April 29, 2003
New Availability Products
Both Liebert and American Power Conversion unveiled new products this week for the 24x7 uptime data center market. On Monday APC announced new models of its rack-mount UPS (uninterrupted power supply) products. Today, Liebert rolled out its Site Scan Web service for remote monitoring of data center equipment over an Internet connection.
APC has expanded its Smart-UPS line of UPS with the introduction of new 750, 1000 and 1500VA 2U rack-mount models. The Smart-UPS 1500 RM 2U is included as a component of APC's new InfraStruXure architecture, which integrates power, cooling, racks, and management products into single systems.
"Smart-UPS offers best in class reliability and forward-looking manageability to provide an ideal power protection strategy for a wide variety of IT equipment," said Ed Bednarcik, vice-president of APC's Business Networks Solutions Group.
Liebert says its SiteScan Web can monitor temperature changes and power interruptions in computer rooms and data centers and automatically notify key staff of any changes that merit attention. Systems supported include UPS and battery systems, static transfer switches, power distribution units, HVAC equipment, generators, fuel tanks, security access points and fire detection systems.
"Effective site monitoring is essential to maximizing uptime of critical facilities," said Steve Ziejewski, product manager for Liebert. "SiteScan Web gives stakeholders greater flexibility in how they support their critical systems, providing access to real-time monitoring, alarm and trend information from anywhere using virtually any Web-enabled device or appliance."
The Cost of Spam
The rise in bulk e-mail is getting tons of ink these days, as the amount and nature of "spam" in the Inbox seems to get more intrusive by the day. Much of the recent coverage of the bulk email issue has been either superficial or compartmentalized, dealing with with one or two angles of a multi-faceted problem which challenges lawmakers, ISPs and system admins as well as end users. An exception is this story in Internet Week, which provides some info on the financial cost of spam for ISPs, and takes the time to quantify the recent growth, examine its causes, and give an overview of current anti-spam strategies.
April 23, 2003
The Human Billboard
Okay, I give up! I vowed to myself that I wouldn't succumb to C I Host's blatant attempt to get free publicity by developing a promotion so zany that the media couldn't resist it. "You CAN resist!" I told myself. Sorry, but I can't. The C I Host "Human Billboard" promotion is so whacky that it has earned its moment of attention here on Wired Space. A guy named Jim Nelson has agreed to have the CI Host logo tattooed on the back of his head where he will display it for five years, according to a contract Nelson signed with C I Host, a large Texas-based hosting company.
"It definitely has gotten people's attention," Nelson said. "I get stopped daily by people asking me who C I Host is, what they do and why I have their name on the back of my head." Nelson said he agreed to the unusual use of his head to raise money for an online business.
The concept came from C I Host CEO Christopher Faulkner, who was hoping to find someone to agree to have the tattoo placed on their forehead. "I couldn't find anyone who would put the tattoo on their forehead but when I heard that Jim was willing to have the work done on the back of his head, I thought we'd give that a try," Faulkner said. "The results have worked very well to date."
So is this anything more than a cheap publicity stunt? Faulkner insists it's not, saying the initiative has led to 23 sales and boosted traffic to the C I Host web site by 12 percent. "We have started a new medium of advertising and since we have trademarked the phrase 'human billboard' we own and reserve the rights of future use," said Faulkner. "It is exciting for all parties involved."
So there. My moment of weakness is over, and I leave you with this question: when your CEO asks you how you selected the company's web host, what will you say? "Gee Boss, I saw this guy with a logo for a hosting company tatooed on his head, and thought it was so cool that I entrusted our entire web site to them!"
April 21, 2003
74 Bond Defaults
A story on today's Wall Street Journal (subscription required) summarizes a Standard & Poor's report predicting that looming junk-bond payments could bring fresh casualties among telecom providers. The story also quantifes the breadth of defaults in the debt-burdened sector.
According to S&P's risk-solutions unit, 74 telecom companies defaulted on $112.6 billion in debt between 1999 and the first quarter of this year. S&P calculates that another $63 billion in telecom debt will come due between now and the end of 2005. "The next big crunch could hit at a time when few expect a quick rebound in industry fundamentals," the Journal notes.
