DIC targets Middle East-wide hosted service market

Dubai Internet City has signed a deal with IBM that will lead to the creation of the region's largest e-business hosting service within the campus.

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By  Rob Corder Published  May 20, 2001

Dubai Internet City today outlined plans to install a second data centre within the complex.

The data centre, which will be installed and managed by IBM, will offer businesses throughout the region with managed services such as Web site hosting, application hosting, storage hosting and security service provision. Phase one of the data centre project will be completed by the end of the year and an additional data centre is planned within the agreement between DIC and IBM.

"Our aim is simple: to offer the best possible e-business facilities to all organisations, both public and private sector, operating in this region," said Mohammed Al Gergawi, director general of Dubai Technology, Electronic Commerce and Media Free Zone Authority. Our partnership with IBM is designed to deliver just that, namely a secure, reliable and scalable hosing facility that is world class," he added.

Exact details of the financial arrangement between DIC and IBM were not disclosed at the press conference held in Dubai. However, a source close to the project said it was modeled on similar deal signed in 2000 between IBM and KPNQuest, one of the largest ISPs in Europe.

In the KPNQuest deal, IBM and KPNQuest agreed to a 50/50 revenue share from a network of "Cybercenters" built across Europe. Both IBM and KPNQuest sell the services of these Cybercenters. IBM customers, in particular, are encouraged to migrate their systems to the network of data centres. For this reason, IBM committed to leasing 25% of the capacity of these data centres.

DIC's deal looks almost identical, although on a smaller scale. Technical, sales and marketing teams will be jointly established by DIC and IBM to sell the services of the new data centre. IBM customers in the region are expected to be a prime target to give the centre momentum and mass in its startup phase.

Tenants within Dubai Internet City, which currently access a Sun Microsystems-based data centre for their ISP services, will be encouraged to migrate to the new infrastructure, according to Ahmed Binbayat, CEO for DIC. Sun, however, said that it had heard of no plans that would cut short their contract to manage Internet access for the City.

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