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The Internet Businesses

C&W Bails Out 220

Posted by michael from the last-one-out-turn-off-the-lights dept.
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."
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C&W Bails Out More

C&W Bails Out

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  • OOPS... (Score:2, Informative)

    by xanadu-xtroot.com ( 450073 )
    Another glitch in /. This is a subcriber posting...
    • OOPS... (Score:2, Informative)
      by xanadu-xtroot.com (450073) [slashdot.org] o xanadu@@@inorbit...com [mailto] on Thursday June 05, @10:14AM (#6124015 [slashdot.org])
      (http://slashdot.org/ [slashdot.org])

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

      --

      --

      irc.drirc.net #pranknet

      Need a CS Server for dirt cheap?

      [ Reply to This [slashdot.org] ]

      Starting Score: 1 point
      Moderation +1
      40% Informative
      40% Overrated
      20% Funny
      Total Score: 2

      SO basically we're seeing a fairly good discussion on slashdot and more importantly on the inner workings of the slashcode

      • I think this "breaking news" on slashdot is a sham, the only advantage is you get to put in your own two cents first.

        It's more so that you get to check out the articles/sites in the post before most others (read: you aren't affected by the /. effect). Discussion on the post can't start until the story is available to all (unless I'm missing something).

  • Not a whole lot left... (Score:5, Interesting)

    by chrisbw ( 609350 ) on Thursday June 05, 2003 @10:15AM (#6124026) Homepage
    C&W pulling out, UUNet/WorldCom not doing real well, BBN getting sucked up by GTE... not much of the original backbones left it seems. Wonder how long until the US Internet is just an interconnection of all the telcos?

    • Re:Not a whole lot left... (Score:5, Informative)

      by bourne ( 539955 ) on Thursday June 05, 2003 @11:06AM (#6124570)

      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!

    • Actually, It's looking like UUNet/Worldcom/MCI may make a run of it yet. They are correcting some of the accounting problems and coming out of bankruptcy with good positive cash flow. Of course, they ditched half their workforce to do it... but hey, whaddaya want?
      • whaddaya want?

        For the dot com/telecom stupidity to have never happened? There never was a 'new economy' - just a bunch of shiteheads yacking about something they knew nothing about...

    • Don't forget Group Telecom. Theve been in bankrupcy proceedings for most of the year.

      The real laugh is they once said "why would you want to go to a little player like peer1?" Were a big billion dollar international telco and aren't going anywhere and they are just a little player that can dissappear at any time."

      Now peer1 is left standing and GT is almost gone.

  • right off the top of my list... (Score:5, Informative)

    by redlum ( 27851 ) on Thursday June 05, 2003 @10:16AM (#6124041)
    A traceroute to google shows it's using cw.net and exodus.net

    This could be bad...

    • Re:right off the top of my list... (Score:4, Interesting)

      by rmadmin ( 532701 ) <{rmalek} {at} {homecode.org}> on Thursday June 05, 2003 @10:28AM (#6124174) Homepage
      Yes, it "COULD" be... but I don't think it will. C&W isn't just hitting the power switch. They'll migrate stuff. We were on C&W last year (ISP T1) and last year they sold ALL of their ISP accounts to New Edge Networks, (Which I must say is over priced, and the quality of service sucks bad!). Anyways, they are good about switching things over seamlessly, they just pick back places to sell your account to ;-(.
      • I guess YMMV, New Edge is a bit pricey but in all my dealings with them they were extremely helpful, I've worked for two ISPs that use them for DSL connections to customers.
      • That wasn't our experience, they just hit the switch on our LD...

        Their move to primus left us without inbound 800 service, and the people at Primus were less than helpful/clueful -- CNW totally dropped the ball,a nd Primus could not even find it to pick it up.

        We've been a CNW ISP client since last year, not migrated to newedge, and our rep is still pitching bandwidth as CNW today

        Bizarre to say the least
    • I wonder what Illiad [userfriendly.org] knows that we don't?

      And how about Slashdot?

  • Infrastructure (Score:5, Insightful)

    by First_In_Hell ( 549585 ) on Thursday June 05, 2003 @10:16AM (#6124046) Homepage
    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.
    • whenever anyone counsels us not to panic, panic is in fact the best course of action. If you'll excuse me now, I'm going to run around the room, flailing my arms about and screaming at the top of my lungs. Well, more then I usually do.

      Nothing to see here. Just move along. Ignore the smell of burning monkeys. Flood? What flood? Keep moving, you looky-loos.

