Exodus From Exodus

Last Wednesday, in a conference call with customers, Exodus CEO William Krause made a surprising statement. "To the best of my knowledge, Exodus has not lost a single major customer in the last two months," said Krause.

Brave talk. But the customer-rentention reality appears to be less rosy for Exodus, despite the Cable & Wireless deal announced Friday. Weather.com, a major customer by any standard, said publicly yesterday that it had shifted from Exodus to WorldCom. Company officials cited concern about Exodus' financial viability as one factor in moving their 120 servers. The move was completed in mid-November.

Other Exodus customers appear to signing new hosting deals, so they at least are spreading their risk. Bay announced Tuesday that it had "expanded" its web hosting operation to a Sprint E|Solutions center "outside the Santa Clara Valley." According to Bankrupt.com, NextCard - one of the Internet's largest advertisers - is trying to end its hosting relationship with Exodus rather than migrate to another data center.

Then what about Microsoft, another high-profile Exodus client, which recently chose XO Communications to host its bCentral small business web services operation. XO said it migrated the services' 1.6 million customer accounts from another unnamed provider.

No one should be surprised that these major companies are taking steps to insulate themselves from Exodus' vulnerability. His rose-colored glasses aside, it's hard to fault Bill Krause, who has worked quickly to take steps that should have been made many months ago. It's not yet clear if it will prove to be too little and too late.