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The Almighty Buck

Exodus Files For Chapter 11 Protection 266

Posted by timothy from the who's-protecting-your-online-data dept.
rit writes: "Albeit a bit expected, it is shocking to find that Exodus Communications has gone ahead and filed for bankruptcy. Exodus is one of the largest hosting facilities, and their major competitor, Above.net (owned by MetroMedia Fiber) is in pretty much the same boat ... circling the metaphorical drain of the dot-com world." Note that filing for protection from creditors while reorganizing is not the same as hanging up a big "closed" sign -- Exodus is still operating, and hopefully will be able to keep the LEDs turned on for a good long while (since Slashdot is hosted there).
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Exodus Files For Chapter 11 Protection More

Exodus Files For Chapter 11 Protection

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  • damn... sungard is going to pick up all the business that these guys have...
    • They're considered by many to be Exodus's chief competition. Watch these guys get huge.

      • well.. sungard is this really large, old company with an insane amount of cash and no debt.

        they LOVE recurring revenue streams.

        specialty is data recovery and data warehousing... they could take over exodus's customers without skipping a beat...

      • Ticker symbol SDS? (I don't know if that's them or not...) Share prices are under $25 right now...
      • They're considered by many to be Exodus's chief competition. Watch these guys get huge.

        Did anyone else read the post?

        Note that filing for protection from creditors while reorganizing is not the same as hanging up a big "closed" sign -- Exodus is still operating, and hopefully will be able to keep the LEDs turned on for a good long while
    • FYI

      Sungard doesn't really do collocation. They do disaster recovery services... they are not even close....

      You pay sungard a monthly fee, kind of insurance, if you datacenter burns to the ground, or otherwise, you declair a disaster, and go there and rebuild. They supply space, servers, everything you need to rebuild your business, including desks/desktop computers if you want to pay for it...

      I talk from experence, I worked for a company that used sungard, and about 6 months ago we went to thier AZ facility to run a Disaster Recovery test.... We ran everything on very large NT servers, and they had to do some specail stuff for us, because they've never had to provide NT servers so big... they mainly do mainframes and large unix boxes....
      -Tripp

  • Money was spent on the decor!! (Score:5, Interesting)

    by billmaly ( 212308 ) <bill,maly&mcleodusa,net> on Thursday September 27, 2001 @04:11PM (#2360791)
    I've been inside an Exodus facility. If they'd spent a little less on decor and "Gee Whiz" security features, they might be in a little less trouble. Must admit though, the plasma LED and the palm scanner for access were quite cool! :)

    Bill
    • I spent a lot of time inside an Exodus facility myself (in Jersey City, NJ). I have to say that it was ugly. Exactly what I expected, and wanted, in a hosting facility. Their tech support was real friendly and helpful too. And those "palm scanners" are really pretty cheap. I've worked at retail stores that used the same model.

      Here's hoping exodus stays afloat. Like I said, the people who worked there were really great.
    • This statement from their press release:
      not anticipating the decline as the dot.com bubble burst
      Every economist I know knew the .com bouble was going to burst. Granted no one knew when, but whatever happened to the general principle of 'Don't debt-finance a tech company' because revenues were not predictible. Granted 14 consecutrive quarters of sequential growth might appear predictable, but that's no excuse to abandon basic business principles.

      I know everyone did it, but if your friend jumped off a bridge, would you... (you get the point).

      --CTH

  • How do you run up a tab of $4.5 billion (Score:3, Interesting)

    by Anonymous Coward on Thursday September 27, 2001 @04:17PM (#2360838)
    I'll bet HSBC [hsbc.com] are pretty p*ssed - they're owed about $2 billion [bankrupt.com].

  • At least they named themselves well... (Score:5, Funny)

    by xFoz ( 231025 ) on Thursday September 27, 2001 @04:18PM (#2360847)

    Dictionary.com defines:Exodus [dictionary.com]

    exodus
    n.
    1. A departure of a large number of people.

    • Dictionary.com defines:Duh [dictionary.com]

      duh (d)
      interj.
      Used to express disdain for something deemed stupid or obvious, especially a self-evident remark.
    • So what should happen to Amazon, using this name theory?


      Will they eventually be beaten into the ground by female warriors? (And would they especially mind, or just take photos? ;) )


      -WS


    • And lo, Moses said, "Let my people go."

    • Exodus customers should find alternate hosting now. Not actually move servers now, just find someone that can give you assurances they will have rack space when Exodus starts closing down the less-used IDCs. (Seriously, have you been inside one of their IDCs lately? It's a ghost town...)

      S4R [s4r.com] does hosting, colo, services, and has rack space in SBC's [sbc.com] Irvine IDC. Inflow [inflow.com] is also good (and in SoCal, if you need that), but I get a very Exodus-like feeling from them... more sizzle than steak, like they've bought too many Aeron chairs.

      Whatever happens, if you have a server in an Exodus rack, you should probably make plans.

      -B

      • MSN hosts the vast majority of their network there (not to mention many other big names). I wouldn't be too worried.

