U.S. Users Weigh Options as Web Host C&W Exits Market

Many not surprised by the move, but schedule is unclear

When Cable & Wireless PLC announced plans to abandon the U.S. Web hosting and services market last week, customers appeared to take the announcement in stride.

Several C&W users said that because of the large overcapacity in the troubled Web hosting market, they foresee little problem finding another vendor. But the uncertainty surrounding the timing of C&W's pullout is causing a headache for some.

Russell Kuteman, vice president of finance for amusement park company Six Flags Inc., which sources content-delivery and Web hosting services from C&W, said it's too early to decide what his company will do. And C&W isn't helping much with that decision.

C&W spokesman Chad Couser said the company's U.S. customer base would be valuable for another vendor that could potentially come in and take over those accounts. Service will continue unaffected during the transition, he said. "We want to maintain the value of the business" while other avenues are explored, he added. But no deadlines have been set for when another vendor must be found or for the end of C&W's service.

That presents a problem for Oklahoma City-based Six Flags, which doesn't know how long to wait before deciding what steps it should take, Kuteman said. "Companies like us and others that have commerce across their Web sites can't afford to be in a risky situation as far as services go," he said. "We're going to keep a finger on the pulse [of the situation], and the minute our comfort level moves in the negative direction, we'll be gone."

John Godwin, chief technology officer at online movie download service Movielink LLC in Santa Monica, Calif., said C&W's announcement of a sweeping restructuring and complete exodus from its money-losing North American business wasn't a surprise.

"I think a number of companies have been in trouble in this economy," he said. "We think they'll handle this very responsibly" by finding a qualified buyer or giving clients enough notice to make new arrangements. "We just don't think it will have an impact."

Many C&W customers were in the same predicament 18 months ago when C&W took over the U.S. business for bankrupt Web hosting vendor Exodus Communications Inc. .

Rick Thimble, IT manager for the U.S. and Europe at plastic parts maker Moldflow Corp. in Wayland, Mass., said he's not worried, even after having gone through the same experience with Exodus.

The C&W announcement comes less than three months after Moldflow added an IP virtual private network contract to its Web hosting deal with C&W, Thimble said. "We're still implementing the network," he said.

"There's not too many . . . companies that haven't gone through this," he said of C&W's cuts. "What are your choices?"

Ron Pellowe, director of systems and networks at online equipment asset marketplace EquipnetDirect Inc. in Braintree, Mass., said he also survived the Exodus meltdown. "Honestly, I don't think it leaves us in a bad place," Pellowe said. "There are a lot of vendors out there who are hungry. I'm not feeling like we're without options."

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Timeline

November 2001

C&W acquires Exodus' U.S. customer base.

November 2002

C&W announces pullback to serve only major U.S. clients.

June 2003

C&W announces pullout from U.S. market.

Copyright © 2003 IDG Communications, Inc.

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