More EXDS, retrieved from the MF board.......
Got my Janus Report this week and boy i am i happy this year. Anyway here is what they were saying about Exodus one of their biggest purchases this year.
...Another area where we're finding exciting opportunities isamong "enablers," or companies that enable others to successfully execute on their business goals and objectives..... Exodus Communications, also an enabler, provides an outsourcing alternative for the hosting of corporate Internet sites. Web sites are expensive to maintain, and by outsourcing these functions, companies can reduce costs while upgrad-ing the reliability of their Web sites.
When we research a company, quite frequently we gain insight into other companies as well, which was the case with Matt Ankrum and Exodus. "I first heard about Exodus when I visited a private affiliated marketing company whose entire product offering relied on the Internet. If its site went down, it could no longer do business. Obviously, site main-tenance and support was critical to its organization, so the company decided to outsource its Web site to Exodus. In fact, early next year Janus will be doing the same."
Exodus has created a number of fail-safe rental facilities some-what similar to military bunkers. The customer supplies all the hard w a re to run the site, and Exodus ensures the site stays up and running. For the customer, it's approximately a 6-to-1 cost advantage to outsource site maintenance to Exodus because specialized systems and facilities do not have to be maintained to support a Web site. The customer also doesn't have to pay for unused bandwidth. On the other hand, if site traffic increases, Exodus simply flips a switch to supply additional bandwidth. From Exodus' perspective, the business dynamics are equally attractive. If Exodus has one bunker that hosts a single Web site, it still has to pay for the space, backup generators and redundant communications lines. But if Exodus signs up two customers, they've essentially cut costs in half; sign up three companies and costs are slashed by two-thirds.
Other themes are also benefiting from bandwidth's continued proliferation. "Companies are flocking to the Internet to stake their claim in cyberspace, and it reminds us of the California gold rush of the 1800s," explains portfolio manager Mike Lu. "As prospectors came West in search of gold, enterprising merchants sold picks and shovels - and made a profit regardless of whether people found gold or not." Today, "arms merchants " such as Cisco Systems are providing the necessary tools for the Internet to exist. Cisco provides the routers and switches that form the backbone for the Internet. Regardless of who ultimately wins the battle for dominance, Cisco should continue to experience strong demand for its products.
_________________________
U.S. Bancorp Piper Jaffray Report Predicts
Revolution in the Communication Services
Industry
MINNEAPOLIS, Dec 30, 1999 (BUSINESS WIRE) --
The traditional communication services industry is
plagued by slow growth, low innovation, and high
barriers to entry. As we exit the era of limitations and
enter the era of abundance with regards to bandwidth,
the benchmarks by which we judge the traditional
telephone companies become outdated. Benefiting
from this transformation in industry structure will be the
more nimble companies leveraging the outsourcing
trend occurring in the new disaggregated industry,
according to a new research report released today by
U.S. Bancorp Piper Jaffray.
The 278-page report, "Communication Service
Providers: The Next Gen Service Provider
Marketplace," highlights this and many other trends in
a market encompassing $750 billion in sales and $2.5
trillion in market capitalization worldwide.
"We're in the midst of a massive transformation from
circuit switched to packet-based architectures, and
from analog to digital. These trends threaten the
viability of the established players, while creating major
new market opportunities for more agile competitors
focused on next-generation services," said Andrew
Schroepfer, vice president and senior equity research
analyst at U.S. Bancorp Piper Jaffray and the author of
the report.
The U.S. Bancorp Piper Jaffray report notes that the
convergence of wireless/wireline, local/long distance
and voice/data services renders the historical means
of viewing the telecommunications market obsolete.
Instead, Schroepfer proposes a "new dividing line in communications services
that views carriers as providers of services either to end-users or to other
carriers." Carriers are outsourcing non-strategic business operations that do
not help their brand recognition or profitability. Outsourcing drives a reshaping
of the service delivery model, which U.S. Bancorp Piper Jaffray says results in
a disaggregated industry framework that incorporates the key changes
brought on by the Internet and the move towards a data-dominated world.
"The new marketplace simply will not support more than a few global leaders.
Accordingly, we are witnessing a consolidation spree combining the required
components, but we believe the true value creation in the marketplace will be
amongst the new entrants," says Schroepfer. Other highlights from the report
include:
-- Hosting centers will continue to be built in mass and will emerge
as the new central office of the future of communications;
-- Per minute pricing wars will hurt the industry in the short term,
but will drive growth over the long term as the bandwidth glut is
filled by newer bandwidth intensive services;
-- Service offerings from which carriers derive revenue will be
substantially different in 10 years led by the introduction of
numerous enhanced services;
-- Product features will continue to evolve into subscription
services through Application Service Providers (ASPs);
-- Senior executives from traditional telco leaders will continue to
leave for newer businesses, validating these new models turning
great business plans into great businesses;
-- net New Minutes (nNM), the use of communications from the PC,
will be a significant driver of communications as new services
and new usage originates from this new channel;
-- IP will win the protocol layer, optical fiber will win the
physical layer and the layers in between (ATM and SONET) will be
eliminated for all but the interface;
-- Carrier-sourcing will explode as outsourcing drives carriers
towards a focus on brand and profitability;
-- Bandwidth exchanges will emerge to enable real-time provisioning
of services and complete the disaggregation of the industry
between bandwidth providers and brand name service providers.
"We have a brief window before the next-generation communications
infrastructure design is complete," said Schroepfer. "During that time, many
new leaders will emerge creating tremendous opportunities for investors as
this dynamic industry takes its new form."
Schroepfer's current coverage list includes: DeltaThree.com (NASDAQ:
DDDC - $26 7/8 - (a)(b)), Exodus Communications, Inc. (NASDAQ: EXDS -
$87 3/16 - (a)), iBasis, Inc. (NASDAQ: IBAS - $31 3/4 - (a)(b), Level (3)
Communications, Inc. (NASDAQ: LVLT - $83 1/4 - (a)), Metro One
Telecommunications, Inc. (NASDAQ: MTON - $11 3/4 - (a)), Net2Phone, Inc.
(NASDAQ: NTOP - $48 1/4 - (a)), NorthEast Optic Networks, Inc. (NASDAQ:
NOPT - $62 1/2 - (a)), Qwest Communications International Inc. (NASDAQ:
QWST - $41 57/64 - (a)).
Copies of the 278-page report or the 26-page executive summary can be
obtained by contacting your U.S. Bancorp Piper Jaffray representative.
Members of the media can request copies of the report by contacting
Elizabeth Child at 612/342-6594 or echild@pjc.com . The report may be
purchased by nonclients on the web at multex.com. |