  • Slashdot hunts for new hosting service (Score:5, Funny)

    by Bonker ( 243350 ) on Thursday September 27, 2001 @04:18PM (#2360849)
    Vendor 1: "You had *how many* hits during the World Trade Center Crisis? Jesus Christ! I don't think we served that much data in 1998 and 99 put together!"

    Vendor 2: "We can host your website, but we'll need to add some servers... and some bandwidth capabilities... and some reinforced steel floors to keep those servers from damaging the foundation when they crash and...:"

    Taco: "How Much?"

    Vendor 2: "One Million Dollars! Err... One Hundred Billion Dollars!"

    Vendor 3: (Runs away crying)

    Vendor 4: Of course I can host your website Mr. Malda. All you need to do is sign here on the dotted line... in blood please. Your harem of Natalie Portman clones and your Beowulf Cluster of Slashdot Cruisers will also be arriving shortly. Thank you for doing business with us. I assure you that your soul will be in *very* good hands.

  • We're Hosted at Exodus (Score:4, Interesting)

    by Mad Browser ( 11442 ) on Thursday September 27, 2001 @04:18PM (#2360854) Homepage
    My company is also hosted at Exodus. I must say that as far as service goes, they have been TOP NOTCH. Really helpful.

    Engineer on duty helping troubleshoot interface errors at 3am. That stuff counts...

    Also, at our IDC, the conference rooms are named after James Bond movies! Cool!

    Their IDC's are impressive facilities and I sincerely hope that they stay around...

    Our sales rep was a casualty of this chapter 11 filing... Too bad, he is a nice guy.

  • 1 year ago (Score:5, Funny)

    by Anonymous Coward on Thursday September 27, 2001 @04:19PM (#2360856)
    1 year ago, we started a new web application. We already had a cage at Exodus, but we need more room. It was almost impossible to get a 8 rack cage at that time. We managed to finally get one, and we set up our equipment. Since that time, I haven't been back there for about 8 months. Just went back there the other day and was suprised to see empty cages galore.

  • lets be honest (Score:2, Insightful)

    by Johnny5000 ( 451029 )
    how many of us are going to be crying ourselves to sleep at night if the commercialization of the internet ends and it's back to the way it used to be in the good old days?

    I hate to see Exodus go out of business as much as anyone else, but to make an omlette...

    -J5K

    • I don't think that's what would happen. Instead, we would see only the highest volume companies stay in business, along with fewer choices. This may be where it's headed anyway.

      I wonder why Exodus is going out of business. Is it because they aren't charging enough for their services? If so, I've been thinking, maybe there's too many free/cheap services available on the internet and in order for a company to survive, they need to really charge what they're worth.

      Seeing things like this happen though, I think it's good for the internet in the long run. Things can't go along at a crazed pace forever. Things need to get shaken up. When the dust settles, we can see where we're at, and move on again.

    • For as long as there are idiots bringing down IRC networks with massive denial of service attacks, that's not going to happen.

      For as long as I can't find new things on gopher, that's not going to happen.

      For as long as I'm typing on slashdot, that's not going to happen.

    • Cool companies like Exodus staying in biz and providing competition and customer service == goooooooooooood.

      Cool companies like Exodus dying, getting bought out, and consolidated into the Benevolent People's Dictatorship of AOL/TimeWarner/Corpnamehere/Corpnamehere/Corpnameh ere , featuring high prices, low security, and low service == BAAAAAAAAAAAAAAAAAAD.

      Let's recap. Goooooooooooooooooooooooood > BAAAAAAAAAAAAAAAAAAAAAAAAAD. I think we understand these concepts now, hmmm?

      -Kasreyn

  • Not Very Bankrupt (Score:2, Informative)

    by 1alpha7 ( 192745 )

    They have a commitment for as much as $200 million financing from GE Capital, "which will be used to fund operating expenses and supplier and employee obligations". They won't be under for long. This really is just a reorganization.

    1Alpha7

  • The thing that always sticks out in my mind about Exodus is that their router in Chicago was #$%^ed up for about a month over the summer, making it impossible to play EverQuest. About 80% of packets were dropped going through that node. That's fine for web pages - TCP/IP is designed with packet loss in mind, and it resends packets and all that if it doesn't quite make it. On the other hand, a UDP game doesn't have all that error checking built in, and if you drop more than about a dozen packets in a row, you've lost the connection.

    They repaired the problem, but that always sticks out in my mind, that they didn't quite have it together for a long time. And the less enlightened people blamed it on Sony.

    J.W.

    • Not exactly... (Score:1, Offtopic)

      by mindstrm ( 20013 )
      TCP is designed to deal with loss, yes, but only loss due to congestion. When it encounters loss, it backs off. The problem is, if you get loss due to some other reason, like radio noise or a faulty unit, where congestion isn't the cause, tcp will just keep slowing down trying to fix the problem, when in fact, the best solution would be to just keep retrying without changing parameters.

      UDP, on the other hand.. just means they didn't want to rely on TCP's flow control. UDP does have error checking; there is a checksum in the IP header.
      It doesn't mean there is necessarily no error chekcing or retransmission.. it just means they did it their own way. OF course, I have no idea how the Everquest protocol actually works...

