April 27, 2001, 7:19 PM — Pilot Network Services, which has provided managed Internet access and security services for 6 years, this week abruptly pulled the plug on its business and is shuttering its operations, stranding customers such as Rand and the Los Angeles Times.
In a brief announcement released yesterday, Pilot Network Services said it laid off all its employees the day before, with the exception of a few who are said to be assisting customers in making the transition to new managed services. Pilot's founder and CEO Marketta Silvera was not available to respond to questions.
Pilot had approximately 200 employees, and operates six data centers throughout the world. It provides Internet access and managed firewall and intrusion-detection services.
Sources at Rand, which began using Pilot's services just last month, said Rand found out about Pilot's decision to shut down only Wednesday. Pilot has also counted PeopleSoft, the Gap, GE Capital, Altera, Memorial Health Services, Newsweek and Fremont Bank as customers. Pilot provides Internet access to corporations through high-speed lines and at these IP access points scans for computer viruses, manages the firewall and runs Pilot's own intrusion-detection service to detect possible hacker attacks.
Gensler & Associates, an architectural and design company in San Francisco has been using Pilot services since 1997.
"We knew they were having some problems, but we didn't expect to get Northpointed," says Bruce Bartolf, vice president of information systems. Gensler was in the process of switching service providers and established an in-house back-up system so all 27 of the company's servers could be migrated to a new collocation facility.
"We're going to be fine. It's going to be slow, but employees should be able to at least get e-mail," he says.
Bartolf says that the only reason that Pilot's network is running at all is because a large Pilot customer in the financial industry sent some of its technicians over to Pilot's data centers. He also points out that several Pilot technicians are still there trying to get customers transitioned over even though they are no longer employed.
"They are the real heroes here," Bartolf says. "They're not even getting an additional weeks pay."
A story in today's Los Angeles Times noted that Pilot's customers "have chipped in to keep a handful of former Pilot employees on the job so the network remains in operation while customers switch to new Internet providers."
"Many Pilot customers have sent their own people to retrieve information and valuable Internet equipment housed by Pilot," the Times added.
Pilot Network Services reported a net loss of $11.2 million on revenue of $9.7 million for the quarter ended Dec. 31.
