BellSouth, which spent millions building cutting-edge data centers in Atlanta and Miami, is quitting the data hosting business.

Bell South announced this morning that IBM is taking over the facilities.

No financial terms were disclosed.

“BellSouth is in the business of providing excellent service through comprehensive communications solutions to customers of every size,” said Donna Lee, BellSouth’s chief marketing officer, in a statement. “The agreement with IBM is a natural extension of BellSouth’s data portfolio, utilizing IBM’s competencies in hosting and application services to complement our core data services. BellSouth’s teaming with IBM represents the next stage in business computing, in which services, skills and resources are delivered on demand over the BellSouth Network.”

One analyst told Reuters that the move made sense for both companies.

“IBM was interested in gaining some more presence in the Southeast, and BellSouth was interesting to IBM because they have a lot of small and medium sized businesses in their region,” said Melanie Posey, an analyst for market research group IDC.

BellSouth executives also are holding a conference call with the media Wednesday at 11 AM to discuss “announcements supporting its data strategy and its intelligent network infrastructure,” the company said.

The two centers, which opened in late 200, support some 100 customers.

But the arrangement doesn’t stop there. The companies also announced a much broader collaboration agreement. Key points include, according to the statement:

  • Jointly marketing IBM e-business hosting services. Hosting services from IBM will be delivered from the two facilities, utilizing the BellSouth Network.
  • Jointly marketing IBM e-business on demand services to small and medium-sized business customers in the Southeastern United States.
  • Exploring the possibility of joint product development with a focus on network services that can be delivered on demand to customers. Such services could include Storage, Voice Applications, Broadband Services, Homeland Security and Wireless.

    • BellSouth executives also are holding a conference call with the media Wednesday at 11 AM to discuss “announcements supporting its data strategy and its intelligent network infrastructure,” the company said.

    The web and data hosting business has become quite competitive over the past several years, and BellSouth didn’t get into the business until 2000.

    BellSouth: www.bellsouth.com

    IBM: www.ibm.com