Piers Daniell

Along with our recent move to a new office in London we also this year opened a dedicated Network Operations Centre (NOC) in Hemel Hempstead. With a growing client base it was important we kept service levels the same and had staff within a few feet of client’s hosted equipment. With our four datacentres in the city predominantly used for connectivity, most customers have taken space in the Hemel site, Centro. The site went live last year and is cutting edge, offering high levels of power perfect for virtual environments.

With part of the site unable to take racks due to loads on the floor it was deemed perfect for a new support team who will operate on a 24/7 rota. With the rest of the site already manned 24/7 it also helps with Health & Safety regulations on lone workers.

But what has proved most successful in my mind is the technology we deployed to link the two offices together. With Fluidata’s current support team based in London it was important the two teams could communicate effectively with each other. Therefore when designing the offices we implemented HD video conferencing which sits permanently at the end of each team to allow them a ‘window’ to the other. By running it continuously it means that very quickly the technology is forgotten about and the relationship between the staff could flourish.

It doesn’t mean there isn’t any on site contact, but it does mean it can be reduced, and both offices are able to work more as one. Visitors have been impressed by the quality and its effectiveness. You just walk up to the screen (or for the support teams sit at your desk) and talk to each other. I think the perception is one that video should be the thing sitting in the boardroom collecting dust, rather than an integral part of the office environment. There are, of course, other benefits such as green credentials and ROI (in terms of reduced transport) but for me the main driver is the collaboration it drives within the business.

While I don’t think BP should deserve too much sympathy I am concerned by America’s obvious double standards in the wake of on the Gulf of Mexico spill. Granted there has been a huge environmental impact on the area but to make BP fully responsible when it wasn’t directly responsible for the drilling (Transocean were) seems like a tough position. However, BP have admitted fault and will be, they say, fully responsible for the cleanup. So the fact that America are now drawing up amendments to prevent BP for doing any more drilling in American waters is completely unacceptable. It is as though they are saying the accident was deliberate and that BP, unlike all other oil companies, somehow takes no consideration when it comes to safety. Or is it that they are all as bad as each other, and America is using it as an excuse to offer permits over to American oil companies instead.

The fact is this spill will cost BP billions of pounds, so to imply this isn’t hurting them is an understatement. BP employs more Americans than any other nationality and contributes substantially to their coffers; this should at least give BP a fair hearing. I can’t see, for example, such a stand point being taken against an American company in the same position. It is quite incredible when you look at the safety record of other oil companies and the sanctions put upon them in comparison to BP.

Nigeria for example has sustained a large number of spills, so much so that it is believed to have had more environmental impact than the Gulf of Mexico spill. But I don’t remember ExxonMobil having their knuckles rapped for spilling more than a million gallons of oil into the delta for seven days on 1^st May. The fact that the Niger delta supplies 40% of all crude the US imports should surely have made more headlines? Apparently over 1.5 m tons of oil sin 2006 (50 times the Exxon Valdez tanker spilt in Alaska) has been spilled here in the last century.

So if BP are to lose licences on the basis of this crisis, then the same rules should be applied to all oil companies. Problem is there wouldn’t be any oil companies left!

We laughed in the office on the news that Easynet is finally being sold off by Sky as I have been saying it would happen for over a year. Some believed me, some didn’t but my reasoning was sound. Ever since Sky bought Easynet it has been an uneasy marriage of a vast consumer brand and a very business focused one. Easynet was one of the first to get involved with LLU (local loop unbundling) in the UK and were able to launch products way ahead of BT. Something Sky obviously liked when they paid well over £200m for the business even though, by then, they were actually buying an old network and much of it needed to be upgraded.

Unlike O2, who at the same time, paid a fraction of that (£50m) for BE. They had a much newer infrastructure, and after all the upgrades to make it fully national was less than Sky originally paid for Easynet. But when you look at how Sky treated Easynet it was still segregated within the organisation and divisions were created to ensure a nice clean break when the time came to offload it. I think they did very well to get £100m for it, especially as the actual valuable part, the network, has remained in Sky’s hands meaning Easynet are now just a third party with a good supplier agreement. But again, like when Sky bought Easynet originally, it was done by a company who didn’t understand data communications and this time they found some bankers who obviously were taken in. I don’t think the amount demonstrates value for money and it will be a difficult business to float/sell in a few years when the venture capitalists decide they want their money back.

Obviously for us it probably means a bit more competition in the coming months as the business gets some much needed direction, but with no innovation over the past four years they are going to struggle to catch up. While they have an enviable client list, I am sure the customers coming to the end of their dire 5-year terms will be ready to for a change. So good luck Easynet – you are going to need it!

