Exodus Communications, Inc. 1999 Annual Report

EXODUS COMMUNICATIONS, INC. 1999 ANNUAL REPORT

THE INFRASTRUCTURE FOR THE DIGITAL ECONOMYTM

WHERE INTERNET INNOVATION RESIDES EXODUS COMMUNICATIONS, INC. 1999 ANNUAL REPORT

Exodus Communications, Inc. 2831 Mission College Boulevard Santa Clara, CA 95054-1838 tel: 408.346.2200 www.exodus.net THE EXODUS WORLDWIDE NETWORK CORPORATE INFORMATION

CORPORATE HEADQUARTERS TRANSFER AGENT AND REGISTRAR 2831 Mission College Blvd. EquiServe Santa Clara, CA 95054-1838 P.O. Box 8040 888.2EXODUS or 408.346.2200 Boston, MA 02266-8040 www.equiserve.com EUROPEAN HEADQUARTERS Exodus Internet Limited STOCKHOLDER’S MEETING 10 Stratton Street The annual meeting of stockholders will be held on Mayfair, London Tuesday, June 6, 2000, at 10:00 am at The Westin Santa W1X 5FD Clara, 5101 Great America Parkway, Santa Clara, CA 95054. United Kingdom +44 (0)20 8955.0800 MAILING ADDRESS Exodus Communications, Inc. Exodus has sales offices located 2831 Mission College Blvd. throughout North America, Europe, Santa Clara, CA 95054-1838 and Asia Pacific

INTERNET INDEPENDENT ACCOUNTANTS www.exodus.net KPMG LLP

Mountain View, CA INVESTOR RELATIONS A copy of the 1999 Annual Report on Form 10-K is CORPORATE COUNSEL available upon request. Securities analysts and investors Fenwick & West LLP seeking additional information about the Company Palo Alto, CA should contact Investor Relations at the above address, via email at [email protected], or at 408.346.2191. Company information is available on our Web site at www.exodus.net. WELCOME TO THE CENTER OF THE INTERNET. This was a year in which the market for Internet services changed dramatically, and Exodus® along with it. In 1999, we transformed ourselves from a server-hosting company to an industry-leading provider of complex Web-hosting solutions. Because Internet innovation, after all, needs a place to reside.

COMPANY PROFILE

Exodus Communications™ is a leading provider of complex infrastructure via a worldwide system of Internet Data Internet hosting services for enterprises with mission-critical Centers (IDCs) located in North America, Europe, and Internet operations. The Company offers sophisticated Asia Pacific. system and network management solutions, along with The Company’s stock is publicly traded on the Nasdaq Professional Services, to optimize the performance of National Market under the ticker symbol EXDS. For more © 2000 All rights reserved. Exodus Communications, Inc. Exodus, Exodus Communications, customers’ complex Internet operations. Headquartered in information about Exodus, visit www.exodus.net or call The Infrastructure for the Digital Economy, Exodus Gigabit Ethernet, Exodus Security Service Santa Clara, California, Exodus manages its global network 888.2EXODUS. Pack, Exodus Platinum Level Support, Exodus DataVault, Cohesive Technology Solutions, Service Metrics, Keylabs, American Information Systems, Global OnLine Japan, and the Exodus logo are trademarks of Exodus Communications, Inc., and may be registered in certain jurisdic- tions. Mirror Image Internet and CAPs are trademarks of Mirror Image Internet, Inc. All other trademarks are owned by their respective holders.

EXODUS 65 INTERNET DATA CENTER LOCATIONS KEY

NORTH AMERICA EUROPE ASIA PACIFIC 155 Mbps Line Atlanta Seattle Amsterdam* Australia* Austin Silicon Valley Frankfurt China* 622 Mbps Line Boston Toronto* London Singapore* Chicago Washington DC Paris* Tokyo Planned Line Los Angeles Stockholm* Existing Internet New York Data Center Planned Internet Data Center * Planned Internet Data Center locations

All information subject to change without notice 1 FINANCIAL HIGHLIGHTS

(In thousands, except per share and number of customers data) Year Ended December 31, 1997 1998 1999

Revenues $ 12,408 $ 52,745 $ 242,140 Net loss attributable to common stockholders $(26,711) $(69,330) $(130,323) Basic and diluted net loss per share $ ( 1.73) $ (0.55) $ (0.78) Shares used in computing basic and diluted net loss per share 15,428 125,808 167,924 EBITDA $(20,274) $(41,945) $ (44,738)