    • Re:Infrastructure (Score:5, Interesting)

      by Phroggy ( 441 ) * <slashdot3@@@phroggy...com> on Thursday June 05, 2003 @10:45AM (#6124351) Homepage
      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.

      That's what I thought when my last place of empoyment went out of business - somebody would buy us and merge our network with theirs, or they'd just buy our 160,000 residential broadband customers, transition them to their network, and then dump us. Neither happened; the customers got screwed.
      • Someone would have bought it. You just weren't offering a low enough price. If you were, I would have bought it :).

        • Re:Infrastructure (Score:3, Insightful)

          by wik ( 10258 )
          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.

          • Seems to me like it wouldn't be hard to make money off a broadband company. If the business was losing money they were doing something wrong.

            Of course this "price" would have to factor in all the debt, including any mandatory payments to all the employees I would immediately fire. But even if all I could salvage past that was the customer list, that alone would be worth something.

      • Exodus' customers make them an attractive buy. Residential customers aren't all that valuable, since the wires are what really count in that market. As others pointed out buying Exodus' old datacenters from C&W would net you some pretty large customers like Google. The ability to convert those customers into larger services is probably high on average....
    • perhaps I am being very naive in terms of corporate accounting, but they are pulling out because they can't afford to continue running it all. Suppose they sell it all off to whoever happens to have cash these days (hmm. MS? err. is there anyone else?), do you suppose the new owner will keep the service levels going, or will they start to dump off the unprofitable bits (if they're not written off entirely), raise prices and sack more staff?

      C&W were losing $1m a day running those networks... the article
  • I distinctly hope it doesn't end up in the AOL/TW camp, after the media deregulation in the states that effectively lets them control the news.

  • This really doesn't make sense.... (Score:5, Interesting)

    by Desmoden ( 221564 ) on Thursday June 05, 2003 @10:17AM (#6124055) Homepage

    The reason Ellen and her gang couldn't keep this running seemed to be they kept building new data centers. Capital costs were HUGE.

    But C&W bought exodus. After the fallout. For very very cheap.

    How could they not make a profit off this? Is maintaince costs still so high even with no expansion? They were CLOSING data centers not buiding them.

    This worries me, because if after the initial build up is done, you still can't make money off a colo then that means prices are WAY too low and for the 2 or 3 colo's left, we are going to see prices sky-rocket to come up to meet expenses.

    Sad day.
    • "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.

    • Re:This really doesn't make sense.... (Score:5, Interesting)

      by Artifex ( 18308 ) on Thursday June 05, 2003 @10:48AM (#6124385) Journal
      How could they not make a profit off this? Is maintaince costs still so high even with no expansion? They were CLOSING data centers not buiding them.


      When they bought the data centers, they also bought all the contracts for leasing, etc., which probably run for several more years.

      Ask companies like Verio about the bloodbath when they shut most of their new data centers down, but were left with 5 or 10 year contracts for those spaces, sometimes in extremely expensive locations. A lot of the equipment, like the big chillers and the fire suppression systems, probably still hasn't been paid for, either.

      C&W is looking at with its data centers, I'm sure. Not to mention that they probably have a lot of fiber sitting dark (unused) right now, and lots more under contracts for less than the fixed costs. The salesmen for most of these carriers, by 1999, 2000 and 2001, undercut each other to the point where they were writing money-losing contracts, just to meet their quotas and get their commissions. And quite often, the contracts went to companies that then cancelled or went out of business when the bubble burst.
    • PSI had a similar problem. As I understand from a former employee they had soem gung ho iguana VP that bought up everythign in sight, fired all the local staff and then none of their imported people could run anything. And as you see they died an undignified death. Both PSI C&W were in the 'expand at all costs' mode of the 90's well after that wasnt gong to work.

      *foom*

    • First hand experience (Score:2, Informative)

      by 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. I

    • no customers == no money (Score:4, Interesting)

      by Doktor Memory ( 237313 ) on Thursday June 05, 2003 @11:37AM (#6124810) Journal
      It's very simple: there are no customers.

      I've walked around a bunch of the old Exodus datacenters in New York City: even the "older" ones (ie the former GlobalCenter colo on 8th avenue, and the original NJ1 at Exchange Place)) were like ghost towns: row after row after row of empty racks.

      The colocation "boom" of the 1990s was a pyramid scheme: VC-financed colo companies selling space at completely fictional rates to VC-financed startups. As soon as the venture money dried up, the small customer vanished...and then the big customers vanished...and then the behemoths themselves began to die off.

