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Commentary: A bleak trek to deliverance

On the heels of internal overspending, dot-com failures and an overly ambitious expansion, Exodus Communications is struggling to survive its ill financial health.

    By Ted Chamberlin, Gartner Analyst

    On the heels of internal overspending, dot-com failures and an overly ambitious expansion, Web hosting company Exodus Communications is struggling to survive its ill financial health.

    Gartner reported Exodus' worsening woes last week before the vendor's conference call with the investment community to discuss its second-quarter results. The quarterly numbers only underline the drumbeat of bad news continuing to pummel the company. Gartner believes that Exodus' ability to pull out of its slide without outside help is doubtful.

    Despite such negative financial indicators, Gartner has not yet seen any "exodus" of businesses away from the Web-hosting market leader. However, the company's uncertain survival should spur businesses to prepare for life after Exodus. Accordingly, Gartner urges them to do the following:

    • Examine contracts for exit clauses and allowances for assistance with a transition.

    • Develop a service transition strategy that allows for less than four hours of overall downtime.

    • Build requests for information and requests for proposals to solicit services from other providers.

    See news story:
    Exodus haunted by churn, cash worries
    • Evaluate contract renewal terms and conditions carefully. Businesses should agree to short-term renewal (for example, no longer than 12 months). Ideally, month-to-month contracts are safest if pricing terms are market rates.

    • Monitor service-level agreements to ensure that customer support, response time and resource availability are in compliance. (Gartner clients have not reported any excessive or continued breaches.)

    (For a related commentary on the Web hosting market, see Gartner.com.)

    Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.