Number of customers 303 830 2,285 Average annualized revenue per IDC customer $ 103 $ 133 $ 196

AVERAGE ANNUALIZED NUMBER QUARTERLY REVENUE PER OF CUSTOMERS REVENUE IDC CUSTOMER (IN THOUSANDS) (IN MILLIONS) (IN THOUSANDS)

200 2.4 120

150 1.8 90

100 1.2 60

50 0.6 30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1998 1999 1998 1999 1998 1999

2 LETTER TO STOCKHOLDERS

FELLOW STOCKHOLDERS, We are very pleased to report to you that 1999 was an extremely successful

year for Exodus. In a market that underwent significant change over the past twelve months,

our financial results are a testament to the fact that we were able to meet the continually evolving

expectations of our customers. In the process, we successfully transitioned Exodus from an Internet

Data Center (IDC) company to the industry’s leading provider of complex Web-hosting services.

Revenues for the fiscal year ended December 31, 1999 increased 359 percent to $242.1 million,

compared with $52.7 million in the previous year. The Company reported a net loss for 1999

attributable to common stockholders of $130.3 million, or $0.78 per share, compared with a net

loss attributable to common stockholders of $69.3 million, or $0.55 per share, in the prior year.

Gross margins increased to 19 percent of revenue.

For 1999, EBITDA loss (loss before interest, taxes, depreciation, amortization, and other non-

cash charges) was $44.7 million, compared with $41.9 million the year before. We exited the year

with twelve of our IDCs EBITDA-positive, up from five at the end of 1998.

A YEAR OF GROWTH. In our last report to you, we described several goals that we had set for ourselves

for 1999. These goals were developed to strengthen our position as the leading provider of Internet

systems and network management solutions for companies with mission-critical Internet operations.

We are happy to say that we have not only met these goals but in most cases far exceeded them.

Specifically, we sought to extend our market leadership by establishing Exodus as the pre-

mier brand name in the category of complex Web-hosting services. We believed, as did many

industry analysts, that 1999 would see a shift toward increased business-to-business initiatives

3 in the Internet sector. In fact, this turned out to be the case, as evidenced by the 175 percent

increase we experienced in the number of our hosting customers, to 2,285. By the fourth quarter,

this increase translated into six new Exodus hosting customers each day. The average annual-

ized revenue per IDC customer, which is based on monthly recurring revenue and does not

include any one-time revenue from Professional Services, consulting, or installation fees,

increased dramatically as well, from $133,000 at the close of 1998 to $196,000 as we exited 1999.

As our customer base grew, we began to see a dramatic shift in the balance between enterprise

and Internet-related customers; our client base is now split evenly between these two categories

of companies.

Another of our objectives was to accelerate our domestic and international growth through the

construction of new IDCs and the expansion of our network and worldwide public and private net-

work interconnect arrangements. In 1999, we brought eleven new IDCs online, bringing our total

to nineteen worldwide. This added capacity represents a 300 percent increase in gross square

footage, from 400,000 to 1.6 million. The total number of servers we host worldwide grew in 1999

from 6,600 to over 27,000.

To meet the demands of the expanding Internet, we continued to augment the strength and

capacity of our worldwide network. Our peak Internet exchange rate jumped from 2.7 gigabits

4 per second* to 7.2 gigabits per second*; this higher rate is the equivalent of transmitting an entire

set of encyclopedia over the network every second.

BUILDING EXPERTISE. We also established several new strategic relationships for distribution and tech-

nology in 1999. To help us address new market opportunities presented by the burgeoning

demand for e-business, we acquired Cohesive Technology Solutions.TM This business now forms

the core of an extremely talented and experienced Professional Services organization of nearly

500 people within Exodus.

To further extend our Internet offerings, we acquired Service Metrics,TM which allows us to

provide “Internet Intelligence” through the collection and analysis of Web site performance data.

After the close of the fiscal year, we acquired KeyLabs,TM a leading provider of e-business testing

services, and announced plans to make an equity investment in Mirror Image Internet, Inc.TM This

latter relationship will pave the way for creating the world’s most powerful Content Distribution

platform. Under this relationship, Mirror Image will deploy Content Access Points (CAPsTM)

throughout the entire Exodus IDC network—providing fast, secure, reliable, scalable, and robust

Content Distribution services to content providers, ISPs, and enterprises alike.

In addition to those initiatives, we made two strategic acquisitions in 1999 to meet our goal of

accelerating the expansion of our geographic reach, both in the United States and internationally.