  • ... in that they sorta borrow money long-term (equity) and lend it short-term (purchasing depreciating hardware). Now this is OK if people are idiots enough to pay obscene amounts (dot.con) like clueless venture capitalists but if you get the situation where all your customers disappear (dot-bomb), you are left with a nice little term called negative cash-flow.

    Seriously, unless the costs hit marginal pricing level, you have to be very very good to make money in the deflatory environment that Moore laws produces (as can be seen by the dire straits of many PC box-pushers).

    Conclusion ... buy monopolies like underwater sea cables.

    LL

  • Interesting piece about Exodus Hosting centres.. (Score:5, Informative)

    by cOdEgUru ( 181536 ) on Thursday September 27, 2001 @04:21PM (#2360879) Homepage Journal
    Picked up from an article on zdnet.

    ...

    The Exodus data centre in California, one of 43 worldwide, sits utterly undistinguished amid the sprawl fanning out from Los Angeles International Airport. The company's name doesn't even appear on the building, but the unassuming facade, which is wrapped in bulletproof Kevlar, belies its extremely high security, almost to the point of paranoia.

    Inside, a biometric hand scanner, another layer of bulletproof glass, two Pinkerton security guards, and a 500-pound door block access to 66,000 climate-controlled square feet of Internet servers, the online backbones of Exodus clients like Best Buy, eBay, KPMG Consulting, British Airways, Virgin, Merrill Lynch, Yahoo, and some 4,500 other customers. It's estimated that as many as one-third of all Internet clicks pass through Exodus servers. In a real sense what's behind that 500-pound door is, well, the Internet.

    ....

    One third of all clicks.. whew..!
    • It's estimated that as many as one-third of all Internet clicks pass through Exodus servers. In a real sense what's behind that 500-pound door is, well, the Internet. [emphasis mine]

      And they're still filing for bankruptcy. Go figure... Crappy business plan, anyone? I guess it really is a re-org.
      • "crappy business plan"?? No! Just dotcom fallout! When I walked through there, it was INSANE the size of the cages for certain dotcoms. The whole friggin place was a dotcom castle. They charged a crapload of money and still got business. I mean, what are you going to do when your business is going great, and then the market crashes/goes back to normal, and all your customers die? How can you make a business plan that protects you from your customers and still make money?
    • but the unassuming facade, which is wrapped in bulletproof Kevlar, belies its extremely high security, almost to the point of paranoia. Inside, a biometric hand scanner, another layer of bulletproof glass, two Pinkerton security guards, and a 500-pound door block access to 66,000 climate-controlled square feet of Internet servers...

      No wonder they're bankrupt! All that fancy hardware, really just for PR.


    • The kevlar fronting and bulletproof glass is for when their investors come-a-calling.
    • 'course, what they fail to mention is that the hosting facility has floor to ceiling *normal* double paned windows *in the colo*.
      <P>
      At least, that's the way it is in Santa Clara... All that physical security is a joke, it's just to make the executives of client companies feel better.
      <P>
      They waste money in other interesting ways too, like with LCD windows that become transparent at the push of a button to reveal.... the colo....
      <P>
      That said, I hope they don't go bust, that would be a big, big problem.

  • Who Now? (Score:2, Funny)

    by Anonymous Coward
    I'm about to start running a (very high volume) site. Who would you choose to host right now?
    AboveNet?
    Verio?
    • > Who would you choose to host right now?

      Conxion [conxion.net] - check out who their top three customers are... (Microsoft, Oracle, Symantec for Linux bodgers).

    • My company has used Verio (formerly Digital Nation) for over two years. Service as been top notch and they have more bandwidth than we'd ever need. At out peak, we were pumping out a continous 62 megabits/second and our ping times never grew a millisecond. Their prices are lower than most of their competition and they're fast acting (every departman that is aside from billing -- billing will try to screw you by continuing to bill you for some service you changed or deleted months ago... so watch your statements).

      Verio rocks.
    • My experience with Verio is not very good. Besides the fact of double billings, they have a router that hasn't been fixed in about a years worth of opened tickets. At one point, I was calling and reopening a ticket a day because of 75% packet loss through one of their gateways. Not fun for an ISP.

      I'm not for sure how Qwest is for hosting, but that would be the first place Id check.

      What about Rackspace? Anyone deal with them?

  • A note from an employee (Score:5, Interesting)

    by Dimwit ( 36756 ) on Thursday September 27, 2001 @04:23PM (#2360888)
    I work in the Managed Security Services department of Exodus (disclaimer: these opinions are my own, not Exodus's)...

    I can say that fiscal policy was pretty lax for a while, and I'm afraid it still might be. The purchase of GlobalCenter was also probably the biggest nail in our coffin - it weighed us down with a lot of debt and didn't really accomplish anything. Sure GC was our biggest competitor, but they would've gone under without our help after the dot-com crash.

    I hope to keep my job, at least for a while longer. The people are nice, the company pays for school, my boss is good on letting me schedule myself as I please...It's been a fun ride. I'm just surprised at the swiftness of the demise. I feel bad that I've kept my job, when several of my friends have been laid off all around me (I was unfortunate enough to witness several of the layoffs personally.)

