The European market for web hosting services has changed dramatically in the past 12 months. What was once a mere add-on service offered by ISPs has grown into a highly focused and specialised business operated by the major telecoms companies and a pack of smart start-ups.

As operators race against each other to roll out ambitious networks of data centres across Europe -- to house rack after rack of web-serving hardware -- many an old hand in the telecoms world is beginning to detect the first whiff of consolidation in the air. The demand for robust web hosting services has been driven by fear. Businesses on both sides of the Atlantic are becoming reliant on the internet for sales, customer service operations and even in some cases applications. With so much riding on their websites, captains of industry want assurances that their fancy-looking, e-commerce enabled uris will not keel over in the face of traffic surges. Enter the web hosters.The web hosting business first took off in the more internet savvy US market. West coast web hoster Exodus quickly emerged as one of the leaders from among a host of smaller start-ups; meanwhile an alliance between AT&T and IBM has shown that the industry stalwarts are prepared to hit back.