B of A Conference: Exodus Becomes a National Asset - TheStreet

B of A Conference: Exodus Becomes a National Asset

While Uncle Sam watches the company's back, Exodus looks for less dot-com-dependent business.
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SAN FRANCISCO --

Exodus

(EXDS)

has become so important that the U.S. government wants to make sure its server-packed data centers remain up and running.

Because its servers host so many of the country's Internet sites, the

White House

has declared the company a "National Infrastructure Asset." That means the government doesn't want Exodus' systems to go down, and is willing to deploy the might of Uncle Sam to make sure they don't.

"What it means is that we have access to more resources," said R. Marshall Case, Exodus' CFO, after a presentation at the

Banc of America Securities Investment Conference

here. "You can't even find a phone company that has that kind of designation."

Well, that's good, because Exodus isn't a phone company. Case stressed that fact in his presentation, when he highlighted competitors like

WorldCom

(WCOM)

and

Qwest

(Q)

, which happen to be in the phone business but also run server farms, but don't have the lofty government designation.

And because Exodus focuses solely on its data centers, it can offer higher-end services in that area, Case said. This is important because Exodus likes to go after companies "that rely on their Web sites to stay in business." Exodus can sell more to, and make more money from, those companies, Case said.

What he didn't say, though, was that means a lot of dot-com Web sites. You know, the businesses that have been having a hard time staying in business lately -- and not because their servers are crashing.

But Case seemed to realize the quandary those high-end customers could pose for his company. He noted that Exodus has increasingly been going after firms whose Web sites are less than "mission critical," too. Which could help Exodus if a bunch of its dot-com clients start to shutter their doors.

"We've been focused on bricks-and-mortars that are looking to improve their Web sites as well," Case said.

It's starting to show. In 1998, 80% of Exodus' customers were dot-coms, Case said. Now they account for only 50% of the company's customer base.

Or, in other words, the White House isn't alone in being concerned about a large number of the company's servers going down. And it has nothing to do with national security.