The anonymity of IXEurope’s new data centre in the heart of Heathrow belies its state-of-the-art facilities. Complete with bulletproof glass, hand scans, air locks, and enough generators to power a small town, the internet hotel houses vital business data for some of the largest companies in the world.
Guy Willner, founder and chief executive, says: “Basically we baby-sit other people’s hardware.”
Started with one building in 1999, IXEurope now has seven data centres around Europe and employs 96 staff.
Willner, a former director at Vivendi, and Christophe de Buchet, previously managing director of the speech-recognition company Tech Works, founded IX Europe in 1998. They began trading the following year after raising £7m from European Acquisition Capital, a private-equity firm.
From the beginning Willner knew he would need huge amounts of capital. Data centres are extremely expensive to build and run.
Corporate clients pay to house their servers – the computers that store their critical data – in the centre because of its secure environment and super-fast fibre-optic cabling. “If they have a problem we can help them fix it. We can get back to a customer within five minutes, compared with an industry average of four hours,” says Willner.
In September 2000, IXEurope raised £42m from Bank of America, JP Morgan and European Acquisition Capital, and Willner announced his intention to float the company. Then the stock market crashed. “We were in the last week of our investor roadshow when the Nasdaq just died,” says Willner.
The cancelled float left IXEurope in desperate need of cash. “Normally a float is make or break,” he says, “but in hindsight, it turned out to be a good thing. None of the management would be here now if we had floated.”
Even as several competitors began filing for bankruptcy, IXEurope succeeded in raising a further £12m from its existing investors in May 2001, followed by a fourth round of £12m in June of this year. Willner is confident this will see the company through to profitability in late 2003. Sales have rocketed 644% a year from annualised sales of £107,000 in 1999 to £5.9m in 2001, although with significant losses.
IXEurope’s costs are high but fixed, while revenues are recurring and paid quarterly. Customer churn is low because companies are reluctant to move their servers once installed. Willner says the challenge now is to convince companies to put a higher value on their data centres as a corporate asset and attach more importance to management. “They need to see the data centre as critical,” he says.
This has already started to happen. The events of September 11 have forced many companies to rethink security for their critical data. Willner hopes this will lead to higher demand for IXEurope’s service.
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