    Either way, I've got other job oppurtunities lined up, so I'm not too scared. However, anyone who sees a resume for someone with Exodus experience, please consider them - they'll be worth the money.

    • Re:A note from an employee (Score:3, Informative)

      by Anonymous Coward
      As a former GlobalCenter employee, I have to agree. Exdous made the mistake of purchasing Globalcenter for a lot of stock - but not as much as the original deal was supposed to be. The IDC I worked at was mostly empty, but we had something at GC that Exodus didn't have a dedicated team. When you called in, you'd eventually get the same person(s). They knew your configuration - so at 3am when your servers died, they could help you qucikly. When we transitioned to Exodus - the teams went away, and you just monitored. I got put into Mananged Services, but then the bottom started falling out. Glad I got out when I did.

      An ex-Globalcenter/Exodus employee.
  • Hosting.com has a web farm in CharlseTown, Mass. right near the new Bunker Hill Bridge. Huge place.

    Just in case.

    Since you happen to be right down the road.

    (Local headquarters in Woburn, I think.)

  • It seems to me that dumping an unprofitable bandwidth hogging organization such as Slashdot would be an ideal restructuring move in the eyes of Exodus' execs. That would be a real bummer, Slashdot is such a vivid part of the Innurnet culture.
    • You don't think Exodus is making money off of Slashdot?

      I'm sure they negotiated a good rate but Exodus is probably making money... Or at least getting something from OSDN to offset the cost of the bandwidth they have committed to from their own providers...

      Anyway, Exodus management has been very aggressive at selling additional services to existing customers like managed firewalls, backups, etc...
    • It seems to me that dumping an unprofitable bandwidth hogging organization such as Slashdot would be an ideal restructuring move in the eyes of Exodus' execs.

      Huh? How do you figure. Exodus is having a hard time generating revenue, hence the filing for Chapter 11. How can you generate revenue if you drop your customers? I've never been in the ISP business, but I would imagine you'd want to negotiate a competitve rate plan to keep the few customers that you do have (Slashdot being one) from telling you to kiss their ass and going to another hosting provider.

    • Or, in short:
      Slashdot is hosted there
      ...for how much longer?

    • Did you not know that the customers at a colocation facility pay for bandwidth?

      maru
      www.mp3.com/pixal

  • infrastructure protection (Score:5, Interesting)

    by Lovejoy ( 200794 ) <danlovejoy@gmaiC ... m minus caffeine> on Thursday September 27, 2001 @04:26PM (#2360907) Homepage
    With PSINet tanking bad, Exodus on the Rocks and Above.net far behind (Not to mention Rhythms, Northpoint, etc..) , we have to start asking ourselves: "Do we have a vital national security interest in seeing these networks survive?" I think we do.

    Sure you can scream "Corporate Welfare" all day, but when the rubber hits the road (or whatever cliche' you like to use) we have got to insure the stability of these networks, notwithstanding the costs involved.

    Question:
    Does anyone know how close these troubled companies are to shutting down?

    How do we do an effective cost-benefit analysis on bailing out these networks? (Which ones to help, etc..)

    Who gets left holding the bag on these debts if the federal gov't decide to force them to keep operating and their vendors to keep supplying them?
    • Not a qualified financial analysist, but the companies you listed are far from the only backbones in the nation, and the ones that will remain are well set-up to take the load.

      Qwest's network would probably be the bext example.. their stocks have been declining slowly the past three months, but everyone's been declining lately. At the start of September it was still twice the value of Exodus. Basically, the people who own the wires will survive. That's what people have been saying for a long time; even during the height of the dot.com rush. AFAIK, Exodus just bought or leased lines from Worldcom and the like, which is what a lot of so called 'backbones' have been doing.

      What I see happening is an ISP fallout. As providers shut down, big businesses who need hosting will cluster into the survivors. Hosting facilities will become more and more rare, and the people who can actually afford hosting will be forced to cluster into the remaining facilities. Eventually the supply will dry up, and demand will exceed the supply. Then we'll find a much more stabilized industry.

      Fewer players at that point, but more stability.
      • Qwest is a good example of being well set up to take the load? Maybe you're thinking of a different "Qwest" than I am, but a company I do consulting for has several racks worth of hardware colo'd at the New Jersey facility and the IP service absolutely sucks.

    • We can't spend money on bailing out the ISPs and hosting facilities, we have to spend it on the airlines.

      Funny, both industries got themselves into the mess they're in. Why are we bailing either of them out again?

      (And yes, I know that if the airlines blow up, many many other businesses hurt. Thanks. How is that not true of Exodus?)

    • Re:infrastructure protection (Score:4, Interesting)

      by cjsnell ( 5825 ) on Thursday September 27, 2001 @07:00PM (#2361515) Journal
      Don't kid yourself. These companies are not tanking because of the downturn of the internet economy. They are tanking because they flushed good cash down the toilet. Take a tour of an Exodus datacenter and you'll see what I mean. Bulletproof glass. Alarmed manhole covers. Biometric (hand and body weight) entrances. Armored CAT5 cable. It's nuts, really. When is the last time you heard about someone storming into a datacenter and stealing, for example, one of Best Buy's Web servers? The way that these companies spent money is almost
      criminal. It must have been like an everyday Christmas for their purchasing folks. The "build it and they will come" mentality is what killed them.