*1/99 to 12/99

5 With the acquisition of American Information Systems,TM we now provide superior co-location, Web-

hosting, Internet Professional Services, and Internet access to corporations in the Midwest. And our

acquisition of Global OnLine JapanTM—one of Japan’s premier Internet service providers—has given

us an immediate presence in the important Asia Pacific market. Also in the international arena, we

expanded our network capacity connecting future Exodus IDCs in Europe, Japan, and North

America, giving us the capacity needed to meet our customers’ growing demands.

LOOKING AHEAD. We are extremely encouraged by our progress to date in the dynamic marketplace of

large-scale, complex Internet operations management—a place in which not just servers, but true

Internet innovation, now reside. In 2000 and beyond, we intend to continue to build the momentum

we have established, with further expansion into new regions, continued development of new

alliances, and enhancements of our Managed and Professional Services and new product offerings.

On behalf of Exodus, we thank you for your continued support.

Sincerely,

Ellen M. Hancock K.B. Chandrasekhar President and Chief Executive Officer Chairman of the Board of Directors

6 2TheMart.com, Inc. Dynamic Logic L90, Inc. Rite Aid Corporation 5050.com E-centives, Inc. Language Force Rivals.com 9NetAvenue, Inc. eConcepts, Inc. Last Minute Network RR Donnelley AC Nielsen Egghead.com LightPC.com Rx.com Access Global E-greetings Network Live Online Safeguard Health Enterprises Active Health Management eguide2000.com LoadMedia Sales.com Advertising.com El Sitio USA Lycos, Inc. SalesLogix Albertson’s, Inc. Electron Economy Macromedia, Inc. SeniorCom, Inc. Allegrix, Inc. Elephant X Magnifi, Inc. ShopNow.com, Inc. AmericanGreetings.com E-Loan Mail.com Sightsound.com, Inc. AnyDay.com EShare Technologies, Inc. Medscape, Inc. Silicon Graphics ArsDigita Corporation E-Steel MerchanTrust Sitestuff.com, Inc. Athena Health, Inc. Etera Corporation Merrill Lynch & Co., Inc. SmartAge Auctionwatch.com, Inc. Ethnic Grocer MetalSite, L.P. Snowball.com AutoMall Online, Inc. EverAd Misys Interactive Trading Ltd Software Design Group, Inc. Avenue A Media Excite, Inc. MP3.com, Inc. SoundsBig.com Baby Center Exist Corporation Mpath Interactive SportsLine.com, Inc. Bcandid Corporation Expertcentral.com MSNBC Starmedia Be Free, Inc. Expidant, LLC MunicipalTrade.com, Inc. StockBack.com Best Selections Fast Search Inc. MyPoints.com StorageNetworks, Inc. BET.com FastWeb mySimon, Inc. StorageTek Beyond.Com Flooz.com, Inc. N2H2 Sun Microsystems Big Charts Fogdog, Inc. National Public Radio Switchboard Inc. Big Dog Sportswear FortuneCity.com Neoforma.com, Inc. Synchronics Billpoint Found.com NetFlix, Inc. Synopsys BIT Software Corporation Franklin Templeton Corporation Netgateway Telecomputing, Inc. Blizzard Entertainment Free Range Media Netpliance, Inc. Tellme Networks, Inc. Brain.com Freerealtime.com Nettaxi Online Communities The Candy Barrel, Inc. BravoGifts.com, Inc. FreeRide Media LLC Network Associates The Sharper Image Breakaway Solutions, Inc. Frictionless Commerce NORDSTROM.com TheStreet.com, Inc. BrickRoad Technology, Inc. Fry Multimedia, Inc. Northern Light Technology, Inc. Trading Edge, Inc. British Airways FutureLink Corporation Northpoint Communications, Inc. TriVida Corporation BroadBand Sports Gabriel Venture Partners Novell Tunes.com Buy.com GATX Logistics, Inc. Onebox.com uBid.com Buzzsaw.com Gazoontite.com Onvia.com, Inc. UpShot Corporation Campus Pipeline, Inc. Gear.com Opsion Innovation US News & World Report Castle Rock Computing Gem Master, Inc. Oracle BOL USATODAY.com CBS Marketwatch.com Get Webby Oracle Management Services V2Commerce Channel Four Television Corporation GetThere.com Orbit Commerce Inc. VerticalNet, Inc. Chemdex Corporation Global Electronics Exchange Otis Elevator Company Vicinity Corporation Classified Ventures Globeset, Inc. Partnerware Technologies VIDS Technologies, Inc. Clubmom, Inc. GotSavings.com pcOrder.com Vipro Corp Cobaltcard.com Gym America People Link VitaminShoppe.com Collectors Universe Handspring Perks at Work WarrantyNow CommTouch Software, Inc. Hello Network Personable.com Weather.com CompUSA Inc. Homebid.com Pets.com Webhire, Inc. Conducent Technologies Inc. HomePortfolio, Inc. Petsmart Webhosting.com coolsavings.com Honey Baked Foods, Inc. Phase Forward WebQuest Corio HotSamba Philips Semiconductors Wine.com Covalex Huntleigh Fund Phone.com WinFreeMoney.com Cube Technologies, Inc. iBEAM Broadcasting PlaceWare, Inc. Wintelcom, Inc. Cybercash, Inc. iCat Corporation PlasmaNet, Inc. WinWin.com, Inc. Cybernet International iChristian.com Porvenir, Inc. Wired Digital Digital Impact, Inc. i-drive.com Powernet International Wizards of the Coast Digital Nation, Inc. Immerce, LLC priceline.com WorldSite Networks Digital Work Impresse Corporation Primary Knowledge WorldStreet Corporation Direct Hit Technologies Infinet Corporation Public Storage. Inc. X.com Corporation discovermusic.com Intellisys Technology Corporation Qorus Xpertsite.com Discovery Communications Interpacket Group, Inc. Quantum Leap Yahoo! DoubleClick Interwest Bank Quote.com Yantra Network Dougery Ventures Intraware RCM Technologies, Inc. Yodlee.com Douglas Product, Division of Boeing iShip.com, Inc. RealNames Corporation Yupi Internet, Inc. Downey Savings & Loan Association iVillage Reel.com Zacks Investment Research Drinks.com iwin.com Replay Networks, Inc. ZDTV Drugstore.com Iwon.com Responsys.com Zing Networks DSL Networks Jamcracker, Inc. Rhythms Net Connection, Inc. Zona Financiera

