Using our proprietary "Zero Sum" evidence-based market reporting software, Backchannel puts PIPEX and Donhost under the microscope and examines their presence among FTSE350 and FTSE100 markets, charts their position versus the competitors, and looks for indicators of future performance.
FTSE 350 Hosting & Collocation
Donhost supplies the SME market segment, and has no material market share among FTSE350 companies. This is a business focused on volume, indirect sales and automated fulfillment. Donhost provides for just 1 FTSE350 customer (Severn Trent Water) whose dedicated Internet access is currently supplied by BT. This acquisition takes PIPEX hosting within the FTSE350 market to 12 customers, Roughly equal to Telstra UK (formerly PSInet UK) and slightly behind Energis. Donhost claims 92,000 customers of 'hosting services', one must assume that these are small businesses or sole traders. Will PIPEX successfully eject BT's Internet service from Severn Trent and replace it with their own?
FTSE350 Dedicated Internet Access
The Donhost acquisition has no impact on FTSE350 Dedicated Internet Access, where PIPEX continues to outperform Easynet & Telewest, but further emphasises PIPEX lack of product cross-selling between hosting and access business units.
The PIPEX connectivity business has a small but significant market share, of FTSE350 dedicated Internet access. PIPEX continues to perform more strongly than Easynet and Telewest in market share, but has been unable to gain any ground on the 7th placed provider Energis within the last 7 months.
PIPEX have thus-far been unable to cross-sell both Hosting and dedicated Internet access to FTSE350 customers. 10 of the 12 PIPEX FTSE350 hosting customers chose to place their order for dedicated Internet access with an alternative supplier. Given the high cost of acquisition of direct-sold corporate customers and PIPEX fondness for M&A, one wonders why more focus is not given to cross-selling.
PIPEX reputation for reliability is expected to persist throughout the integration of this latest acquisition. Neither PIPEX nor Donhost have suffered any significant customer outages observed by Zero Sum in the last 7 months, indicating a high quality infrastructure with a capable customer service desk. This strong performance is in spite of the customary upheaval of multiple acquisitions which can sometimes lead to a decline in quality of service.
FTSE350 Hosting & Collocation Customers
FTSE350 Dedicated Internet Access Customers