      No matter how much you cut your costs, you can't make a profit if you have no customers.

      My completely off-the-cuff guess is that even if C&W mothballed 90% of their colo facilities in the US, and all of their competitors (UUNet, AT&T, Globix, Level3) did likewise, there would still not be enough customers to keep them afloat. Colo is expensive, and there just aren't that many companies who actually need six-sigma uptimes. (Not that any of the colo providers ever came anywhere near their promised reliability numbers in practice, but that's a whole different rant.)
      • 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.
    • Part of the problem is that data center usage is shrinking. And no, it's not just the dot.bombs going away. A 1RU server today is much more powerful
      than a 4 RU server of just 2 years ago. Many companies have been able to reduce their footprint while increasing their processing power. Add to this the costs to air-condition and power this denser-than-planned expansion, and the data centers are having a tough time.
    • This is -precisely- why I keep scratching my head when I see folks advertising "CoLo $100/mo no bandwidth limit!". There's absolutely -no- way they're making money. At -all-. An OC3 runs 12-15 thousand a month, minimum, now imagine a company that has 10 datacenters with 4 or 5 of those into -each-, and each one has multi-million dollar security systems, 3 dozen employees, etc.
      I can easily see C&W losing a million bucks a day.
      It's kinda funny. Folks have been saying for -years- that my previous emp
      • Lousy service, crappy connectivity...they were my host's facilities (they wisely moved) and they were constantly having problems. If they are one of the leaders, I really haven't got much hope for the sector.
      • An OC3 runs 12-15 thousand a month, minimum, now imagine a company that has 10 datacenters with 4 or 5 of those into -each-, and each one has multi-million dollar security systems, 3 dozen employees, etc.
        I can easily see C&W losing a million bucks a day.

        The data center at which I work has fewer than 20 employees, we're at about 20% of capacity, and have a few OC3 connections and a couple dozen individual DS1 connections, though we have something like another 14Gbps of dark fiber, which we light up onl

  • They've been working on this for a while now (Score:2, Interesting)

    by Anonymous Coward
    Back at the end of last year, we were alerted that C&W was selling their customers to New Edge Networks. Not happy.

    • Re:They've been working on this for a while now (Score:4, Informative)

      by gothic ( 64149 ) on Thursday June 05, 2003 @11:02AM (#6124509)
      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.

  • No! (Score:5, Funny)

    by mao che minh ( 611166 ) * on Thursday June 05, 2003 @10:17AM (#6124065) Journal
    My god, will someone please think about the porn!?!

    (all the porn that will be lost in those defunct datacenters)

    We must establish a plan of action, and organize to save the porn.

  • C&W is in the red, so to speak, hence the red bars!

  • Quick... (Score:5, Funny)

    by PS-SCUD ( 601089 ) <<moc.oohay> <ta> <ttocsnamronretep>> on Thursday June 05, 2003 @10:19AM (#6124077) Journal
    Someone get a list of sites on their servers, so we can Slashdot them as a fairwell gift ;-)

  • C&W (Score:5, Insightful)

    by Stormcrow309 ( 590240 ) on Thursday June 05, 2003 @10:19AM (#6124080) Journal

    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.)

    • Re:C&W (Score:4, Interesting)

      by El Pollo Loco ( 562236 ) on Thursday June 05, 2003 @10:22AM (#6124116)
      That is true. I work for the government. There are policys in place which require a investigation into where the data is being stored. As in, there has to be a really good reason why any data is stored offsite, and not just because it's easier.

  • Something wrong with the numbers (Score:3, Insightful)

    by cgenman ( 325138 ) on Thursday June 05, 2003 @10:19AM (#6124082) Homepage
    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!

    • Re:Something wrong with the numbers (Score:5, Informative)

      by Tim C ( 15259 ) on Thursday June 05, 2003 @10:21AM (#6124103)
      The £6bn loss includes write-downs on the values of some of their purchases; they haven't actually lost that much cash.

  • This could get ugly (Score:4, Interesting)

    by saintjab ( 668572 ) on Thursday June 05, 2003 @10:19AM (#6124086) Homepage Journal
    I know C&W controls a lot of connectivity throughout the US so this could be huge for a lot of corporations. It says they will honor their SLAs until they decide upon further action, but how well will they uphold the SLA? And more importantly does this come with a huge reduction in staff, as I would assume it will, and how can they uphold SLAs that are already being strained. Hopefully this will not result in any major down times. The beauty of the internet is its ability to adjust routes and optimize connections but loosing a big backbone provider could result is some serious revenue loss for some businesses.
    • It says they will honor their SLAs until they decide upon further action, but how well will they uphold the SLA?