TODAY, OVER 40 PERCENT OF THE TOP INTERNET SITES* HAVE CHOSEN EXODUS.

HERE ARE THE STORIES BEHIND SIX OF THEM. * 2/00 Media Metrix 7 WHAT DO YOU DO WHEN MILLIONS OF CONSUMERS WANT TO BUILD HOME PAGES?

HELP YAHOO! GET PERSONAL.

If the Web is about empowering individuals, it doesn’t get much more individual than this. That’s because Yahoo! helps ordinary folks build their own home pages. At a site that makes it extremely easy to enter the vast new global on-line community now open before them. Exodus helps Yahoo! by providing the network scalability and around-the-clock engineering support demanded by the largest portal in the world. And with many terabytes of Yahoo! information running through multiple installations within Exodus Internet Data Centers worldwide, that’s a responsibility we take personally.

8 WHY WOULD ANYONE HOST A HIGH-FLYING PROMOTIONAL PROGRAM?

TO HELP GET BRITISH AIRWAYS’ INTERACTIVE TV SERVICE OFF THE GROUND.

British Airways flights and holidays. In a unique partnership with three cable TV companies, British Airways is enabling almost two million households to plan holidays or view and purchase the products and services offered by the air- line—on TV. Exodus was instrumental in helping British Airways extend their already high- profile travel service with Exodus Managed Services—enabling the close monitoring of this new business venture. From the Exodus IDC in London, British Airways now has connections to the Internet, worldwide.

9 HOW CAN YOU HELP PEOPLE GET VITAL INFORMATION, RAIN OR SHINE?

KEEP WEATHER.COM AHEAD OF THE STORM.

When a snowstorm hits the East or a hurri- cane batters the South, people want to know. Enter weather.com. The site supplies current conditions and forecasts for over 77,000 locations worldwide, weather-related news and up-to-the-second coverage of all major weather events. To help weather.com stay on top of all this, the Exodus Professional Services group provided comprehensive network engineering support and detailed site architecture planning. Add our state-of-the-art facilities, high-speed network, and data backup and security services, and weather.com is totally comfortable.

10 HOW DO YOU PROVIDE SUPERIOR SERVICE TO A COMPANY THAT’S FAMOUS FOR IT?

GET NORDSTROMshoes.com UP ON ITS FEET.

