Building in Britain

The demand for custom-built data center space from the financial sector continues on both sides of the Atlantic. TSYS, which handles payment processing for more than 12 million consumer and commercial credit accounts in Europe, today announced plans to build a brand new 53,000 square foot data center in Knaresborough, England. The new facility will replace an existing leased site in Harrogate, England.

"TSYS has successfully processed our clients' data from Harrogate for more than two years; however, with our continued success, growth, and expansion, we are building a customized data center which will meet or exceed all modern data center standards," said Lester Pulsford, the European Project Leader for TSYS.

"Building a customized data center from the ground up demonstrates our commitment to those markets, and will help us achieve our objective of becoming the leading transaction processor in Europe," said Bruce Bacon, Group Executive, International Services of TSYS. "This data center positions us to offer added value to European financial institutions."

Cable in Sale Talks?

We offer today's update with the usual "C&W Rumor Mill Grain of Salt" caveat. The Telegraph newspaper is reporting today that Cable & Wireless is negotiating the sale of its US operations (free registration required). The UK paper reports that Cable & Wireless "is in talks with several potential trade and private equity buyers about the sale of its loss-making US business and hopes to announce a deal within two months." This is no surprise, as the company said it would seek options on a sale when it announced its intention to exit the US market back on June 4. In the meantime, C&W customers are waiting for an indication of the future of the US business, while competitors are offering migration promotions to attract nervous customers. Thus far, many customers seem inclined to wait until the resolution of C&W's centers becomes clear. "A lot of the big customers have stayed with us," said C&W spokesman Chad Couser. The company has been active in trying to provide its hosting customers with current information, Couser said.

Competitors may want to be careful about what they say about C&W, however. Couser said that several competitors' efforts to poach customers have asserted that C&W is shutting its doors. "Our legal team has contacted a couple of them that have characterized our June 4 news incorrectly, claiming that we're ceasing operations," said Couser.

El Paso Mum on Lakeside

Struggling energy giant El Paso Corp. says it will exit the telecom business as part of its huge "Clean Slate" cost-cutting program, which aims to sell off $3.4 billion in assets by year-end to pay down debt. El Paso won't comment directly on the fate of the Lakeside Technology Center, the 1.1 million square foot carrier hotel in Chicago that El Paso Global Networks bought from the Carlyle Group in 2001.

In an earnings release last week, El Paso said it had decided to exit the telecommunications business "through a joint venture or sale of the company's business." Insignia, which is managing the Lakeside property, said it is continuing to actively seek new tenants for the building, and referred all ownership questions to El Paso - which wouldn't say much of anything. "We are going to be selling our telecommunications business unit," said El Paso's Aaron Woods. "That's the only information I can provide with regards to Lakeside."

The former R.R Donnelly Building was redeveloped as a carrier hotel by a joint venture between the Carlyle Group and Core Location LLC. El Paso's purchase of the building was driven by its interest in the interconnection business and meet-me rooms. As of March 31, El Paso valued its investment in its telecom business at $375 million, according to a Securities and Exchange Commission filing. But Stratecast Partners recently stated that El Paso Global Networks was "no longer active on a large scale."

Fly To The Planet

Lots of hosting providers are offering migration incentives to potential customers. But The Planet is going the extra mile - in fact, a lot of extra miles. The managed hosting provider is offering to fly qualified prospects to Dallas for free to inspect the company's 60,000 square foot data center. For companies who switch, The Planet is including up to 250 hours of transition services at no charge.

"We recognize that in today’s hosting environment, migration plans are currently a dime a dozen," said Lance Crosby, chief operating officer of The Planet. "In The Planet’s case, we’re prepared to invest our dollars upfront because it’s clear that our BMP (Business Migration Program) will offer qualified customers an instantaneous return on their investment."

Business executives who accept The Planet's offer will also receive a detailed migration plan, addressing the number of servers, switching configurations, load balancing and firewall evaluation, routing configuration, and backup and storage options.

What next, helicopter rides? Kidding aside, the "MigrationWars" are prompting increasingly aggressive incentives. Relocating a complex IT and hosting operation is always a hassle. But competition among providers is offering lots of interesting choices for savvy hosting shoppers.

Fiber and Security

Every day, folks in our industry deal with the dual nature of fiber-optic networks. These networks are gateways to a new universe of data and entertainment, and are valuable business assets. At the same time, they tie together our nation's critical infrastructure, connecting Wall Street to Main Street, which makes them of interest to terrorists.

This tension is not new, but was front-page news Tuesday for the Washington Post ("Dissertation Could Be Security Threat"), which examined how George Mason doctoral student Sean Gorman built a database mapping fiber optic networks from information found on the Internet. Fearful of its value to terrorists, government security officials would like to classify Gorman's work (which one web site quickly dubbed the World's Most Dangerous Database).

The story was widely discussed yesterday among network operators (see the NANOG archives) and dozens of weblogs (including Daily Kos, Hobbs Online and Instapundit).

There were expressions of surprise, even among some government security officials, that this kind of info would be public. There shouldn't be. Several commercial map companies sell fiber maps. At least three web sites identify all major North American exchange points, and at least four major American cities have detailed fiber maps online. At CarrierHotels.com, we're not disinterested observers, as our web site features information about buildings that serve as major telecom hubs.

This information is online because building owners, colocation firms and hosting providers are businesses that need to market their services. Connectivity is a key yardstick for companies evaluating hosting and disaster recovery. The government knows this, too. Most fiber maps that are online were placed there by economic development agencies touting their cities' connectivity.

What's more, classifying information about fiber networks is impractical. Laying fiber requires permitting and approval processes that generate voluminous public records. "Will backhoe operators need to have background checks if they're trenching for new fiber runs?" wondered one NANOG poster.