Unlike the rest of the population I am not a fan of the government’s recent tax on banks. I feel it is too needy and will, like most taxes, reduce the tax take rather than increase it. I am especially against the EU’s attempts to put a cap on bankers bonuses and feel that any business should be concerned about such legislation.

As a business owner it is my prerogative to decide how to reward staff and should have nothing to do with government policy. Appreciate it is just the finance sector at the moment but it could very well be any other industry in the future. The fact is if I decide to pay staff using a generous commission structure, even if the industry as a whole doesn’t, then that shouldn’t be anyone else’s business. My thought process is a well incentivised sales person offers our clients better service and help to ensure the success of the company. If the banks feel the same then it shouldn’t be down to government to decide best practice.

Instead government, and more importantly the busy bodies in Europe, should be concentrating on putting restrictions in place on the industry as a whole. I believe that by requiring banks to hold a certain amount of their trades as deposits (or by increasing that threshold) they will be less likely to fail as there would be something to fall back on during a recession. Also by reducing the amount of readily available cash in the business, less will be likely to go to staff in the form of bonuses.

This kind of regulation is very much a low touch policy which still instils entrepreneurship and the desire to grow but should fix big problems in our society. It is, for example, a travesty that parts of the country are already suffering from a hosepipe ban when the water companies should have been investing for the last two years in more capacity. Again regulation stipulating the amount of water to have in reservoirs for each citizen would ensure supply during times of drought.

So my message to government is no need to tax or mess with individual businesses, just provide clearly defined regulations which protect the wider economy.

I had an enjoyable morning with BT Openreach last week as they outlined their plans over the coming years. While the business isn’t the most loved within the industry I thought the presentation was well thought out and impressed by the staff. What was interesting was their candid nature on growth aspirations and while they don’t see dramatic increase on their £5 bn or so of sales each year they do foresee dramatic changes in how this is made up within their product portfolio.

One key thing for Openreach is to continue to push new technology which may reduce margins or return on more profitable legacy technology. They seem to understand that with any change there is always loss of existing business but in most cases made up for with the replacement and the new requirements it spawns. When local loop unbundling came in the impression was BT revenue would fall but instead it actually grew as more businesses entered the broadband space.

One key legacy technology that is the bread and butter of Openreach is ISDN technology and they were very clear on their expectations for this to be replaced with SIP technology. When it will happen exactly they don’t know, as customers seem slow to adopt, but it will happen and they are ready for it. You even get the impression they want the switch to happen faster. Obviously for companies such as ours this is good news especially as we recently launched a range of products under the ADVANCE brand which deliver seamless failover to multiple networks, perfect for delivering the kind of SLA customers expect from ISDN. All we need now is more SIP carriers who can persuade businesses to make the switch.

On our office launch night we had a friend of mine, Nicolas Clement, came down from the Cotswolds and entertain us with his excellent street magic. Obviously close up magic is very difficult and he is one of the best, with a CV a mile long on all the celebs he has entertained. What was even more impressive was the tricks he managed to perform while using our high definition video conferencing system in the boardroom.

And this wasn’t a video call to another office within our building but all the way to Austin, Texas! This is home to the manufacturer, LifeSize, who have headquarters there. Being full high-definition with a 1980 x 1080 resolution and 60 frames per second the picture quality was perfect. It also only took up 1.5 Mb/s of bandwidth to make the call.

While many talk about the benefits of video conferencing it is these kinds of demonstrations that really demonstrate how the technology has moved on. So it isn’t just about being more green or cutting travel costs, it can also be fun!

As a business internet service provider we generally see quiet evenings, high traffic loads during the day and pretty much no traffic over the weekends. Last week however was slightly different as the country woke up to a hung parliament and proceeded to spend the rest of the day following developments. As you can see from the graph traffic on the 4^th, 5^th and 6^th May was relatively normal, however on Friday traffic loads increased dramatically as people demanded to know what was going on.

We saw a higher use of BBC’s IPlayer which became more prevalent as the day wore on as employers obviously relaxed the use of it within local networks. On a more national level we did see bandwidth restrictions in some operator’s networks as their backbone peaked. Roll on the World Cup!

I visited Microsoft’s London offices today in Victoria to learn about their hosting strategy and new products they are launching. Being involved a little bit in this internet industry I thought it was important to keep up to date with the application layer. Obviously being Microsoft they are a little behind on the curve but nothing prepared me for how boring they made it all sound.

Never before have I ever felt like sleeping in a conference but within ten minutes of the presentation starting I felt myself drift away. How can anyone make such an exciting industry so dreary? They have a fantastic office, with top of the range everything, even a fully catered subsidised canteen but still talk as though the world is coming to an end. There was really nothing new apart from little bit better Exchange, little bit better Outlook and little bit better Windows. It is like the software equivalent of Porsche where every new model is pretty much identical to the previous one but goes that tiny bit faster. Their biggest growth product is SharePoint which apparently got to $1bn in sales quicker than any other product in its history. Well great, but it is still boring and is definitely no IPod moment for Microsoft.