      Like hell this country should spend tax dollars to keep these con men afloat
      • The securty expenses like bulletproof glass, and especially biometric security, probably don't add up to all that much relative to the size of the business. Besides the marketing advantage that everyone taunts it for, I believe they are necessary. I live 20minutes from MSN's biggest Co-lo, which is about 50% of a 3 story Exodus building. If I'm a terrorist and want to disrupt the economny, I can take out over 1/3rd of MSN, plus tons of other companies lifeblood with a bomb or a few armed men. But with 500 pound doors, that's not going to happen.


        When is the last time you heard about someone storming into a datacenter and stealing, for example, one of Best Buy's Web servers?

        How ignorant! You've never heard about the sabatoge because the physicall security is too high. It's easier to penetrate the systems from a network level. If they had lax security it'd be easier to bust in and rip their servers out. I can't believe you got modded +4.
    • Telus, a big telecom here in Canada, is apparently buying out PSInet to get their hands on all that infrastructure (not to mention customers). Don't know how it'll affect the US operations, just a blurb I saw on the news a day or two ago.
  • Not the end of the world for Exodus I mean. Obviously it isn't the end of the world for everyone else.

    IIRC Exodus have fourty something hosting facilities, presumably mostly empty right now, but they do have a lot of work and an excellent reputation. They'll be fine, they just need to downscale by a factor of, like, five. This, and the refinancing by GE, are just a part of that process.

    Dave

  • Since slashdot is there? (Score:2, Interesting)

    by rw2 ( 17419 )
    Exodus is still operating, and hopefully will be able to keep the LEDs turned on for a good long while (since Slashdot is hosted there)

    So since slashdot is there they should be able to keep the lights on for a long time?

    Ah the wonders of English.

    On the serious side, can anyone tell me how these places manage to lose so much money? Is it the labor, site or networking costs? It seems like web hosting should be an industry that, once you climb to the scale of Exodus, is really really profitable.
    • On the serious side, can anyone tell me how these places manage to lose so much money? Is it the labor, site or networking costs? It seems like web hosting should be an industry that, once you climb to the scale of Exodus, is really really profitable.

      They lose money because they spent huge amounts of money to "build capacity" during the dot-com boom. That included buying up other hosting providers. Now many of their customers are gone, they have enormous excess capacity, and they can't service their debt load.

      The fact that while money was easy, they wasted it horribly also doesn't help. The businesses that succeed are the ones that plan for the downturn, even as they are building capacity, rather than spending as if there's no tomorrow.

      During the dot-com boom, the conventional wisdom (which, as is often the case, was actually foolishness) was that you had to spend big to gain market share to survive the coming shakeout. That's a little different from planning for a downturn: it's planning to be the biggest when the downturn comes.

      It's like a game of chicken, where companies compete on how ludicrously they can overspend. In this environment, it's easy to lose sight of why you're spending the money, and get carried away. Strategic thinking is replaced by keeping-up-with-the-Amazons.

      How else could the Aeron chair fad be explained??? :)

  • No more "first post" (Score:4, Funny)

    by garoush ( 111257 ) on Thursday September 27, 2001 @04:29PM (#2360931) Homepage
    "...is not the same as hanging up a big "closed" sign -- Exodus is still operating, ...for a good long while (since Slashdot is hosted there)."

    Oh great, I see it coming. Very soon, everyone at /. is going to post in the hopes of being the Last Post.

    For once we finaly have an opportunity to out-post those First-Posters clones.

  • seemed a little ostentatious (Score:4, Insightful)

    by Sonic-B-PHuCT ( 19956 ) on Thursday September 27, 2001 @04:30PM (#2360937) Homepage
    I used to do some work for clients who had their systems at exodus and I found that it all seemed a little over the top. I've never understood why a datacenter needs 12 confrence rooms (or any for that matter... it's an OutSourced Datacenter, not a Marriot), bullet proof glass in the lobby, redundancy beyond reason - generators with enough fuel and power to run for 120 days at FULL load???? If the power is down for 6 months, chances are there's more important things to deal with than your website.
    Also, when I was shopping around for my own hoster, Exodus (while _extremely_ nice) didn't even bother trying to price within a budget. It was if they had been so used to getting blind VC money, that they didn't even understand the phrase, "I can't afford that." I don't know, just my opinion....
  • It's about time. Exodus and some of the other cited services (above.net) are some of the biggest spamhauses on the 'net. Now if some of the other spamhaus supporters (e.g., genuity.com) would die the 'net would have a LOT less spam!

  • Go to a Privately held Data Center, we did ! (Score:1, Informative)

    by Anonymous Coward
    Great place FiberCloud.com [fibercloud.com]

    Great People, Great Service, no STOOPID bursting policies (cough Exodus cough).

    The place is like Exodus, trick hardware, trick eye ball scanner security, big fat pipes to the Net.

