**OT** Exodus Chairman Chandrasekhar Expects Repeat With Jamcracker
jamcracker.com
jamcracker.com
Bloomberg Forum
3/16/00 9:39:00 AM
Source: Bloomberg News
New York, March 16 (Bloomberg) -- Exodus Communications Inc. Chairman K.B. Chandrasekhar, who built the company into the world's biggest provider of Internet service for big companies, is targeting a new venture, Jamcracker Inc., to do the same for small ones.
'Exodus was my first avatar,' he told the Bloomberg Forum. Over the past year, Exodus is the sixth best-performing member of the Bloomberg U.S. Internet Index, with a return of 915 percent.
Chandrasekhar said he has 'a moral responsibility' to reward investors, mostly outsiders, who put up $42 million for Jamcracker.
The Exodus chairman set up Jamcracker last year in Sunnyvale, California, not far from Santa Clara-based Exodus. The new company sells a full range of Internet services to companies that employ fewer than 1,000 people. Exodus is the world's largest manager of Internet services for big business.
'I expect to repeat the kind of growth I had at Exodus,' Chandrasekhar said. After five years of operations, Exodus reported 1999 revenue of $242.1 million, from $52.7 million a year earlier.
Chandrasekhar, 39, a computer scientist who arrived from India in 1990, said he plans to take Jamcracker public 'because I have a responsibility to return the money to investors in a big way.'
The Jamcracker founder and chairman is also the company's chief executive, a title he ceded at Exodus to Ellen M. Hancock in 1998. Only 'a portion' of his personal funds are in the new company, he said. His Exodus shares are valued around $1 billion.
Other investors include Internet Capital Group Inc., Fleet Equity Partners Inc., First Analysis Venture Capital and Kohlberg, Kravis Roberts & Co.
Small companies haven't been able to afford to put all their internal operations, such as payroll and electronic mail, onto the Internet. 'There's a business disadvantage' that can be overcome by hiring his company, he said. Jamcracker will charge a monthly fee per user, currently $62.50.
'We'll be your virtual information-technology department,' Chandrasekhar said.
Companies including Digex Inc. and U.S. Internetworking Inc., which provide similar services, 'take an old-generation approach and try to fit it into the future' by serving only a handful of employees at a client, he said. |