The business has to be very careful over the coming years because, from what I can see, it is becoming very much like IBM. It is becoming the goliath with companies such as Apple and Google retaining the right to David. Cloud computing is a very exciting time for our industry and something we have fully adopted in house (Fluidata) as an example for our clients. I just wish Microsoft used its might to help lead rather than follow and come up with something new that would set my pants on fire.

I think it is very important when selling a product that the business itself uses whatever it might be. This definitely helps to iron out those annoying issues that a customer may see but also helps to understand the product better. It is something we have always taken very seriously at Fluidata and with our imminent office move thought it would be time to take it to the next level.

At the moment there is a lot of talk about cloud computing, but bringing that story to fruition is taking time, and somewhat frustrating with the conflicting views and different ways of cracking the proverbial nut. For some years we have been successfully delivering Layer-2 private wide area networks to our customers using our PWAN technology, but now we have gone a step further to demonstrate what can be done with it.

I am writing this article at my desk in the office but this actual machine is virtual (ie not installed on my local PC), residing in one of our datacentres. And that is not all - so is everything that my virtual PC talks to such as Exchange, SQL and our intranet. What used to all reside in our office has now made the transition to the datacentre delivering a large number of benefits without the headache you might imagine.

By using the PWAN technology, moving the firewall into the cloud was the first step so that our offices (just opened another outside of London) could communicate on private IP to the datacentres without a VPN (Layer 2). This then meant that office servers could be moved and accessed from the datacentre. IP addressing, Active Directory, DNS etc all now reside in the datacentre and serve our local networks through the PWAN. We then went through the process of virtualising the desktops to VMware’s excellent ESX product so that each desktop is still independent to the other and accessed via the Remote Desktop application.

This leaves us with the latest Windows 7 software on our existing PCs with the flexibility to hot desk to any PC in either of our offices, or anywhere in the world via a VPN to the PWAN. And because the majority of traffic is only mouse clicks, keyboard strokes and screen refreshes, our usage of the network has actually dropped.

We will continue to adapt the virtual network but with the flexibility of our new hosted environment there is an infinite amount of customisation possible. I am sure more businesses will follow our lead when they realise how easily it can be implemented.

I attended a very interesting breakfast meeting hosted by The Stone Club in association with Coutts. The topic was around private equity and it’s involvement within our economy, and how opportunities exist for it, as an industry, to help improve the position of British business. One point that was made right at the beginning was that while there is huge public outrage and hatred for all things financial, it is a very large industry employing hundreds of thousands of people and can’t be pigeonholed with the tyrants who brought the global economy crashing down. Yes they were reckless, and took risks with cheap credit, but remember private equity actually invests in business and hence can only reap the rewards from actual success rather than smoke and mirrors.

Private equity has always had a bullish reputation as its unrepentant goal has always been to make lots of money. But does this mean it deserves the hatred and does it in fact have a larger role in helping Britain out of the hole we currently find ourselves? There seems to be a general consensus that while private equity can be bullish it does make the businesses it invests in work harder and has actually saved companies during the economic downturn.

One business owner mentioned that when his business was publically listed he struggled to invest and grow his company, due to the changing ownership and diverse shareholders. However, now under private money, he has been able to invest and grow the business during a recession making the company even more successful in 2010. So while private equity may want more return, they understand a simple calculation, which is that more money comes from more investment.

It is a simple truth Government would be wise to take note of, and while it has no money to invest, there is bags of it outside the UK ready to be directed into British business. However while the tax regime remains so complex (we have the most complicated regime in the entire world), and rates remain high this money will not come into the UK. Our tax ranking compared against all the world economies currently stands at 84^th, down from 4^th place. So there are 83 economies better suited for investment before Britain and that is before you consider the fact that business is now global.

Apparently 80% of all private equity comes from funds outside the UK which will now dry up as Government uses tax as a political football and gives no certainty to the long term tax structure. There is obviously a requirement to lower taxes (which, it has been proved, will increase revenue for the Government), but more importantly the uncertainty is killing private equity within the UK. Most people don’t realise that investments are made for 5 – 7 years on average and hence require a stable structure to persuade investors to commit.

None of the above will actually cost the UK anything, and when the tax take for January doesn’t even cover outgoings for that month, there isn’t a moment to loose in making immediate policy changes. Another point raised was Government spending, and the necessity to reduce spending from 50% of GDP to 40%. Long term we need to bring that down to 30% to compete, once again, as an economic super power.