  • CEO Krause On Ch. 11 (Score:3, Informative)

    by jlttb ( 513393 ) on Thursday September 27, 2001 @04:31PM (#2360948) Homepage
    CRN reports [crn.com] on CEO William Krause's (CEO for a month) conference call. "The action we took yesterday has given us the protection we need to restructure our debts and proceed on much more stable footing than before, and if you felt secure doing business with Exodus six months ago, you should feel even more secure today."
  • Which Hosting Centre with Global Reach is left after so many went the way of the dodo - PSINet sang the same tune a while ago "our European operations are not affected" (read "if you want to buy our European operations you can do so with little debt cos' the US operation takes it all in)

    The only names I can come up with right now are:

    - UUNet
    - NTT/Verio
    - C&W
    - ????

    Cheers,
    brrrrrr

  • About Exodus and why its Chapter 11 time. (Score:5, Interesting)

    by Zeio ( 325157 ) on Thursday September 27, 2001 @04:33PM (#2360961)
    I have worked for several companies that host at Exodus, and I have never need such disregard for fiduciary responsibility in my life. Most of the Exodus centers in and about the Santa Clara area, and there are many, many of which I have visited all tell the same story.

    This story was capacity that was build on expectation values attained from an unrealistic market. The bigger companies knew this, but the feeding frenzy was not abated even in light of its fiscal mindlessness.

    Why not wait to expand until you are bursting at the seams, having problems accepting new customers? Most people at Exodus cheap out anyway, I know a few personally that only buy non burstable 1mbit. Yet they built an infrastructure such that every cage could get an OC3 worth of bandwidth.

    I was in awe when my company got us a 6509, a 7206 and a 7507. We got this stuff used and it cost us a mint. I cant believe what Exodus did, the bought miles of $200,000 routers, switches and other things, miles of giant Liebert batteries, huge air conditioners, diesel power generators, hired the most moronic and incapable security guards on the planet, and bought these hand scanners that never - ever - seem to work right.

    At Digital Island, much is the same. The lease on all the equipment must be in the millions per month. The sad thing is that most of the carrier technology will probably change before the lease is up on a lot of the stuff.

    My suggestion to businesses: Never expect anything - Only expand to meet demand. If you are constantly "full," you can charge a premium rather than build a football field worth or colocation space for 10 customers.

    I have seen a few co location centers pop up recently; they are more intelligent in design. They don't wire in bandwidth until its needed, they don't buy equipment until its needed (and the BUY it), they have a building which is neat, like Exodus, but isn't extravagant, I mean, they make all the Exodus co-locations look like clean rooms at NASA or Intel.

    Co-location recipe: 1) Cheap warehouse in area close to a few OC-12 central offices. Make place look like Costco with lower roof. Add a few miles of Chatsworth ladder track. Buy routers per every some number of people that reaches three quarters capacity, avoid fiber to the cage until customers actually need it. Hire good people. Don't over invest in lame hand scanners that do work. (If every cage is locked, what would a person do in there anyway? Pull power cords from the mesh? And do this without getting caught?). Peer with a few carriers and scale up when needed. Most bandwidth is idle most of the time, bragging about OC-48 interconnects isn't cool, its useless.

    My current place of Employment was trying to get on Exodus's price list with our technology. The concept was to pay Exodus $50,000, the "verify" our product, then they will resell it.

    We laughed and moved on, knowing full well they were trying to squeeze for revenue - and we didn't need the endorsement of a dying behemoth.

    With Chapter 11, maybe Exodus will need to get smart. It has to now shift from building big, inefficient farms to having to farm the land you have properly to produce revenue.

    I wish Exodus the best of luck, and stop thinking you are AT&T or some such. Exodus is an overpriced co-location center with unresponsive technical support and too many dead weight employees.

    (One of the employees was shocked to find out we didn't have Visio 2000 installed, and he could not give the diagrams to me in JPG or PNG or PDF or some other useful format. I kept getting VSD files. I asked for a network diagram in xfig or something that we can use, and still, a blank stare)

    Interesting.
    • Thats sad considering you can export a Visio diagram in TIFF or something :)

      Jeremy
    • Let's not forget. Last time I visited one of the facilities, there were hundreds of empty desks; all of them stocked with Aeron chairs.

      Ooops, I just violated the Exodus NDA. Sorry.
  • A year ago, they didn't have enough space. Now they have plenty. I hope they can survive this, as they really do a great job. They route a TON of traffic, and this would really disrupt quite a large number of people. Anyone else here ever spend hours on end in the ice cold Waltham IDC?
  • I submitted this story yesterday, but via Ask Slashdot. I am curious to see what companies are doing these days as protection from the side-effects of dotcom fallout such as this. I know of a few co-location providers that have disappeared over the past couple years and wanted to know what steps people were taking to make sure that their data is up and running, even when the company that's storing their data is having financial difficulties and/or is closing down? How does one gauge the reliability of co-los?

    (My previous company used Exodus and went through a long decision-making process to pick them. Now what? - I understand that they'll stay "in business" but what if?)

    funny that in the middle of trying to post this, /. (hosted by exodus) becomes temporarily unavailable.....