Click on this site and you enter the world’s biggest shoe store, with over 20 million pairs of shoes and counting. Nordstrom.com and Nordstromshoes.com are dedicated to providing unconditional satis- faction for their online customers. And so at Exodus, we helped Nordstrom scale from

1 12 servers to more than 60 in just 3 ⁄2 weeks to make the deadline for their shoe store site launch. By recommending our secure facilities, superior network, and Managed Monitoring Services, our Professional Services group got Nordstromshoes.com up and running in a hurry.

111 HOW CAN YOU HELP COST-CONSCIOUS ONLINE SHOPPERS?

MAKE SURE priceline.com IS OPEN FOR BUSINESS.

Here’s a great idea: link buyers who like to save money with sellers who have excess inventory. Bingo! Welcome to priceline.com, whose motto is, “Name Your Own Price!” Here’s another great idea: to make sure the site is always available, turn to Exodus. Which is exactly what priceline.com did. This virtual marketplace took advantage of our multiple Managed Service offerings, and expanded security offerings includ- ing best-of-breed firewall technology—all from within our secure facilities. With priceline.com and Exodus, everyone comes out ahead.

12 WHAT CAN YOU DO WHEN ABSOLUTELY EVERYONE WANTS TO KNOW?

MAKE SURE USATODAY.COM CAN TELL THE STORY.

Today, with more than 200,000 pages dedicated to the latest national and international news, USATODAY.com ranks as the #1 news- paper site on the Internet. But such fast growth is nothing compared with the spike in viewership the site gets when an unexpected, major news event occurs. To ensure the highest availability and fastest download times, USATODAY.com relies on Exodus for con- sistent service, secure facilities, and the high-capacity network connections a news organization expects.

13 GROWING CAPABILITIES TO MEET GROWING DEMANDS

As the Internet has grown, so too have MANAGED SERVICES In addition, due to the significant the demands of companies utilizing Exodus Managed Services provide growth of bandwidth-intensive activity this powerful new platform as a state-of-the-art tools and expertise over the Internet, we have teamed major component of their strategic for the proactive management of with Foundry NetworksTM to provide business objectives. As a leading your Internet business in key areas Exodus Gigabit EthernetTM service, provider of services for companies such as storage, performance opti- which offers ten times the speed of with complex Internet businesses, mization, and security. With these conventional LANs. Exodus offers a wide range of capa- services, we provide the collabora- To meet the ever increasing secur- bilities, from sophisticated Managed tive intelligence needed to support ity demands facing today’s Internet and Professional Services to state-of- some of the most critical elements of businesses, we have created the the-art facilities to one of the most your Internet operations. Exodus Security Service PackTM offer- technologically advanced global net- For example, the Exodus Data- ing affordable bundled services

works in the world. VaultTM Network Storage Service, designed to help companies plan and developed in partnership with Sun manage the ongoing protection of

Microsystems® and VERITAS®, pro- their mission-critical Internet opera- vides customers a complete, best-of- tions. This three-tier security solution ensures our customers access to the * breed data backup and restore solution, whether backing up a single file level of security most appropriate to or multiple terabytes of data. To their individual Internet interests. expand our storage offering, we have Regardless of scale, the Security 6 also teamed with Storage Networks, Service Pack offers all customers fast, to offer additional storage solutions easy access to security expertise THE NUMBER OF NEW CUSTOMERS WE'RE to help our customers continue to and seamless integration with the ADDING EVERY DAY. solve the most complex IT data stor- complete list of Exodus Managed age challenges. Security Services. In addition, we Further, with performance opti- have further expanded our expert mization tools developed by Service security consulting services with Metrics, we can now provide detailed the acquisition of the Professional Web site performance measurements Services division of Network-1TM. that enable companies to anticipate, Finally, for the highest level of identify, and resolve consumer satis- customer support, we offer Exodus faction issues. Our worldwide network Platinum Level SupportTM, in which * of Data Collection Agents (DCAs) col- two or more Exodus profession- M lects and report performance data from als are always on call to provide 1.6 an end user’s perspective. Such custom our customers with comprehensive THE SQUARE FOOTAGE reporting and proactive notification 24 x 7 support. OF ALL OUR INTERNET allow our customers to optimize their DATA CENTERS. Web site for better performance.