There's no doubt that these looming payments will be problematic for the debtors. But I disagree with the notion that the mere existence of this debt ensures more failures down the line. These debtor companies have a better chance of repaying the money than the 74 companies that already defaulted, simply because they are already survivors. Telecom providers that have made it through the past two years must have one of three things - strong management, the support of existing creditors, and at least a few paying customers. Many will possess all three.
It's always interesting to see numbers that quantify what's happened, and define the challenges that lie ahead. As the disclaimers always note, past results are no guarantee of future performance.
April 14, 2003
How Many Nines?
Time was when e-commerce firms were focused on having as many nines as possible in their data center uptime statistics. Four nines - that's 99.99 percent uptime - was good, but five 9s was even better. You'd see all kinds of data about how much every minute of downtime cost a web retailer. Maybe it's a sign of the times, but today I came across a press release from a major e-commerce firm touting three nines of reliability.
In today's press release about its data center scalability, e-commerce firm Digital River said its web site is handling as many as 1.7 million dynamic page views and 44,000 online orders per day. That's about a transaction every two seconds. The firm, which sells downloadable software products, also proudly noted its 99.92 availability track record.
Digital River's availability equates to 7 hours and 28 seconds of downtime over the course of a year. Four nines, by comparison, translates into 52 minutes and 33 seconds of annual downtime, while five nines equates to just 5 minutes and 15 seconds of downtime.
Downtime is not cheap. For the largest Internet sites, it can be hugely expensive. A 22-hour crash by the eBay web site in June 1999 cost the company more than $5 million in returned fees from auctions, according to Internet Week. But eBay survived, and many of the companies that built data centers to those multi-9 standards were crushed by the debt load of building those facilities.
In the cost/benefit analysis of the post-crash market, many companies are deciding that the real-world cost of buying an extra nine or two of reliability now outweighs the financial risk of hypothetical downtime later. To be sure, financial firms and other high-reliability operations continue to need all the uptime they can get. To most of the rest of the world, 99.92 percent looks like a number to brag about. At least from a marketing perspective, the allure of those extra 9s isn't what it used to be.
April 09, 2003
The Terremark Rollercoaster
Few Internet infrastructure companies have been as ambitious or as determined as Terremark WorldWide, the Miami-based builder of the NAP of the Americas. Before April is over, we'll likely know whether Terremark is here for the long haul or will wind up as another casualty of the overbuilding boom. In the past week, there's been good news and bad news for the company.
The April 1 announcement of an agreement to restructure the company's primary bank loan appeared, at first blush, to be good news. But it turns out the agreement hinges on Terremark raising $15 million in new capital before April 30, as well as a complex deal in which a group of Terremark shareholders are seeking to buy the company's trade debt and swap it for shares of common stock.
These efforts are complicated by the fact that, according to the company's SEC filings, Terremark is currently in default on $22.6 million in trade debt, $14.9 million in convertible debt, a $1 million funding agreement with MedNap, and $686,000 in bank debt. The company was also unable to pay rent on the Technology Center of the Americas (TECOTA) for January or February, according to SEC documents, and owes $550,000 for those two months. Terremark leases space at TECOTA, a 750,000 square foot Miami data center facility, where it maintains the NAP of the Americas.
Raising $15 million in less than 30 days with that kind of recent history would seem to be a longshot. But Terremark has shown an uncanny knack for using its common stock to raise money or reduce debt. A number of these deals have valued Terremark common stock at 75 cents a share, as does the current offer to buy debt owed to Cupertino Electric and Kinetics. The market has different ideas, as TWW shares have been trading around 40 cents, and even as low as 22 cents.
Then there's Friday's announcement that Terremark had won three government contracts from the Department of State to connect overseas facilities. It seems like a big vote of confidence for a company on shaky financial ground.
How can you explain all this? Do these government agencies and 75-cent-a-share investors know something the rest of the world doesn't? A possible clue might be found in the Jan. 9 release announcing a strategic partnership between Terremark and Hewlett Packard. It notes that the deal will provide Terremark with access to HP customers, products and "its finance capabilities." Is HP a candidate to step forward and bail out its new partner with the crucial $15 million? Stay tuned. We should know more by Ocean Bank's April 30 deadline.