    • Re:my rejected ask slashdot from yesterday... (Score:2, Funny)

      by Anonymous Coward
      "I know of a few co-location providers that have disappeared over the past couple years and wanted to know what steps people were taking to make sure that their data is up and running..."

      Well we started by having dual Co-Location presences with two major world-class providers, Exodus and AboveNet... Doh!

    • It's called Risk Management. (Score:4, Insightful)

      by mindstrm ( 20013 ) on Thursday September 27, 2001 @05:56PM (#2361218)
      If your website is important to your business, and is hosted somewhere, then by definition, the financial stability of that 'somewhere' is something you have to pay attention to.

      Just as with manufacturing, where not only do you source your parts, but you find a second-source for them as well, and also verify that THOSE sources are not using the same supplier... etc, etc. You find two sources that are as independent as possible, even going out to making sure the raw materials are coming from different parts of the world. Why? So a disaster somewhere along the line doesn't stop your business.
      Running a website is no different. You need to be able to move to a new location, or even have a second location set up already, in case of a problem.
    • and CHILLY this time of year but their business seems to be on solid footing (pun intended)

  • I guess this means (Score:3, Funny)

    by mrsmalkav ( 33086 ) <[lisa2006] [at] [travivi.net]> on Thursday September 27, 2001 @05:22PM (#2361035) Homepage
    that if Exodus starts selling some of their real estate, my living-in-a-colo dream will come true! Screw that living in a wired warehouse crap. I want my building to be ON the backbone and protected from the strongest earthquakes and bomb attacks, et al. Yeah! I'll be l33t!

    I swear, every time I went there and saw all the space that they were preparing during their expansions - I just wanted to grab a skateboard or some blades and just ride around. Either that or an office chair :) Ohhh the raised floors were smooooth and the room was so biiiig. *sigh*

    • genius! (Score:4, Funny)

      by alienmole ( 15522 ) on Thursday September 27, 2001 @06:18PM (#2361339)
      that if Exodus starts selling some of their real estate, my living-in-a-colo dream will come true! Screw that living in a wired warehouse crap. I want my building to be ON the backbone and protected from the strongest earthquakes and bomb attacks, et al. Yeah! I'll be l33t!

      You realize you've just given either Neal Stephenson or William Gibson the framework for their next novel.

      I can see it now, Hiro Protagonist will move from his U-Stor-It to the nearest Exodus IDC...

      • Exactly. But see, the problem w/ the difference between a living-in-a-colo dream vs the living-in-a-box-with-phatpipe is that it's not a cramped box filled with gear. I have always been inspired by Hiro and by Invisigoth ;) but they have small box-homes...

        my place would just be palatial. and enviro-controlled :D
        • You made me think what kind of people would live in Gates' house instead of him. Suppose he dies or can't afford it. Who would buy it? What for? Imagine it full of squatters.

          And by the way, would they find a sled named "Rosebud"?
  • I'm sorry that Exodus's iminent demise/re-org/whatever is probably going to put a bunch of people on the street, job-wise.

    I'm not sorry that one of the biggest havens for spammers on the face of the 'net is about to go flooey. I've got huge chunks of Exodus IP space in my domain's local 'Deny' list due to Exodus doing bupkis about their spammy customers. I wonder if I will soon be able to clean some of that out...?

  • I've seen it go from 64$ to 14 cents a share. My two cents? Down the drain. ;p
  • I posted this to /. two days ago and it was rejected. Jerks. They host Yahoo, eBay and Battle.net as well. Oh, to whoever's left playing Anarchy Online: yup, Exodus as well.
  • Note that filing for protection from creditors while reorganizing is not the same as hanging up a big "closed" sign...
    Technically, correct. But so were similar statements regarding Metricom (Richochet) and a host of other circling floatsam around the drain of the new economy.

  • We have hosted with Exodus for over two years (Score:4, Interesting)

    by Anonymous Coward on Thursday September 27, 2001 @05:50PM (#2361183)
    Forgive the anonymous bit, you'll understand why in a moment.

    We've hosted with Exodus for over two years. We're on the same contract we started with and have been using five times our bandwidth for half that time. We're still billed for our original amount! We should be paying tens of thousands of dollars more per month.

    Seeing some of the other posts here that are similiar, it's no surprise they are in trouble. They expanded too quickly but I think they should do okay in Chapter 11.

    Aside from the billing issue (which was fine with us) we have had awesome experiences with them.

    (DISCLAIMER: I own stock in EXDS)
  • I worked for a company that had 2 racks there. We moved all of our equipment from exodus to above.net, and every several months we would get a frantic call from exodus saying our machines were down! This happened half a dozen times, and each time we told them we had moved our boxes, and followed up with an email. The first time it happened it was funny, the next few times it was a little ridiculous.

    • Re:a comment on their support (Score:1, Interesting)

      by Anonymous Coward
      Exodus lost 2 of our (fully loaded) Sun E4500s from their loading dock. We argued for a while, and they ended up coughing up approx $500k when they couldn't find security tapes of the crime. I was amazed they didn't have insurance. Apparently the security manager had quit and left town a few weeks before. Guess he created his own severance package...

      It's not too surprising to me that they are on the rocks.

