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Telecity Redbus float plans
Although Telecity Redbus is not yet known to investors, it is very well known in its business: renting space in its data centre for critical servers, together with. The Telegraph reports that it is considering a floatation for around £500m (found via FT Alphaville.)
Almost all companies offering services such as web hosting house their equipment in data centres owned by companies that specialise in providing facilities with security, easy network connectivity, fire, air conditioning and power. The rent out space by the rack (a floor to ceiling cabinet), cage (a set of racks) or room.
At the other end of the market large companies can take simply rid themselves of the chore of managing a data centre of their own.
This is a classic outsourcing business. Customers can share economies of scale, reduce management overhead, and have more flexibility to scale up and down quickly.
The article mentions the possibility of a trade sale. The obvious buyer would be a direct competitor. Given that the market is consolidating this is likely.
A sale to a telecoms company is also possible. This could compromise their ability to offer neutral access to multiple carriers, but I do not know the business well enough to assess this. Using multiple carriers is essential for high reliability.
The market is growing, but growth is very depend on certain areas of technology spending. The drivers are similar to those for telcos data businesses.
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