Users Survive Web Host's Fall

Exodus case shows wisdom of backup

For Neoforma Inc., which builds online health care supply marketplaces for customers, the bankruptcy and pending demise of Web hosting company Exodus Communications Inc. is a minor inconvenience.

Although Exodus' hosting services are critical to its business, San Jose-based Neoforma already uses a second hosting company for redundancy, so that a bankruptcy or even a natural disaster can't shutter its customers' sites for any length of time.

"It insulates you from exactly the kind of situation that Exodus is in," said Steve Wigginton, executive vice president of marketing, operations and development at Neoforma.

Under the ongoing bankruptcy, which is set to be finalized next month, 30 of Exodus' 48 hosting data centers will be sold to Cable & Wireless PLC (C&W) for about $575 million in cash. London-based C&W hopes to keep most of Exodus' approximately 3,500 Web hosting customers as it takes over the firm's operations and expands into the market. Santa Clara, Calif.-based Exodus is one of the world's largest Web hosting companies.

But assuming that the sale of the data centers to C&W is approved by the bankruptcy court, the Web sites of Exodus' existing customers apparently won't miss a click. Exodus will pay to migrate customers whose Web hosting facilities are in the 14 data centers not being bought by C&W, said an Exodus spokeswoman.

For at least one Exodus customer, however, those assurances weren't enough.

Dan Agronow, vice president of technology at, the Web site of The Weather Channel Enterprises Inc. in Atlanta, said Exodus' bankruptcy filing was only one of several factors in his company's decision to switch to WorldCom Inc. for its hosting services just last week.

While was satisfied with the service it received, it had "concerns related to the ongoing Exodus support and financial stability," and it saved money by going with WorldCom, he said. "Since we had those concerns, we started looking around," explained Agronow. The final decision to switch was made before the Exodus bankruptcy was announced, he said.

Ironically, used C&W as a hosting firm before switching to Exodus in late 1999, Agronow said. That prior experience wasn't good, he said, adding, "They seemed to have a lack of experience that impacted customers often. It was a challenge to work with them."

Tim Tuttle, chief technology officer at Bang Networks Inc., a network services and systems consultant for banks, said that as an Exodus customer, he hasn't seen any degradation in service since the company was hit by its ongoing financial problems.

San Francisco-based Bang has been using Exodus for about a year as a secondary hosting provider for redundancy purposes. The bankruptcy and sale of the data centers to C&W won't necessarily mean any changes in that relationship, said Tuttle, who added that he's pleased with the pending buyout by C&W.

"We're relieved and our customers are relieved that they're taking over," he said.


Exodus Lifeline

The sale of assets to Cable & Wireless means continued service to Web hosting customers.

Under the deal, which awaits bankruptcy court approval, C&W would:

Buy 30 of Exodus’ 48 data centers, including 26 in the U.S.

Pay $575 million in cash and assume $180 million in liabilities.

Assume contracts for about 3,500 Exodus customers.

Copyright © 2001 IDG Communications, Inc.

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