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Exodus Nearly Done With GlobalCenter Integration

Nearly five months after its $6.1 billion purchase of GlobalCenter, Inc., Exodus Communications officials feel they've made significant strides to integrate its Web hosting and co-location operations.

Officials expect to complete the integration of the two Web hosting companies by the end of the second quarter 2001.

The multi-billion dollar merger, completed in October, 2000, gave Exodus 32 Internet Data Centers (IDC) and the Web hosting operations of Global Crossing, Ltd., which was looking to refocus its fiber-optics business.

With a combined 42 IDCs in the U.S., Europe, Asia and Australia covering 5.1 million square feet, the merged entity presented a potential integration nightmare for the hosting and co-location giant, a problem officials said they were able to avoid.

Ellen Hancock, Exodus chairman and chief executive officer, said she is pleased with the progress made so far.

"We are pleased to have made such great progress and met our primary goals in one of the industry's largest-ever acquisitions," Hancock said. "To date, 99 percent of the GlobalCenter employees have been directly integrated into Exodus."

One of the biggest integration concerns was Exodus' ability to keep up with customer demand and support, always a risky proposition when two operations, however similar, come together.

With the help of consulting firms like Accenture, Exodus said customer support for all 42 IDCs have been centralized at its response center in Santa Clara, CA. Officials report that 80 percent of all its calls are now handled at its response center, improving overall response times by 18 percent.

"Customer service has been a top priority for Exodus at every stage throughout the acquisition and integration," Hancock said. "The measurable gains in quality and speed of response attest to our success."

According to Don Casey, Exodus president and chief operating officer, advance planning before the acquisition was complete helped integrate the administrative side of the house within weeks of the deal's completion.

"Our integration team started meeting and planning well in advance of the acquisition completions so that we would be ready to move forward, and that has proved instrumental in our success to date," Casey said. "We have been extremely pleased at how smoothly the integration process has gone."

Not only was the corporate functions of the two companies integrated within weeks, officials said, but sales teams were fully trained in the new operations the day the merger was finalized.

Officials also said GlobalCenter's operations in the U.S. and Europe are now effectively combined with Exodus' backbone, and gives former GlobalCenter customers nearly the same IP network support it got while affiliated with Global Crossing.

In addition to its own backbone, Exodus has contracts with carriers AT&T Corp. and Qwest Communications to provide network connectivity. Once these contracts run out this year, Exodus is buying 50 percent of its new bandwidth services through Global Crossing, a $4.1 billion caveat in the Exodus-GlobalCenter merger deal last year.



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