Under the ongoing bankruptcy, which is likely to be finalised next month, 30 of Exodus' 48 hosting data centres will be sold to Cable & Wireless for about $575m (£401m) 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. Exodus is one of the world's largest Web hosting companies.
Although Exodus' hosting services are critical to its business, the software company 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 of Neoforma, which builds online healthcare supply marketplaces for customers.
But assuming that the bankruptcy court approves the sale of the data centres to C&W, 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 centres 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 Weather.com, said Exodus' bankruptcy filing was only one of several factors in his company's decision to switch to WorldCom for its hosting services just last week.
While Weather.com 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, Weather.com 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, 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 financial problems.
Bang has been using Exodus for about a year as a secondary hosting provider for redundancy purposes. The bankruptcy and sale of the data centres to C&W will not 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.