Hancock: Life after Apple

Ellen Hancock stands as undisputed proof that there is life after Apple Computer, and a thriving one at that.

Since resigning as executive vice president and chief technology officer of the fabled computer company in a palace coup last year, Hancock has joined the swelling ranks of executives who have left their industry giants for Internet start-ups. And she seems to be doing just fine, thank you.

Last month, Hancock was named president of start-up Exodus Communications (EXDS), which has been hitting record highs on the stock market in recent days. The 54-year-old executive reports directly to CEO Chandra Sekhar at Exodus, whose management also includes former Sybase senior executive Louis Muggeo.

Exodus president Ellen Hancock on challenges

In an interview with CNET's NEWS.COM yesterday, Hancock described her new adventure this way: "I thought they had a great idea and were in a wonderful space. I thought this is a company that understands how to manage problems with the Internet...And it looked like they had an idea that had a lot of growth potential."

Potential indeed. Exodus saw its stock price rocket to a new 52-week high today--an encore of yesterday's market activity and another sign of the surge in many Internet stocks. The stock rose more than 4 percent to close at 42, up 1-7/8, building on a jump of more than 11 percent in yesterday's trading, when it closed at 40-1/4, up 4-1/8. Exodus, which was founded in 1994, went public only last month at $15 per share.

Exodus solutions include facilities management, such as a placing a company's server inside one of its seven data centers; bandwidth communications; and management services, which involves such things as monitoring a company's Web servers and bandwidth.

The Web hosting company plans to set itself aside from its myriad competitors by focusing on serving companies that do business with other organizations via the Internet, as well as companies that operate purely on the Web.

"We're different in that we're totally dedicated to the Web and companies where Web hosting is their only play," she said.

In comparing her current work environment to the one she left behind, Hancock said the decision-making process at Exodus, in which executives collaborate and rely on their experience with little use of data or marketing information, is similar to that of Apple.

She said her senior positions at IBM and National Semiconductor required a decision-making process that relied more on reviewing materials and data, which tended to result in slower reaction time. (Hancock had been recruited to Apple by then-CEO Gil Amelio, who had worked with her at National.)

However, when Apple acquired Steve Jobs's company, Next Software, its lead technician Avie Tevanian joined the computer maker as vice president of software engineering. Hancock noted she felt that Tevanian acted as though he worked for Jobs, which made it difficult for her as a manager.

She noted that Apple's new advertising campaign is compelling and that its G3 line is doing well but said she remains "wary" of Apple's declining market share.

Exodus is a very different story. Explaining the good fortune her new company has received on Wall Street, Hancock says two of the company's seven data centers are profitable and points to a backlog of orders.

"We are able to describe how we'll make a profit on the Internet, and not too many companies can do that," she said.

Hancock also noted that the conventional wisdom holds that more companies will begin outsourcing their Web sites in the future, a trend that bodes extremely well for Exodus.

Although the company posted a loss of $25.3 million last year on revenues

Exodus president Ellen Hancock on her relationship with Steve Jobs

of $12 million, financial analysts are expecting it to hit revenues of $100 million during the next two years.

BT Alex. Brown, Goldman Sachs, and NationsBanc Montgomery Securities initiated coverage of Exodus with positive ratings of either "buy" or "market outperform." Those companies were managing underwriters of the offering.

Hancock estimates that about 80 percent of the company's business comes from Web-intensive players like HotMail and GeoCities, while the other 20 percent comes from enterprise companies.

Two weeks ago, Exodus struck a deal with another Net start-up, @Home, to provide network-based applications for businesses. That service is expected to be available later this year.

Exodus plans to expand its data centers to 14 by the end of next year and is kicking the tires on potential acquisitions in Chicago and Boston. The company is considering expanding its international presence beyond its one data center in London, which serves U.S. companies with a need for global Web access.

Hancock said the company is considering Asia also, but cautioned that there's still plenty of homework to be done on the region in order to understand that market.

Hancock is joining executives such as Tom Jermoluk in making the switch to Net start-ups. Jermoluk, former president and chief operating officer of Silicon Graphics, is CEO of @Home. Like Exodus, @Home's share price has risen sharply of late.

In addition, Vinod Dham, the 47-year-old semiconductor executive from Advanced Micro Devices and Intel, joined semiconductor start-up Silicon Spice last week as president and CEO. The company has received new financing from a group including Kleiner Perkins Caufield & Byers.