Globix
Ardent Comm
Cogent
Exodus

I think those 4 providers all in serious financial trouble, some filed chapter 11. Should I be worried if one of dedicated provider is using one of those connectivity as their main source of bandwidth?
If things get worse, would they just cut you off or will there be someone take over their business?

I did managed to email one of Ardent's sale respresentive about bankruptcy thing. Here is his reponse:

We did indeed file for Chapter 11. While it's a pain it was something that
was very necessary and we've joined a failry large club. Ardent (formerly
CAIS) used to wire hotels and apartment buildings. We spent nearly a
billion (yes-- a billion) dollars doing that until we came to our senses
and got back to our roots--- T1's, T3's, colocation, and dedicated servers.
That "old fashioned" business has proven very profitable but the creditors
from our hotel/apartment days were still owed a lot of money. We managed to
convert a lot of that debt to equity but weren't able to convert all of it.
We filed Chapter 11 to force our creditors to deal with us on these terms.

In terms of environment-- everyone is all about going forward. I would
have quit if the general attitude were any different. I am personally
'invested' in our web business. I am responsible for every aspect of it and
feel quite personally involved. Every customer is a client and I develop a
relationship with every client. I consider them friends and care about
their respective businesses. I wouldn't bring customers in if I had even the
slightest notion that Ardent was going away. We have more than 700 T1 and
above access customers and 1600 web customers. We can't just go dark. I
take care of my customers.


Should I feel comfortable and trust them at this stage?Or is it time to move on?

It would be naive to say don't worry, they can't shut down. The best performing stock for the year 2000 was Enron. Tell all those who were left stranded by Northpoint and a host of DSL providers, they shouldn't have worried. More recently, look at all those who were at least temporarily without service due to the Excite@home fiasco. We can not say it can't happen.

On the other hand, many companies go through bankruptcies and emerge much better for it. They are able to erase their largest mistakes through bankruptcy.

Our way of defending ourselves against these possibilities is by never allowing ourselves to become 100% dependent on one provider. And this isn't just a bankruptcy insurance plan, it is part of protecting ourselves day-to-day against decreases in service and support quality. We chose to utilize multiple Colocation centers and, as much as we would hate it, could recover quickly from the loss of any one.

Most of our pipe used to come from Exodus (@home backbone), until they got into trouble. From that point we made very sure that we don't rely on them any longer. We now use the AT&T and Level3 backbones, with more coming on. In fact, @home is being dropped in the next few weeks.

I think any provider would be prudent to diversify their network backbones if those companies are in any form of financial trouble. I can't imagine the trouble we would be in if we didn't act at when we first heard about the problems and did eventually lose connectivity because of our inaction.

If your provider is still relying on a backbone in financial trouble then I strongly suggest you look for another. They have had plenty of time to act. What typically happens is the executives at these companies try and make everything look peachy to their customers so they don't stop dropping like flies. Unfortunatley, if everything falls through, that also leaves a lot of customers in the dark. The NorthPoint customers are a good example. Luckily, those were mainly consumer DSL connections.

Talk to your provider and see what contingency plans they have if their backbone provider went belly up today. They may already have a backup circuit in place, but is it big enough to handle all their traffic? Get straight answers to your questions and make a strategic decision from them. Hopefully you have built up a good enough relationship with your provider so you know who to talk to about it.

Generally speaking, when a tier 1, or big tier 2 provider fails someone steps in and takes over their customers...it happened when AGIS went belly up a few years back. Unlike companies that provide data services to home users, Tier 1/Tier 2 providers usually cannot afford to let their customers go dark. A mid to large sized business will sue the hell out of you if you try that (yes, even if they are in liquidation, it is still a potential problem). Plus, from a senior management point of view, who would hire you if you allowed major customers to get shutdown? No one would want to touch you :).

I agree with Barry: your best strategy is to be multihomed whenever possible. If you are single homed with a provider in chapter 11, it may be a good idea to find another provider, and now would be a real good time to dust off that disaster recovery plan you have, and make sure it is current :D.

