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Exodus Files For Chapter 11 Protection
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).
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'll bet HSBC are pretty p*ssed - they're owed about $2 billion.
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.
RateVegas.com - Vegas Reviews
... 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.
... buy monopolies like underwater sea cables.
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
LL
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.
...but it's being eaten...by some...Linux or something...
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?
Yes, it's a blog. Sorry if that offends you.
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.
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.
Legalize the constitution. Think for yourself question authority.
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)
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.
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.
Actually most of the bullet proof glass, security guards, and kevlar are for insurance purposes. A large bank or large financial company needs curtain security in place to get the insurance they need. At least that's what a sales guy said on a tour of Boston2(where /. is). I walk by slashdot's cage every day and I don't think I've seen anyone in there yet.