C&W Bails Out

norskode writes "Not much to go on yet, but it seems that Cable & Wireless is bailing out of their US operations. This is a big provider of IP pipes, and they run the data centers they bought from the failed Exodus folks. There are a LOT of sites that live in their data centers, but no word yet on the disposition of those facilities."

OOPS...

[xanadu-xtroot.com]

Another glitch in /. This is a subcriber posting...

right off the top of my list...

[redlum]

A traceroute to google shows it's using cw.net and exodus.net

This could be bad...

Re:Something wrong with the numbers

[Tim C]

The £6bn loss includes write-downs on the values of some of their purchases; they haven't actually lost that much cash.

Pulling out completely?

[Phroggy]

C&W does a wide range of things in the US, including operating colocation facilities, providing connectivity to businesses, operating dialup POPs, and running a major backbone. As a whole, these operations are losing $1 million a day (according to the article), but is it possible that one or two of them might actually be profitable? Will C&W completely pull out of the US, or will they keep a much more limited presense?

Another thing: will some operations be sold to other companies (and their customers transferred without loss of service), or will everything be turned off and each piece of equipment sold to the highest bidder?

I doubt anyone has the answers, but these are my questions. :-)

Do I remember that Slashdot is/was hosted by Exodus? I'm too lazy to investigate.

Looks like Slashdot will be moving...

[MrBadbar]

According to Netcraft [netcraft.com], slashdot.org itself is using IPs owned by C&W.

Re:Mae-East

[TheSync]

MAE EAST isn't really just a "place" any more, it is more of a concept, and exists in several places. MAE EAST is operated now by MCI.

I remember seeing it when it was a small room in an underground parking garage. Net techs left their cans of Mountain Dew in the corner.

Today MAE EAST ATM service is avalable in Vienna, Reston, and Ashburn. It has ceased to really be one room, one floor, or even just in one building.

Near the original MAE EAST is also a major AboveNet (now MFN) collocation facility. That is where Geeks in Space: Slashdot Radio [thesync.com] used to be served from.

No Suprise Here

[Anonymous Coward]

As a current C&W employee..

I have to say there really isn't any suprise to this. While its hard for any business to make a profit off of low-margin web-hosting, C&W was an ill-suited company to try and do so.

During the past ~2 years since it acquired both Digital Island and Exodus, C&W business model has been to lay-off people who knew what they were doing, and promote those who didn't (usually to the VP level).

The whole business is run by a very top-heavy management structure who have no interest whatsoever in doing what is good for the company. Instead upper management have only been concerned with building their own empires, even if duplicate functions existed elsewhere in the company.

There is only so long a company can exist with such an attitude, and C&W has hit the end of the road.

Re:They've been working on this for a while now

[gothic]

You must be in my general area.

C&W cancled the remaining three years of our contracts on our lines (Which they also stated they could do with no repercussions), and told us to either find a new provider or sign a contract with New Edge Networks.

Everyone in our company throught C&W was going to get sued for the contract thing. I wonder if any other companies have thought about it.

They didn't leave us much time to get new lines in. I'm really grateful for the work AT&T pulled for us. Based on all estimates, we were going to have our new Ts in only days (2 at most) before C&W pulled our old lines. Not much time to might 9 Class C's of DSL customers, dial-up users, and dedicated T customers.

I am now left with a very bad taste on how NewEdge treated us ("No, you *have* to sign at least a 1 year contract, we can't give you any less, because that's the deal we have with C&W" -- Each T1 from NewEdge was over 1100$ a month..Not a good deal), and how C&W treated us. Given the choice, I'll never do business with either one of them again.

Re:Not a whole lot left...

[bourne]

BBN getting sucked up by GTE...

Keep up, will you?

BBN got sucked up by GTE (after briefly instantiating as BBNPlanet); GTEI then got acquired by Bell Atlantic, which then devolved into Verizon and Genuity. Genuity has now been acquired by Level 3.

Next week, Ramirez, long thought dead, will turn up and lay his claim to L3's heart!

University of California

[nek]

When I worked at the University of California (up till July 2001) C&W supplied the bandwidth for the entire UC system, except for Internet2. I wonder what kind of scrambling happened between then and now, as it appears that the UC System [ucsc.edu] is now on Qwest.

First hand experience

[Anonymous Coward]

Not sure how the situation is in the U.S., but Exodus Tokyo is, well, pretty freakin' empty. C&W bought them, for a quite cheap price actually, and decided to use Exodus as a "premium service" since C&W already had some nice datacenters near by. However, the costs were STILL prohibitive, and as far as I could tell (by walking around the floors I had access to pre/post Chapter 11, up to a few months ago) there are rows of cage space after cage space that never have, and still have, no occupants. It's really weird to see this "Matrix Ammunition Depot" looking baren area, with an EMC monster sitting alone in a single cage.

I checked the power supply/regulator and the load was around 5%, so they basically have massive redundant equipment along with airconditioning (which chilled the hell out my ass May last year when I was stuck there for a few days, thank you very much) that eats up a lot of power for no particular reason other than to cool off a bunch of nothing (+ my hot ass). I'm sure that's just a small part of the "un-necessary" running costs involved.

