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October 5, 1998


By CBR Staff Writer

Exodus Communications Inc has acquired network security consultant and software developer, Arca Systems Inc to weave more security into its application hosting service. Exodus, headed by Ellen Hancock, plays in the burgeoning market for internet application and content management outsourcing – an area into which a number of telecommunications companies and internet service providers, such as PSINet, are also pushing. Exodus, which has a peering arrangement with internet service providers and telcos, has seven data centers across the US and one in London, linked by a total of 5GB of bandwidth capacity. Customers either locate their internet content and applications at Exodus data centers rather than have large amounts of internet traffic come through directly to their corporate sites, or have applications managed remotely. Arca, whose work spreads from the development of policy-based management software through to evaluating whether IBM’s AIX meets common criteria for security, will obviously be able to advise Exodus’ existing customers on security, and integrate its own software as well as products from other companies into customer networks. Exodus, however, also sees Arc providing it with a means to extend its customer base to companies wary of internet application outsourcing, but needy of network security consulting services. Exodus, which operates in the high end and targets large companies may need all the added value and channels to customers it can get. Not only does it face competition from companies such as Global Center, but also from telecommunications companies, which have their own extensive networks and access to large corporate users and are moving in on Exodus’ space. Exodus did not disclose the value of the deal. However Cyberguard, which formerly owned Arca’s assets, revealed that Exodus paid $3.4m in cash plus the return of an undisclosed amount to former Arca shareholders.

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