-commerce sites, include a database server and an application server, and are priced starting at $7,000 per month for NT machines and $9,500 per month for Unix-based machines; Platinum-level services, including multiple database and application servers, are priced starting at $20,000 for NT-based servers and $37,000 for Unix-based machines.
EDS, in Plano, Texas, can be reached at +1-972-403-3945 or at http://www.eds.com/.