Redbus sales and marketing director Michael Tobin explains how the datacentre hosting business can guard digital assets
IT Week: Most people who know the Redbus Interhouse name think of Demon ISP founder Cliff Stanford, the dot-com age, various subsequent changes and executive battles within the group, rather than the datacentre hosting business...
Michael Tobin: We were created at the time of the Internet boom and had high-profile figures Cliff Stanford and [Tesco heir] John Porter. Redbus was kind of pulled apart. [Stanford] wanted world domination and [Porter] was squeeze, squeeze, squeeze. But the heady days of spend, spend, spend were not a bad thing, as it turned out.
In what sense?
We spent [money raised from flotation] in a Rolls-Royce type of way. We didn't build incrementally. Now it's our saving because customers don't have to wait for us to expand. Every customer is 100 percent profit. We should have done a better job [explaining the business to the City] but with a share price today of 2p, the City isn't really interested in us. Basically, what [such a low valuation says is] you're going to go bust, but the moment we're [profitable and have datacentres filled] that will change. We have cash in the bank and no debt.
I'm happy to be listed because customers can see our financial position. At plus-one capacity, all of our balls and chains become assets. It's actually a very rich cash business: all our customers run direct debit, and once they're in [they're unlikely] to get out because it will take them a day or two to change their infrastructure - and who can afford that? We rarely take business from a rival unless it goes bust. At KPNQwest [which ceased trading last May], nobody moved until they turned out the lights.
Back then, the datacentre hosting business was perceived to be about dot-coms and application service providers renting space. How has that perception changed?
It has changed dramatically. At that time, every customer looked like an Internet geek. Now it's people like Sega and [French bank] BNP Paribas coming in and saying they want mission-critical data to be held in datacentres.
Another expectation of hosting centres today is that they should act as third-party agents for failover, particularly given the collapse of KPNQwest and fears over the future of other telecoms suppliers.
Yes. We coined a phrase called business resilience. It's about business continuity and disaster recovery, but it has to be more than that. It is making sure the business runs properly by putting in the what-if [scenario]. A typical customer says, What if my telecoms provider falls over like a KPNQwest? In the old days you'd have two uninterruptible power supplies and two generators, and we're now extending that to [telecoms firm failover]. Customers are asking for consolidation and protection from telecoms suppliers going bust.
The 11 September attacks on New York made some companies reassess their data security and business-continuity measures. Did it have an effect on your business?
We saw a lot of pick-up in terms of enquiries but there was very little in terms of real additional business. What a typical disaster-recovery firm offers is a big room with a lot of trading screens, and it mirrors everything going on in the business. [11 September showed that] if it all goes, we have an EMC multiple-terabyte box that you can rent. If there was a poison cloud over Paris they would all be able to link in. It's a belt and braces approach.
Are pricing models changing?
The pay-as-you-go model is very good. People want flexibility. Companies today are so scared to be entrepreneurial. We're seeking the incentive to try things [so] we're focusing on monthly contracts with no penalty. Sega doesn?t know how that new game is going to go online. Also, we used to say, here's your floor, but now [because of the evolution of very thin, rack-mounted servers] we meter every customer [for power consumption].
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