Add that to the fact that they (relatively) recently sold off Global Online (the ISP division that was originally acquired as a "foot in the door" when Exodus originally landed in Japan) which was actually profittable, and things start to fall into perspective. I wouldn't be amazed at all if C&W bails out of Exodus Tokyo soon too. (As if there haven't been rumors about this for quite some time.)

Re:Pulling out completely?

[ericesposito]

I have been speaking with the C&W staff regarding this. In November, they closed down a number of under-used datacenters, moving customers into other C&W owned facilities. The Waltham, MA facilities are profitable, and quite full. (I've been to Boston 2 just recently, and it isn't empty.) They lost very few customers when they did this consolidation, which speaks well for them. Part of the problem is that the British stockholders are not comfortable in this market. It isn't what C&W was founded upon. They don't really know how to do it efficiently. Another problem, like another post mentioned, is that they are paying leases on empty spaces, some of which were leased during the boom. They are paying premium money for empty buildings. As those leases terminate, their balance sheets will look better and better. Their data centers aren't going anywhere. They are the largest hosting company in the US. (24 data centers AFTER they closed a bunch in November 2002.) Their Washington, DC facilties are nearly full. They are actually looking to get more space in that area. Their hosting customer list is very enviable -- 70% of the Fortune 500. They currently have a number of potential buyers doing due diligence. They won't go into details, yet, though. I am a little bit concerned, but any problems in the transition will be obvious fairly quickly.

Letter from C&W

[Anonymous Coward]

We got this letter from our account rep at C&W this morning.

---

I'd like to take this opportunity to summarize Cable & Wireless' =
announcements today. I look forward to discussing this with you in more =
detail and please either call, or let me know a good time to reach you. =
The recent speculation in the media may have been unnerving to you and =
other customers, and we're excited to deliver our message today. I want =
to assure you that our business is not going away, and there is no need =
to seek an alternative provider for your services.

The bottom line is that C&W PLC intends to withdraw from the US market. =
CWUSA is a composite of three primary, and incredibly valuable assets =
including Exodus, Digital Island, and the former MCI Internet Backbone. =
CWUSA has made excellent progress against our November 13 =
re-organization announcement, however, the internet centric business of =
CWUSA does not fit with CW PLC's new strategic focus on national telecom =
companies with strong positions in their primary markets.

C&W PLC will continue to fully fund and support CWUSA until a buyer or =
investor is found for the business. There are no new changes to US =
headcount, or data center facilities, aside from reductions that were =
outlined in our November 13 re-structure announcement. We, as well as =
you (I'm sure) hope for this to be a swift transaction.

Frankly, for myself, and my US colleagues, this presents an =
extraordinary opportunity to grow a new brand on our strengths of the =
combined legacy industry leaders, and continue to provide you, and all =
our customers with exceptional service, and a range of product offerings =
that is unparalleled in our business.

---

Re:Open Relays

[forkboy]

Having sat on the receiving end of an abuse mailbox, I can tell you it's not THAT expensive to police.

I worked for Inflow a few years ago as part of the team that does firewall and VPN services for their clients. They had 2 of us alternating coverage of the abuse box. It resulting in a couple extra hours a week of work for the both of us, but there was really no added cost for Inflow. Customers were made to sign a contract when they came in stating that they would not spam, run illegal web sites, etc. If they were found to be in violation, they started with a warning from us. If they didn't correct their action within 3 days, their internet service was turned off. (And by contract they were still compelled to pay for it)

A well written term of service contract and a couple nerdy security guys is really all it takes to manage abuse.

That started this a while ago

[joeblowme]

The started bailing out a while ago. I got 22 days notice that they were turning my pipes off like 3 months ago. 22 days is about impossible to get a new pipe installed and running. Bigger problem was that Cable and Wireless didn't even give me the 22 days, they gave me 17 days before taking my pipe down. Thankfully the good people at Time Warner Telecom took care of me and got my lines up early and I was only down for like 4 hours. Needless to say we have lawsuits pending against cable and wireless for breach of contract.

Nice going, Ellen!

[Anonymous Coward]

Ahhh, another company damaged by Ellen Hancock.

• IBM's PRGS ("Programming Systems") Laboratories, of which she was the overall manager
  
• Apple Computer Corp [com.com], as the right-hand of Gil Amelio
  
• Exodus Communications [businessweek.com], where she was CEO
  
• Global Crossing, the poor sots that ended up with 108 million worthless shares of Exodus [globalcrossing.com]
  

and now,

• Cable and Wireless, another batch of poor sots that bought parts of Exodus
  

So, what other companies and organizations are on the watch-list?

• Aetna [aetna.com]
  
• Colgate-Palmolive [colgate.com]
  
• Marist College [marist.edu]
  
• Santa Clara University [scu.edu]
  

Disclaimer: Well, duh ... of course I am a disgruntled ex-employee of Ms. Hancock back when she was a IBMer. I just did not realize how bad she really was ... even if none of this was her fault, she has still been at the epicenter of many closed office buildings over the years.