  • Don't buy the stock! (Score:3, Interesting)

    by Anonymous Coward on Thursday September 27, 2001 @05:53PM (#2361201)
    Note: I am posting this AC because quite a few Exodus employees know my /. account name.

    Exodus is screwed. They have been losing customers at an alarming rate for a variety of reasons, including:
    - The dotcom collapse. Exodus spent a fortune on these customers, many of whom never paid them a cent.
    - Customers that left due to dissatisfaction. This includes even Hotmail, who left Exodus because, well, they suck.
    - Incompetence. While Exodus had some incredible employees, they also had a LOT of terrible ones, a huge factor in the horrible network problems that Exodus customers have.
    -The GlobalCenter buyout. Exodus bought GlobalCenter from Global Crossing. After the merger Exodus pissed of numerous customers with their poor service, resulting in the loss of such big name clients as Verisign and Google.

    I have had some good talks with some important people at Exodus, and that company is SCREWED. Most of their datacenters are at least half empty, and many of the ones they built in 2000-2001 never had a single customer. If anyone is thinking about buying Exodus stock at low, low prices, DON'T.
    • Some times I'm amazed with the whole theory.. "people / companies who're in debt can easily get more money".

      I run a smallish website which does a few million pageviews a month, and more than breaks even. Yet, I've never had a hosting provider who did not ask for my credit card or payment upfront. Am I just stupid? (Ok.. lets not answer that question.)
  • How does one get a hand on the equipment after a company goes bust? I realize that it all ends up in an auction yard at some point and that most of the equip. at Exodus is not owned by Exodus and therefore will not be found at the swap meet anytime soon. However, the question is still valid. Where are the deals in used equipment?

  • Got Spammers? Protect them? Bankruptcy results. (Score:3, Informative)

    by strredwolf ( 532 ) on Thursday September 27, 2001 @06:20PM (#2361349) Homepage Journal
    Rob? Better look for a new provider! Exodus has been a spamhaven for some time. Here's the scoop: Spamhaus.org ROSKO entry, with full list of spammers and their spam, replies, etc. [spamhaus.org]

  • In defense of web hosting houses (Score:4, Informative)

    by Anonymous Coward on Thursday September 27, 2001 @07:39PM (#2361677)
    I'm a former GlobalCenter employee. Fortunatley I left the company before Exodus bought them off Global Crossing. I had worked for Global Center for about 2 years previously. I watched the data center I worked in grow from one suite to half the building it was in, to the entire building it was in, to adding 180,000 sq. feet down the street.

    Every time the company grew it was because the current space was either full or spoken for. In fact, while we were waiting for the 180,000 sq. feet to open we crammed cages in our existing building in places where we never would have before...next to AC units, around fire supression tanks, and even moved the NOC into the office to sell the space in the NOC.

    After we opened the 180,000 sq. feet the building began to fill up amid the rumors of an EXDS sale. Yet still everything seemed ok.

    The "buy, buy, buy" mentality really was justified. We had sold roughly 1/4 of the new 180,000 sq. feet 6 months before building completion. A building that large requires a _lot_ of network gear. A building that large requires a _lot_ of backup generator power. Many customers (especially financial type companies, of which GCTR hosted many) are very interested in bio-metric hand scanners, kevlar, etc.

    For quite a while there it seemed like we couldn't spend the money fast enough. But I don't think that's a problem suffered by the hosters alone. Every .com out that has gone bust is just as guilty as EXDS. We had foozball and pool tables, video games, and catered lunches. Just like every other .com out there. It was just the way that things were done.

    EXDS wasn't doomed by mismanagement, overspending, or anything else that people keep talking about. The problem is that a huge number of their customers went out of buisness themselves, and a majority of those couldn't pay their bills when they left. They expanded when they should have, but now they need to shrink.

    To stay alive EXDS should close a bunch of their empty data centers, sell off the extra gear, and use the money they make off that to keep operating. They do (or at least did) have a fairly decent number of large "name brand" customers who haven't gone out of buisness. That should help pay the bills for a while.
  • In my attractive one-bedroom flat.

    I have a DSL link!!
    x2 inbound bandwidth! Great for those sites that, er, you know, have lots of uploads and comments and stuff!

    ...Like Slashdot. CmdrTaco, bring me the servers. I'll set up IP_MASQ and we'll be up and running in no time. We'll show those bastards how to do hosting!
  • Check out savvis. Top notch service and a faster network than exodous.

    If they stay in business I have no doubts that they'll soon be one of the largest players around.
  • I hope Exodus stays open (I had a lot of clients collocate there, but then most of them are gone). I'd hate to see that pretty Andover/Slashdot cage go at Exodus in Waltham.

    Why the hell didn't VALinux take a shot of that and put it up somewhere? It was the best add for VALinux hardware I had ever seen. How many boxen is in that cage? 16 1Us? How many run slashdot? It was impressive to see in action. It was even more fun to surf slashdot during lulls--since I was 4 cages down working for the ill-fated Voter.com.



    I hope you guys have pictures to remember it by. But then, you might be sick of the cage (I got sick of mine pretty quick). They don't call 'em cages for nothing.

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