Loudcloud and Exodus - A tale of two companies
Posted by Arun Uday on July 31, 2007
Those who have been following Marc Andreessen’s blog (which btw is a must read for those interested in tech and entrepreneurship) would have read about the recent acquisition of his company Opsware by HP for $1.6 bn. Opsware is actually a reincarnation of an earlier company, Loudcloud, which went bankrupt during the dot com bust. Its fate was similar to another similar company, Exodus Communications, which many of us may have heard in different contexts.
My first brush with these two companies was when I was working (as a techie) in the US and was evaluating hosting options for a client. Exodus was the obvious 800 pound gorilla in that space then. It was founded by a bunch of desis - KB Chandrashekar, BV Jagadeesh et al, who all became very well known and have since been either directly or indirectly associated with many other companies such as Netscaler, Jamcracker, e4e, Aztec etc. Exodus’ stature can be gauged by the fact that at one point in time, (its claimed that) one in three internet packets were routed on its network. Every internet company that was some internet company (including Google, Yahoo, Hotmail and Microsoft) was hosted on Exodus. They infact had an informal tagline which said - “We are the internet” (similar to the Sun campaign of “We are the dot in the dot com” during the hey days). Loudcloud was a company similar to but not an exact clone of Exodus. While Exodus’ positioning was more towards physical infrastructure, Loudcloud’s was more towards software and intelligent network management. However, the line was not so well defined, and often most of these hosting providers would end up doing everything. Then the dot com bust happened and almost all of them went out of business. Exodus died a slow death through a few CEO changes, finally making a distressed sale to Cable and Wireless for a few pennies a dollar. Loudcloud, on the other hand hived off its intellectual assets into a new company, Opsware before selling the rest to EDS for $60 odd million. The final outcomes of the two companies make for an interesting contrast. What Exodus fetched ($750 mn) seems like a pittance given the hard assets it owned and its significantly larger size when compared to what Loudcloud+Opsware finally fetched. Just goes to show the value of intellectual property in the technology business.
August 6, 2007 at 2:47 pm
Isn’t that the toughest part: giving up a cushy job, the security that comes with it to plunge into uncharted waters. As Indians aren’t we doubly conditioned to aim for security above all else? Or … is that mindset about to change?
Read more Entrepreneurship & Venture Capital Taking the Plunge
August 6, 2007 at 2:48 pm
Do Indian lack a flair for entrepreneurship? When I first read that question on Trackin’s post I instinctively and vigorously did the Indian thing: shake my head in a strong no-no, that is not what I have uncovered. I think entrepreneurship is alive and kicking in India, but what is lacking is education, role models, access to information, a supportive environment…variables and factors that help nurture entrepreneurship. What are some unique variables that apply to entrepreneurs and startups in India? For instance, the role of parents and the diminishing returns in the marriage market for folks working in startups is a fairly significant factor.
In India there are countless, undocumented and untold stories about entrepreneurship. Some are a single owner business, while others may be a small, family-owned business and some are first time entrepreneurs. But they all do the same thing: take risks and create and operate their business. Read more Do Indians Lack A Flair For Entrepreneurship?