      This should not impact their service level in any way. I have 2 C & W T1s. In the last 7 months I have experienced 9 outages 2 were planned and 7 (over four months) were attributed to a guy in Ok with a back hoe. Additionally when C&W put in those T1s it took them 8 months to get the service up and running. SLAs are just a means to trap their victims it does not impact what they need to

  • Another Blow to Internet Stocks (Score:2, Interesting)

    by Anonymous Coward


    How large U.S. Internet customers with international operations, such as Yahoo and eBay, will respond to the shutdown remains to be seen, said Sandra O'Boyle, an analyst at the Amsterdam, Netherlands, office of Current Analysis. "There are still enough service providers in the U.S., although the number of international providers is dwindling," she said. "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 stil

  • C&W disappears? (Score:5, Funny)

    by UnknowingFool ( 672806 ) on Thursday June 05, 2003 @10:22AM (#6124114)
    What's next rap? Heavy metal? Opera . . . well, it was never that popular.

  • Pulling out completely? (Score:4, Informative)

    by Phroggy ( 441 ) <slashdot3@@@phroggy...com> on Thursday June 05, 2003 @10:23AM (#6124128) Homepage
    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.
    • 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 fo

  • Looks like Slashdot will be moving... (Score:5, Informative)

    by MrBadbar ( 168841 ) on Thursday June 05, 2003 @10:29AM (#6124180)
    According to Netcraft [netcraft.com], slashdot.org itself is using IPs owned by C&W.
  • I can't wait for the day that I can lose almost $10 billion (that's 9 frickin zero's) two years in a row, and still be capable of 'restructuring'.

    On a similar note, a Trivial Pursuit question the other night said that some crown prince of Brunei spent $16 billion in one year. Had to get a gold plated toilet brush, among other things.

    Which is a better waste of money? Just curious.
    • most of that was a write down of good will. They basically bought things with their stock and it goes on the books as if it were like a cash purchase (over simplification). Now that the 'value' of those assets are seen to be, well, little, they have to take a non-cash charge - the assets are written down, and at the same time so is stock holders equity (or lack thereof!).

    • I can't wait for the day that I can lose almost $10 billion (that's 9 frickin zero's) two years in a row, and still be capable of 'restructuring'.

      They're just bailing out of the states if I read this correctly.

      I used to have a T1 with them in the carribeans, and although I had shitty service, no QoS, no support outside business hours, and no reliability (which were all in my contract... But then again, who are you going to sue ?) they still managed to charge us 25K US$ a month for a T1... So I said, I

  • Mae-East (Score:5, Interesting)

    by skyryder12 ( 677216 ) on Thursday June 05, 2003 @10:38AM (#6124267)
    Isn't Mae-East located in one of the C&W buildings in the Tysons Corner, Viriginia, USA area? I thought that was where the NSA had installed all of their Echelon sniffers. I bet there is some real back room skullduggery going on if this is true.....

    • Re:Mae-East (Score:5, Informative)

      by TheSync ( 5291 ) on Thursday June 05, 2003 @10:56AM (#6124448) Journal
      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.

  • Growing broke (Score:3, Insightful)

    by zptdooda ( 28851 ) <deanpjm@gmai l . com> on Thursday June 05, 2003 @10:38AM (#6124271) Journal
    "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.

  • What? Did anyone else read that too? Then I hear they're throwing in the towel. That's not balls out. Lightweights.

  • my impression (Score:5, Insightful)

    by awb131 ( 159522 ) on Thursday June 05, 2003 @10:43AM (#6124324)

    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.

  • cw.net was last updated in the 70th... (Score:4, Funny)

    by CodeMaster ( 28069 ) on Thursday June 05, 2003 @10:51AM (#6124404)
    Check out their corporate site cw.net [cw.net].
    The footer at the bottom says:

    © Cable & Wireless, 2003
    Updated January 1, 1970 GMT
    IE Webmaster: webmaster@cw.net
    Talk about staying on top of things...
    • I clicked on the "Whats New" on cw.net and then did a double take when I saw "New Jobs are Available".
      Then I noticed that the last time they updated that section was June 11 2000.

  • Clueless (Score:3, Interesting)

    by eludom ( 83727 ) on Thursday June 05, 2003 @10:55AM (#6124437) Homepage
    The article in todays' WSJ (sorry, no link,
    I read the dead-tree version) cited the
    basic problem in the telco industry as being
    overcapacity, but then goes on to quote
    the C&W prez as saying that they're going
    to try to resell excess capacity to make
    up losses.

