Marc Andreessen always could get the ink: poster boy for the Internet revolution, prototype for the late-'90s wave of 20-something dot-com millionaires, attracted the press whatever he did. They called him "Bill Gates with a college degree." The inventor of the Netscape browser was closely watched when he left AOL after the acquisition to found Loudcloud, a managed hosting company. Andreessen was in the news again a year ago when he took that company public in a grim and contracted IPO market. Now the news is again filled with Andreessen interviews and coverage of the sale of Loudcloud's hosting business to EDS.
Most outlets reported the deal's salient features, all straight from the press release. EDS will pay $63.5 million in cash for Loudcloud's primary business of developing and managing Web sites; that business is expected to bring in $75 million this year. In addition, EDS will kick in $52 million more over three years for the use of Loudcloud's secret sauce: its Opsware management software. EDS expects to realize $100 million in savings by deploying Opsware across all its hosting centers. Loudcloud the company will change its name to Opsware and concentrate on developing software. SiliconValley.com quoted a Giga analyst calling the deal "a good win all around" and also recounted an Andreessen quip on Opsware's new business strategy: "The software business is the worst of all possible business models, except for all the others."
Again straight from the press release, most outlets reported that 140 Loudcloud employees in the U.S. and the U.K. will be transferred to EDS. Only a few stories mentioned that a similar number will lose their jobs as Loudcloud transitions to Opsware. (SiliconValley.com reported 140 and the AP said 120.)
The Register provided an odd local angle to the story, noting that EDS "has 40 per cent or so of the U.K. government's IT business by value" and will add to that fraction with the Loudcloud acquisition. The Reg raised a British eyebrow at the press release's corporate boilerplate-ese: "According to EDS, the market for web hosting is growing at 61 per cent compound a year, which is news to us."
The diligent news prober could find further background in interviews Andreessen did for the New York Times and InfoWorld over the last week. Marc didn't spill the beans prematurely about the EDS deal, but hints of it ran through both interviews.
E-Commerce Times quoted an Andreessen quip from the firm's conference call unveiling the deal: "We said all along we wanted to be the EDS of the Internet, and now it turns out EDS will be the EDS of the Internet." Not so fast, Marc. Network World Fusion quoted an analyst's claim that IBM has four times the market share of EDS in the hosting business. - Keith Dawson
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Loudcloud to Sell Main Business to EDS (AP)
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EDS Acquires Loudcloud Managed Hosting Business
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