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."

Infrastructure

[First_In_Hell]

Those data centers have nothing to worry about. Some company is going to buy all of that infrastructure & equipment for pennies on the dollar. It makes sense for them to leave it as is and transfer the existing customer base. Why would they reinvent the wheel if everything is already in place? No need to panic.

C&W

[Stormcrow309]

It is an interesting problem that faces IT. The hospital I work at uses a mainframe on another site. We are planning to return it to on-site because we had downtime because the company moved their mainframe 'just because' from one side of Atlanta to another.

There is also the fun of who really owns your data? If the site just gets shutdown, how will you get data? (I know they should give it to you in tapes, but then you must find something they will work on.)

Something wrong with the numbers

[cgenman]

According to the article, C&W posted a net loss of 6.4 billion pounds on revenues of 4.4 million.

Either there is something wrong with those numbers, or the happy days of the internet boom are back!

From the article...

[AltGrendel]

"C&W was never able to really challenge the big U.S. players, such as WorldCom and AT&T and was losing a lot of money in this market, but it's still sad to see another competitor disappear."

They are competing against a big company that is already bankrupt and in protection in court.

Growing broke

[zptdooda]

"And we need to concentrate on those markets that are sustainable ... "

Sustainable here means that you're collecting enough revenue (cash is good) to pay for all the inventory you're building. The first sign of trouble is a cashflow shortage.

Unmanaged growth is a temptation that's caught so many telecoms. Maybe they were thinking of achieving economies of scale or putting too much weight in the "grow or die" paradigm. Or maybe their CEO's were making pride-based decisions.

It's human to be overly optimistic about a venture that you're starting. Business plans quite often anticipate large profits in the future to pay for current excess spending and growth.

There's a Burmese saying "Big tiger, big paws", the analogy being that a large entity needs a lot to keep it upright - has big expenses and maintenance needs. This is even more significant when it's growing.

my impression

[awb131]

Is that Exodus and other hosting centers are having trouble because they're players in a shrinking middle market for the business of hosters that are:

• Too big to use a dedicated host at a place like dreamhost or rackspace
• Not big enough to host their own data center, as most major corporations are starting to do

The price/capability ratio of dedicated hosts (probably Linux/BSD on x86 hardware with really fat pipes) is falling. The difference in total cost between hosting something at Exodus and just building a good server room somewhere on a corporate campus or two is falling. (Initial build-out is expensive, but property is a pretty safe place to sink money these days, plus you can expense it and keep expensing the depreciation.)

I'm not saying there's nobody that needs Exodus-type services, but it's mostly folks that don't fit into one of these other (growing) categories.

Good riddance, Clueless & Witless...

[Pig Hogger]

Good riddance. Clueless and Witless has been one of the worst spam supporters [google.com] that ever been.

Re:Infrastructure

[wik]

You might want to think twice before buying a losing business. Just because the upfront price is a bargin doesn't mean you won't be losing money through your nose.

Re:no customers == no money

[Sycraft-fu]

I dunno, some companies seem to make it work. Take Pair networks (www.pair.com) for example. They are a profatible bussiness, and have been for quite some time. All they did until receantly was house servers. They don't actually do colo, but they do something real similar. You rent a server form them which is dedicated to you. They own it and manage it (which is nice since it is their job to keep it secure, which they do real well) but it is all yours. They also do the normal shared server hosting as well. They have been operating for like 8 years now and making money doing it.

Obviously many, many companies got really stupid with the colo thing,b ut that doesn't mean there isn't a market for it, or something like it.

Re:right off the top of my list...

[Anonymous Coward]

WRONG WRONG WRONG.

With this news, do you honestly think the few remaining intelligent engineers are gonne stick around to perform these "seamless switches"?

Of course not, they're going to find new jobs and RUN.