What about Cogent? I notice some tempting colo/dedicated offers on WHT using Cogent bandwidth.

I've tested Cogent speed and it's pretty impressive.

Hmm, really? is cogent having financial troubles? :eek:

Originally posted by ^Kyo
Hmm, really? is cogent having financial troubles? :eek:

I'm sure they are relatively financially stable, but just about all MWAN carriers are having problems right now:

Mhttp://www.nwfusion.com/news/2002/0107carrier.htmlWAN

They lost $28M on $90k in revenue during the first half of 2001. That is especially bad when people are looking for profits, they have trouble raising additional money in the future. It also doesn't help that some of their investors, like WorldCom, are rolling out their own MWAN products.

Originally posted by uuallan
They lost $28M on $90k in revenue during the first half of 2001.

On the other hand, they had $600k of revenue in the third quarter. Hmm, 200000% annualized revenue growth... sounds good. ;)

Originally posted by uuallan


They lost $28M on $90k in revenue during the first half of 2001. That is especially bad when people are looking for profits, they have trouble raising additional money in the future. It also doesn't help that some of their investors, like WorldCom, are rolling out their own MWAN products.

There is an easy explanation for these numbers. They had to spend big bucks on their network buildout and opened their doors so to speak sometime in May 2001 I think. They just didn't want any customers in the build-out phase which was a very good move. Their current network is excellent to say the least. They've got a lot of new peering agreements over the last few months so their speed is great all over the world.

Where did you get the revenues for the third quarter from though? I'd be interested in knowing that as that sounds very reasonable, considering what I've seen.

You also need to take into account that Cogent already has 4000 customers signed up with them. That means at least $4 million revenue per month which isn't bad at all for a company that has been selling their services for little over 6 months. It is true, they haven't turned up all 4000 customers yet but they're doing fairly well.

I believe that Cogent will be a winner of the economic downtime as a lot of businesses ought to spend less on bandwidth and they are the cheapest.

Originally posted by Gernot

There is an easy explanation for these numbers. They had to spend big bucks on their network buildout and opened their doors so to speak sometime in May 2001 I think. They just didn't want any customers in the build-out phase which was a very good move. Their current network is excellent to say the least. They've got a lot of new peering agreements over the last few months so their speed is great all over the world.


According to their site, they lit their network and started taking customers in November of 2,000:

http://www.cogentco.com/News/news_111300_2.htm

I think the quality of their network is debatable. Granted, they have a better national backbone than I do :D, but they are still considered, at best, a Tier 2 provider.

Originally posted by twrs
What about Cogent? I notice some tempting colo/dedicated offers on WHT using Cogent bandwidth.

I've tested Cogent speed and it's pretty impressive.

I haven't heard anything about Cogent. I do know that they just bought a few smaller ISP's to help give them more POP's.

Originally posted by Gernot
Where did you get the revenues for the third quarter from though? I'd be interested in knowing that as that sounds very reasonable, considering what I've seen.

The third quarter figure I quoted above came from an SEC filing. (Well, almost: the filing stated a total of $700k through September 2001, and I subtracted off the $90k mentioned earlier). The same filing suggests that Cogent only started to generate revenue at the beginning of the second quarter, and that the 3rd quarter loss was about $18M.

Originally posted by ^Kyo
Hmm, really? is cogent having financial troubles? :eek:

Not yet, Take a look at the article in the following link.

http://www.lightreading.com/document.asp?site=lightreading&doc_id=10595

From financial point of view. It doesnt look too healthy. I say cogent still have plenty of money to burn. I suppose they should be around 18-24 months.

Originally posted by Eiv


Not yet, Take a look at the article in the following link.

http://www.lightreading.com/document.asp?site=lightreading&doc_id=10595

From financial point of view. It doesnt look too healthy. I say cogent still have plenty of money to burn. I suppose they should be still around in the next 18-24 months.