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Exodus bandwidth deals tap start-ups

The Web site hosting company seals a deal with Telseon that will give Exodus's customers access to fast, less-expensive network connections.

    Web site hosting company Exodus Communications has sealed a deal with Telseon that will give Exodus's customers access to fast, less-expensive network connections.

    Telseon, a communications start-up, sells Internet-based optical connections in metropolitan areas. The deal announced Wednesday allows Exodus customers to access connections between the company's data centers and manage them according to demand.

    The agreement is similar to one that Exodus signed with Yipes Communications in March for similar kinds of services and shows the myriad ways Exodus is trying to smooth connections for its customers, which include Yahoo, eBay and Boeing, among hundreds of others.

    "As they add more customers to their data centers, they need to add more bandwidth," said analyst Brent Bracelin at Pacific Crest Securities.

    The deal is also a sign that Exodus wants to increase its service options and rely on companies other than traditional phone-service carriers for connections.

    Englewood, Colo.-based Telseon buys fiber in cities from companies such as Level 3 Communications and installs its own gigabit Ethernet switches that run on IP (Internet Protocol), a less-expensive option than older legacy network equipment.

    "Think of it as a cheaper way to buy bandwidth," Bracelin said.

    The nature of Telseon's network allows customers to add more bandwidth to their connections by just going to a secure Web site. The change occurs in a matter of hours, said Cary Robinson, an analyst at U.S. Bancorp Piper Jaffray.

    Yet that is changing. "I think you've got new entrants into the marketplace who are hungry and can serve customers better" than traditional phone companies, Robinson said.