Aug, 2001 : Gartner Research Warns Exodus Customers Mike Drach
📅 - Exodus customers should begin to consider alternative hosting options if the company's financial health continues on its downhill path, according to Gartner (gartner.com), a leading Connecticut-based research firm.
In a report issued last week, Gartner research analyst Ted Chamberlinpointed to Exodus Communication's overspending, ill financialoutlook, as well as general dot-com industry struggles, as an indicator thatthe company may not survive much longer. However, Chamberlin stressed thatcustomers should not immediately and completely give up on Exodus, butmerely consider their options if the situation continues to worsen.
"We're not giving (customers) reason to panic and run out of Exodus' datacenters," Chamberlin told searchWebManagement in an interview, "becausewe're not really starting to see the quality of service drop."
The report was issued just a few days before the communications giantannounced its second-quarter results, which reported a net loss of over $583million, as well as a second round of layoffs, bringing the total to 1200job cuts in just over two months. Gartner says Exodus' cash woes stem from an overly ambitious growthstrategy, which last year included several large acquisitions and theconstruction of at least six new Internet data centers around the world.
Chamberlin said the company was unable to successfully make the transitionfrom a pure co-location service provider to a managed hosting business. Healso noted that Exodus' service quality has slipped in several locations,and that customers ought to watch out for further signs that its service hasdeclined. However, Chamberlin is not concerned with the recent layoffannouncements, as he believes Exodus' staff has been bloated for too long.
"We're not saying not to engage Exodus. They're having a tough time rightnow, but they still deliver collocation well," said Chamberlin. Gartnerbelieves that the company will not be able to climb out of its rut withoutsome kind of outside help.
Accordingly, the Gartner report gave advice to enterprises currently usingExodus' services, which are listed below:
Examine contracts for exit clauses and transition assistanceallowances.Develop a service transition strategy that allows for less than 4hours of overall downtime.Build requests for information and requests for proposals to solicitservices from other providers.Evaluate contract renewal terms and conditions carefully.Enterprises should agree to short-term renewal (e.g., no longer than 12months). Ideally, month-to-month contracts are safest if pricing terms aremarket rates.Monitor service-level agreements to ensure that customer support, response time and resource availability are in compliance.
Related Articles: DATA CENTER CONTINGENCY PLANS
In a report issued last week, Gartner research analyst Ted Chamberlinpointed to Exodus Communication's overspending, ill financialoutlook, as well as general dot-com industry struggles, as an indicator thatthe company may not survive much longer. However, Chamberlin stressed thatcustomers should not immediately and completely give up on Exodus, butmerely consider their options if the situation continues to worsen.
"We're not giving (customers) reason to panic and run out of Exodus' datacenters," Chamberlin told searchWebManagement in an interview, "becausewe're not really starting to see the quality of service drop."
The report was issued just a few days before the communications giantannounced its second-quarter results, which reported a net loss of over $583million, as well as a second round of layoffs, bringing the total to 1200job cuts in just over two months. Gartner says Exodus' cash woes stem from an overly ambitious growthstrategy, which last year included several large acquisitions and theconstruction of at least six new Internet data centers around the world.
Chamberlin said the company was unable to successfully make the transitionfrom a pure co-location service provider to a managed hosting business. Healso noted that Exodus' service quality has slipped in several locations,and that customers ought to watch out for further signs that its service hasdeclined. However, Chamberlin is not concerned with the recent layoffannouncements, as he believes Exodus' staff has been bloated for too long.
"We're not saying not to engage Exodus. They're having a tough time rightnow, but they still deliver collocation well," said Chamberlin. Gartnerbelieves that the company will not be able to climb out of its rut withoutsome kind of outside help.
Accordingly, the Gartner report gave advice to enterprises currently usingExodus' services, which are listed below:
Examine contracts for exit clauses and transition assistanceallowances.Develop a service transition strategy that allows for less than 4hours of overall downtime.Build requests for information and requests for proposals to solicitservices from other providers.Evaluate contract renewal terms and conditions carefully.Enterprises should agree to short-term renewal (e.g., no longer than 12months). Ideally, month-to-month contracts are safest if pricing terms aremarket rates.Monitor service-level agreements to ensure that customer support, response time and resource availability are in compliance.
Related Articles: DATA CENTER CONTINGENCY PLANS
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