    The're also going to try to "hang on to
    existing revenue streams" while exiting
    the US Market (so, exactly what valuable
    assets are you selling, and who, exactly
    is buying ?)

    Also says that the blulk of their revenue
    comes from web hosting...there's a winning
    1998 market (I just left a large recently
    renamed telco doing securtiy for web hosting).

    It's corporate "leadership" without a clue.

    ---eludom

  • Good riddance, Clueless & Witless... (Score:4, Insightful)

    by Pig Hogger ( 10379 ) <.moc.liamg. .ta. .reggoh.gip.> on Thursday June 05, 2003 @10:57AM (#6124454) Journal
    Good riddance. Clueless and Witless has been one of the worst spam supporters [google.com] that ever been.

  • no surprise (Score:2, Interesting)

    by Anonymous Coward
    I once worked for a company that used Digital Island (and then Exodus) for a lot of our media streaming needs. You could see the breakdown several months before C&W came in. Even after terminating our account (we owed them several hundred thousand through no fault of our own) and weeks of nasty phone calls, we were still able to walk into the data center where we were co-located and pick up about 10K worth of hardware.

    They even had boxed it all up nicely for us. You'd think they would want to hol
    • ... and weeks of nasty phone calls, we were still able to walk into the data center where we were co-located and pick up about 10K worth of hardware.

      Legally, they were required to let you come in there and remove your equipment. They cannot hold your equipment without authorization (criminal) because of a billing dispute (civil). A former client of mine was threatened in this manner once, and he simply said he would be down at the data center with the sheriffs deputies within a few hours. When he got

  • No Suprise Here (Score:5, Informative)

    by Anonymous Coward on Thursday June 05, 2003 @10:58AM (#6124463)
    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.

    • This is argument #1 for increasing stock dividends. By reducing the capital available for personal empire building by management (and instead allowing stockholders to do that), this sort of stuff is a lot more difficult.

  • My spam traffic will probably drop in half with those bozos off the internet. Good riddance!

    Michael

  • Worst company ever (Score:2, Interesting)

    by finder ( 69621 )
    I used to work for them three years ago...needless to say it was already a sinking ship then and I'm glad I got out when I did.
  • How frickin' hard is it to make money in their line of business? You're providing something that almost every business and individual in the western hemisphere wants ... how can you blow that kind of opportunity?

    I suspect this has more to do with shitty management and "expand at any cost" business practices than a failure of the actual market.

  • University of California (Score:2, Informative)

    by nek ( 534149 )
    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.

  • Poor C&W (Score:2, Interesting)

    by ethaz ( 413842 )
    They bought MCI's original network after MCI had to sell it when they acquired UUNet. They didn't realize they were doing business with thieves. MCI/Worldcom promptly violated their no-compete, no-poach agreement by bidding to replace C&W (i.e., Old MCI) pipes with UUNet pipes within months of the deal. There were also all sorts of problems with shared MCI/C&W facilities.

    Yet another reason that it should have been Bernie Ebbers and John "The Internet Doubles Every 90 Days" Sidgemore in handcuffs ye

  • It's easy to lose money ... (Score:5, Interesting)

    by johnlcallaway ( 165670 ) on Thursday June 05, 2003 @11:14AM (#6124650)
    ...when all of your data centers are unoccupied by paying customers.

    I used to work for a customer of Exodus/Cable Wireless, and saw the exodus from Exodus. I remember the boom years when I only went in on Sunday because that was the only day I could get a parking spot and not have to park across the street. I remember when you could see Dell and Compaq and Gateway and Sun systems in every cage, wall to wall. When you could sit in your cage and have conversations with two or three other customers and learn some really neat stuff. Where the soda and chips were only 25 cents. Where security walked you to your cage and unlocked it for you.

    The last few years saw the datacenter become a ghost town. Granted, it was a 62 degree ghost town, but still a ghost town. Where every cage around ours became empty, and we even went from a full cage to a half cage thanks to faster and smaller equipment. The parking lots are never full, soda and chips are now priced the same as everywhere, and no one to talk with. And now security gives you the key to your cage and you walk past rows of empty plastic-coated wire mesh cages.

