www.webhostmagazine.com October 29, 2001

EXPERIENCED MANAGEMENT TEAM ANNOUNCES THE FORMATION OF Hosted Solutions MANAGED HOSTING

High end managed web hosting company has signed over 120 clients since June 2001.

Cary, NC - October 1, 2001 - Privately held Hosted Solutions Managed Hosting was launched June 2001 when a proven, well-seasoned ownership team acquired the data center and key technology assets of Morrisville N.C. based Interlan Corporation.

Since then, the company has hired key personnel from the Interlan technical and sales staff and signed agreements with over 120 customers.

Rich Lee, CEO of Hosted Solutions said “We saw a unique opportunity to hit the ground running with an incredibly strong value proposition - highly engineered solutions, an experienced and responsive support staff, rich technology assets and an aggressive pricing strategy to leverage our debt free financial position.”

“Rich and I have owned and managed several successful Internet services businesses in the past,” said Chris Hanks, President of Hosted Solutions. “Hosted Solutions combines our proven management experience and sound business sensibilities with proven human and technology assets from a well established Internet services company.”

The fact that outsourced managed hosting is a hot space has been well documented by industry analysts. According to IDC, enhanced services (including Web hosting) is the fastest growing segment of the Internet services market. The market for fully managed services, in which the hosting provider owns and maintains all the equipment, is expected to grow to more than $11 billion in 2005, from $500 million in 2000, with the biggest growth spurt coming in 2002 and 2003.

However, while the industry is generating high revenue growth, most of the multiple location data center players (e.g. Exodus, Relera, Inflow) are roll-up companies built through aggressive and rapid acquisition. The resulting debt load has them in a stranglehold as they burn through operating cash in hopes of being cash positive in the next few years.

According to Lee, “It's no secret that many of the data centers around the country are saddled with overcapacity and huge debt loads. We have no debt, are profitable, and have a simple, straightforward and sustainable business strategy - provide small to midsize companies with customized, scalable and cost effective web hosting, data storage and security solutions.”