December 19, 2001
There's an old saying that March "comes in like a lion, and goes out like a lamb." In the data center realm, that saying could apply to Relera, which launched in January 2000 with $300 million in venture capital backing and an ambitious plan to offer managed hosting services in 25 secondary markets.
Partnerships with Exodus and Level 3 gave the Denver-based newcomer further credibility. In the first six months of 2001, as the rest of the colo/IDC industry was hunkering down for lean times ahead, Relera opened 11 data centers. But the managed hosting initiative proved more expensive than anticipated, and in August Relera announced it was cutting 83 percent of its staff and exiting the managed services sector.
Now Relera seems to have dropped off the radar screen. Its web site has been deactivated, and many key employees have moved on to other companies. There's been no bankruptcy filing, but there don't appear to be many signs of life, either.
December 06, 2001
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.