    How do you lose money?? Because you have to run a gazillion foot data center, with all of it's associated infrastructure needs, and you don't have any customers in it. Compare it to the cost of running an apartment building if it is only half occupied. There are still maintenance costs, but now you only have half the tenants to cover it. You still have to heat and cool the empty apartments, although not the same as the rest, and you have no one to pay for it.

    Don't get me wrong though. I loved the facility. It was clean and well maintained. I could get away from the home office and work without being interrupted. I didn't have to worry about AC and power and network outside of our cage. If C&W was still a viable company, there would be no hesitation about using them for a data center.

    But the 90's are over ...

  • A classic case of mismanagement (Score:5, Interesting)

    by cat_jesus ( 525334 ) on Thursday June 05, 2003 @11:18AM (#6124681)
    I worked at CWUSA from 94 to 2001 and I have been predicting their demise for years now. Around 96 the executives were complaining that they were only making 3 cents of profit for every 6 cent call. Having had experience in a mature sector(retail) I recognized immediately that they were spoiled by huge margins. I knew that once the telecom industry became saturated and they actually had real competition that they would either adapt or change. Management did change but instead of concentrating on their core business, telecom services and custom billing for small businesses(which brought them to the Billion in rvenue mark), they decided to buy MCI's crappy internet backbone and become an internet company. Nevermind that they had no experience in this market and the executives didn't know what they were buying. Internet was sexy and they could market that much easier than boring old long distance. Their long distance service was an incredible cash cow.

    New offerings were brought up and provisioning and billing systems were rushing into place(sometimes). Often a new product would have to be provisioned manually and there was no way to tell if a customer wasn't paying their bill for well over a year after they first started selling the product.

    Then to top it all off the mothership(PLC) decided they were going to become a global organization and they ended up picking up the biggest inept blowhards in CWUSA to help create the global organization. While all this was going on they were still having their yearly layoffs, which they did even when they were making a billion a year. Management would lay off the workers and keep the management around. It was not uncommon to know of managers and directors with no people.

    Not long after I left they decided to lay off all the techincal people and outsource the work to IBM. Many people were gone for good and many were tranferred to IBM. But the funniest thing about this grand plan was the first task of the plan-- assign a senior management team to organize the layoffs(to them management teams were the "magic pixie dust"). Those people were so management happy that they have a few building in Vienna Virginia stocked with managers, senior managers, director and AVPs that are quite adept at bullshitting, creating powerpoint documents and dodging bullets but they can't manage a damn thing. I could write for hours about the shenanigans that went on in that place but I'll just end with something an old relative who has been a businessman since WWII told me. "Anyone can make money when times are good, it's when times are tough that you find out who the real businessmen are." They were poseurs and it was only a matter of time before their hubris coupled with reality bite them in the ass. The sad thing is these same losers will end up getting nice cushy management positions at Verizon, Worldcom or AT&T and probably for more money.

  • C&W Leaving US Been Coming for quite some time (Score:5, Interesting)

    by sjvn ( 11568 ) <sjvn@@@vna1...com> on Thursday June 05, 2003 @11:38AM (#6124820) Homepage
    The signs were theee in the fall of last year. I wrote about it, and why hosting businesses tend to fall part, earlier this year.

    http://www.practical-tech.com/network/n04172003. ht m

    Long story short, stupid business plans and lousy management equals failure. C&W's US business had both in spades. The real question, from where I sit, is will C&W continue to survive in the UK? That was unthinkable only a few years ago, but they've made so many bad moves recently and bleed out so much capital you really have to wonder.

    Steven
  • They used to be at DigitalNation, now known as NTT/Verio... Time to move again?

  • Letter from C&W (Score:3, Informative)

    by Anonymous Coward on Thursday June 05, 2003 @12:44PM (#6125347)
    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.

    ---
  • Clueless & Witless is giving up? Woo-hoo! Ding dong, the witch is dead!

  • From the Infoworld story:
    C&W has been on the retreat in the U.S. since September 2002...

    Maybe longer than that. It so happens that C&W was my first ISP, known as CWIX. About four years ago, though, they decided to get out of the ISP business and my account got sold to Prodigy. CWIX was a decent ISP, whereas Prodigy blew. The strong may survive, but it doesn't mean they provide better service.

  • 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 bre
  • I was once a residential cable internet customer of a company called Smyrna Cable. While I was their customer, they were bought out by Charter Communications. My last few bills had the Charter logo on them. However, my personal web page and email address remained under the smyrnacable.net domain. I cancelled my account when I moved out of their service area almost a year ago.

    I've been checking my old email address periodically just in case someone tries to contact me there. A couple weeks ago I finall

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