The genie is out of the bottle, if not on public web sites, than certainly in Google's cache. We can't pretend that public information on fiber networks can be completely hidden from terrorists, no more than it was hidden from Sean Gorman. A more productive approach is for the US homeland security team to know more about America's networks than the terrorists, and use that advantage to defend any vulnerabilities. Gorman's work, which is being shared with counter-terror officials, should be seen as a huge asset in that effort, rather than a liability.

FeaturePrice Chaos

The collapse of FeaturePrice has been a chaotic mess, leaving customers confused, frustrated and offline. Since the company announced its closure in April, the best source of information for customers has been message boards such as Web Hosting Talk where site owners can share information. A sale to Atlantic.net has led to further chaos, as Atlantic.net now says all FeaturePrice hosted sites are out of service. Site owners say their domains are displaying a statement from Atlantic.net urging them to shift their services. Meanwhile, the FeaturePrice.com domain points to Yahoo! web hosting. What the heck is going on? Here's what we know:

According to a July 1 statement posted on Atlantic.net's web site, "the former entity of Feature Price denied Atlantic.Net employees access to FeaturePrice’s equipment. Shortly after this occurred, all service to FeaturePrice's customers ceased due to unknown factors at this time." Atlantic.net says it is "working closely with all available professional, legal, and law enforcement channels to restore services."

According to a local TV report quoting a representative of FeaturePrice, the dispute involves obligations from Edison Telephone, a shuttered Ft. Myers, Fla. provider that is apparently controlled by FeaturePrice's owners.

Data from Netcraft shows that about 8,000 of FeaturePrice's 40,000 hosted sites moved to other providers in a 30-day period spanning mid-May to mid-June, with Verio gaining more than 1,000 of those sites while Rackspace (730) and Rackshack (606) also has large gains from former FeaturePrice customers. The other 32,000 are probably wishing they had as well. Stay tuned.

Missouri Mania

Which state is this year's hot data center magnet? If you guessed one of the existing major Internet markets, like New York or Northern Virginia, you'd be wrong. It's Missouri, where Kansas City and St. Louis markets are seeing an influx of corporate users seeking backup facilities. The latest prospect is Endur Corp., which plans to spend $60 million to build a new data center in the Kansas City area.

Denver-based Endur was founded in February 2001 and has financial backing from from Calpine Corp., a power provider based in San Jose, Calif. Endur's plans call for an underground data center of at least 81,000 square feet for ultra-secure hosting and disaster recovery for enterprise customers. Gen. Norman Schwarzkopf is on Endur's board of directors, and has been featured in the company's marketing. It's among a number of firms opting to build their own data center rather than buy a finished "plug-n-play" facility for 20 to 50 cents on the dollar.

If Endur decides on Kansas City, it would be the fifth major data center deal in Missouri in the past year, all involving centers of at least 80,000 square feet. In May, Reuters purchased a 100,000 square foot SAVVIS data center in St. Louis (with tenant) for $35 million, just days after DST Systems bought a former WorldCom data center in Bridgeton. Mo. for $15.7 million. In January, MasterCard paid $23.5 million to acquire a former Ameritrade data center in Kansas City, just months after Liberty Mutual moved into a similar 100,000 square foot site outside Kansas City, touting a total investment in excess of $80 million.

One explanation for interest in Missouri data centers is federal financial regulators' recent focus on "geographic diversity" for backup facilities for key Wall Street firms. Other advantages are the state's central location and Kansas City's history as a telecom hub.

But savvy local officials have helped seal the deals. A key ingredient in the Kansas City deals has been the city's use of Chapter 100 bond funding, which provided favorable terms for the MasterCard and Liberty Mutual deals. Chapter 100 incentives which would return 50 percent of the new income and property taxes generated by the project in return for a 10-year subsidy.

Rackshack On A Roll

Who's benefitting from the turbulence in the web hosting market? Among mass-market hosts, the clear winner in June was dedicated hosting provider Rackshack, according to new data from Netcraft, which provides some of the most useful and detailed information about the world of web hosting. Meanwhile, Verio and Interland saw significant net losses among existing sites as they consolidated data centers - a trend worth noting for Cable & Wireless and Sprint, which made news last month by announcing planned departures from the US hosting market.

A total of 1,066 web sites moved to Rackshack from other providers in June, while 524 Rackshack customers headed elsewhere for a net gain of 542 sites. Rackshack also acquired 3,078 new clients with no prior hosting relationship.

"Particularly notable is the 1,066 sites that Rackshack gained from competitors, over three times the number of the second most successful company, and that Rackshack's gains from competitor's outnumbered losses by two to one," Netcraft noted in its analysis.

Verio and Interland each had substantial growth on the month, but saw net losses among existing sites - a trend that suggests effective marketing, but trouble retaining customers. Verio debuted 2,170 new customer web sites, but saw 593 sites head for other providers, while just 322 migrated from other companies to Verio. Interland brought 1,431 new customer sites online, but saw 479 departures and 276 arrivals among existing sites.

Both Verio and Interland have been consolidating data centers in recent months. Interland said last week that it exited five data centers, reducing its hosting footprint from 60,000 square feet to 27,000 square feet. The company moved more than 3,800 servers to remaining data centers in Atlanta and Miami, and moved more than 95,000 customer accounts.

Netcraft is a British firm that provides network services and data. Their web site allows you to enter a domain name and learn the web host, web server software and uninterrupted uptime for that domain. In recent weeks they've added the new data on customer switching between hosting providers, updated on a monthly basis. It's a paid product, but this type of information could be really useful for providers doing a competitive analysis. While most companies know which hosts they're winning customers from, they probably have less information about who's winning business away from them.