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"That," says Britton, "was a different time. ... Corporate America is always slow to adapt. They're coming around, but they don't get caught in the fury. Every business cycle has the new widget, the latest and greatest gotta-have-it, but you don't turn a 1,000-pound elephant on a dime."

Now, though, the market includes "groups that never considered themselves players when it was a web hosting or a telecom world."

The data center builder has the enterprise customer squarely on its radar screen, as does the MSP. So, too, does the hardware builder.

As specialists in Internet traffic management, Radware used to occupy a space that was highly competitive. Now, thanks to shakeouts and acquisitions, the company lays claim to being the only freestanding provider of traffic management hardware alone, without other service offerings providing a distraction. Radware can also rattle off a long list of clients that are not service providers.

"It's not so much a shift, as a broadening of what we're doing," says Marketing Product Manager Michael Rothschild. He points out that Radware still maintains partnerships with the companies it sought out from the get-go: service providers like Digex and Exodus, which use Radware hardware to live up to service level agreements. It's just that now, those providers have become a percent of the whole.

"One of the things we've seen with the hosting-provider-type infrastructure, is that 12-15 months ago it wasn't uncommon for a colo [provider] to open up 20 data centers in a year," says Rothschild. "Low and behold, we know what happened to the market, and we're retrenching a little. ... The market has decided for us who is going to be more of the market share vs. less of the market share."

Rothschild does not divulge where the biggest share of Radware's market now lies, but he does offer up a large cross-section of Radware clients. They include colleges like Arizona State University; dot coms like AccuWeather.com and Autobytel.com; government stalwarts such as the Army, Lockheed Martin and the U.S. Treasury; telecoms such as Cable & Wireless; financial customers Bloomberg and Ernst & Young; and the enterprise customers themselves - Compaq, Coors, 3M and IBM.

In short, Radware has covered its bases. "We've really gone after the markets that need us more now than ever before," says Rothschild. "Companies are looking at their infrastructure and seeing how they can get the most out of it, and we optimize it and save them money."

Britton emphasizes that he does not want to speak poorly of Web Hosting, or of the telecommunications industry that along with Web Hosting fueled the boom time. "I'm not bashing the web hosting industry," he says. "They revolutionized the communications media overnight, and I can't say enough about that. ... [The bust] wasn't their fault."

He points to the VCs, and the need to spend money.

"When they beat on the web hosting companies and telecoms for their burn rate, they forced them to do it. ... That's a real shame."

Yes, everybody did love Web Hosting.

Walking Among the Dead

As enterprise customers have become players, high-end web hosts have begun to rethink their business models. They've been forced to.

RELERA, for one, has abandoned its managed services offerings in favor of a pure colocation play. On Aug. 29, in a press release, CEO Eric Hood announced: "Over the next 30 days, the company will transition from the managed services business to provisioning of space, power and bandwidth in all of its data centers. ... RELERA will market those centers to large enterprise clients who require highly reliable and secure facilities, infrastructure and connectivity. Additionally, RELERA's data center clients will utilize their own technical staffs and equipment."

The company laid off 380 employees, keeping on 75 associates.

RELERA's original plans called for 25 data centers - 1 million square feet - in smaller cities such as Richmond, Va. And Memphis, Tenn. It has opened facilities in 11 markets.

"It is our view that there is a shortage of high-quality data center space available to enterprise customers in our markets. The demand in this niche will support our revised strategy," said Hood.

Conxion, however, is staying the course - with a few concessions to the outsourced insourcers. Simmonds does not concede that companies have to rethink the outsourced hosting model.

"It's been my experience that even the largest corporations have been prepared to give their complete e-business system over to a managed partner," he says. "They monitor its performance very carefully ... but big corporations are prepared to do that."

Those companies are no longer in abundance, though, so Conxion recently launched two initiatives it hopes will endear it to the enterprise market.

The first is called SureMove, which allows a customer to turn its colocated servers over to Conxion, which then manages them inside its data centers. The program is designed to entice companies that have already invested in infrastructure, but that are worried about the stability of their colocation providers. Pricing starts at $500 per month, per server.

The second initiative, launched in late August, takes a page from RELERA's playbook. Called Enterprise Xi, it links corporate data centers to Conxion's network. At the time of the launch, CEO Antonio Salerno said: "With EnterpriseXi, CIOs no longer have to choose between modernizing their data centers or outsourcing to accelerate their reach; they can have the best of both worlds. The servers can be anywhere the CIO wants them to be, and we'll bring our network computing infrastructure to them." Simmonds says Oracle and Microsoft both use the service, and that "in a discussion with a range of smaller customers, who are a little larger than the average Fortune 2000, they have a data center or components of a data center in house. There are some who will decide that colo, or any other kind of hosting, is too much of a risk, and if they do, they might value the connectivity."

Is colocation a good play again? Santinelli doesn't think so. The telecoms, he says, which already need facilities for switch architecture and IP telephony equipment, will own that business.

Others are looking for other approaches. Some MSPs are settling into regional roles.

"Enterprises are going to get smart, and they're thinking about, 'What do we really need to keep close to the vest, for company and corporate espionage reasons?'," says Santinelli. "But they're thinking, 'We don't want to build a redundant data center and hire an IT staff in Kansas City.' They'll find a provider there." That's what it has come to. Web Hosting used to fancy himself global.

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