*As of 12/99

144 EXODUS INTERNET DATA CENTER

Our state-of-the-art facilities are cus- SECURITY TEMPERATURE CONTROL SYSTEMS tom-designed with the widest range The security and integrity of each Exodus IDCs offer HVAC tempera- of physical security features, 24 x 7 IDC is maintained by video-surveil- ture control systems with separate monitoring, and multiple redundant lance cameras, security alarms and cooling zones. Zones are monitored subsystems. on-site 24-hour security personnel by a central system with alarms. located behind bullet-proof glass. NETWORK CONTROL CENTER SECURE AND FLEXIBLE The entire facility, network and cus- POWER HOUSING OPTIONS tomer systems are carefully moni- Exodus maintains diesel powered Flexibly-sized housing options let tored and managed by the Network backup generators, Uninterruptible Exodus IDCs become virtual exten- Control Center staff, who are avail- Power Supply (UPS) systems, and sions of the corporate enterprise. able 24 x 7 to provide hands-on power distribution units that provide Options include locking cabinets, assistance as needed. continuous clean power to customer racks, cages, and vaults. equipment. REDUNDANT CONNECTIVITY EXODUS VAULT Exodus has installed fiber optic FIRE SUPPRESSION The Exodus Vault incorporates video cable from multiple providers, allow- Exodus employs state-of-the-art surveillance, separate air condition- ing redundant fiber connections out redundant fire suppression systems ing and fire systems, and secure bio- to the Internet. In this way, Exodus to protect critical equipment from metric access control to satisfy the virtually eliminates any single point the threat of fire. most stringent security requirements. of failure.

15 FACILITIES running through a site, but also the Exodus’ world-class Internet Data network that supports it; System and Centers (IDCs) are connected across Network Design, for deploying an the globe through a high-performance, effective information infrastructure dedicated, and redundant network. through systems and network assess- Each of our IDCs feature custom- ment, planning, and design; and 1K designed security, connectivity, and envi- Application Integration and System ronmental systems to provide a select Testing, to ensure optimal perform- THE NUMBER OF hosting solution for customers with ance, reliability, and scalability. MEGABITS WE TRANSFER mission-critical Internet operations. EVERY SECOND WITH OUR NEW GIGABIT Our IDCs are outfitted with state-of- NETWORK SERVICES ETHERNET SERVICE. the-art security, temperature control The Exodus Network is one of the systems, fire detection and suppression largest IP networks in the world today, safeguards, redundant power, and designed to deliver the scalability, high flexible server space. What’s more, availability, and peak performance all Exodus IDCs ensure around- required for high-volume, mission- the-clock high performance with critical Internet operations. The net- * onsite expert personnel trained in work has achieved a peak Internet the areas of networking, Internet and exchange rate of over 7.2 gigabits per systems management. second*, enabling us to deliver out- 7. 2 A total solution for complete confi- standing levels of performance and dence and security, Exodus Internet service, twenty-four hours a day, THE SPEED, seven days a week. IN GIGABITS PER SECOND, Data Centers provide the physical and OF OUR PEAK INTERNET technical environment demanded by The high-performance and redun- EXCHANGE RATE. those with outsourcing interests. dancy of our private fiber network and the trafficking power of over 200 PROFESSIONAL SERVICES direct public and private intercon- In addition to our expertise in Internet nects combine to virtually eliminate information security, Exodus’ world- the risk of any single point of failure. class Professional Services group This solid design, paired with flexible offers a range of valuable consulting bandwidth offerings of up to 1,000 services both as packaged offerings megabits per second with our * and customized solutions for highly Gigabit Ethernet service, helps carry K specific customer needs. our customers successfully through 27 These services are built around explosive Internet growth. With all of the components neces- THE APPROXIMATE several core capabilities: Architecture NUMBER OF SERVERS Design, for building powerful, scalable sary to provide complex web-hosting WE HOST. Internet solutions; Security Design solutions, Exodus truly is where and Management, for maintaining the Internet innovation resides. integrity of not only the information

*As of 12/99

16 THE EXODUS WORLDWIDE NETWORK CORPORATE INFORMATION

INTERNET INDEPENDENT ACCOUNTANTS www.exodus.net KPMG LLP

COMPANY PROFILE

EXODUS 65 EXODUS COMMUNICATIONS, INC. 1999 ANNUAL REPORT

THE INFRASTRUCTURE FOR THE DIGITAL ECONOMYTM

WHERE INTERNET INNOVATION RESIDES EXODUS COMMUNICATIONS, INC. 1999 ANNUAL REPORT

Exodus Communications, Inc. 2831 Mission College Boulevard Santa Clara, CA 95054-1838 tel: 408.346.2200 www.exodus.net