Data centres will power tomorrow’s economy

1 Sep 2011

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Maurice Mortell led the sale of Data Electronics to TelecityGroup for close to €100m in cash. Digital infrastructure, he tells JOHN KENNEDY, will be the bedrock of Ireland’s economic future.

They have been described as the engine rooms of e-commerce, the boiler rooms of the digital age. None of the things we do online today – accessing social networking sites, online gaming, watching internet videos, putting apps on your iPhone – would be possible without them. They are the key asset of any self-respecting digital economy.

What am I talking about? Data centres of course, and Dublin happens to have one of Europe’s densest clusters of data centres with close to 30 in operation around the city.

It was therefore a surprise to many that one data centre business that attracted a recent €100m acquisition happened to be a 32-year-old Irish business called Data Electronics.

In recent weeks TelecityGroup, a major European provider of carrier-neutral data centres, acquired Data Electronics for stg£100m in cash.

The 32-year-old business has steadily evolved over recent years and has in place some of the most advanced infrastructure in the business. Two data centres – one in Blanchardstown and the other in Kilcarberry – have between them 4,600 sq metres of space to house servers to manage online and cloud businesses that use four megawatts of electricity.

TelecityGroup is a stg£200m a year European data centre giant that is listed on the London Stock Exchange. Highly profitable (stg£38m in 2010) the company operates 24 data centres across Europe, with multiple data centres in London, Frankfurt, Amsterdam, Manchester, Milan, Paris, Stockholm and now Dublin.

Data Electronics, which is now TelecityGroup (Ireland), recently completed its own €15m expansion in north Dublin that increased the overall data centre’s footprint to 94,000 sq ft, positioning it to support the country’s aim to attract some of the world’s largest technology and financial firms.

“Telecity sees Dublin as a huge opportunity and it fits in line with the aspirations of companies that want to have data centre capacity in multiple cities,” Mortell says. “They want Dublin to be one of their prime locations.”

As part of the acquisition the Irish operation headed by Mortell will also manage Telecity’s CityWest data centre which serves a large number of blue chip clients.

Powering tomorrow

On the subject of infrastructure that will power economic growth, Mortell points to the major investments Ireland has attracted in recent years that include Facebook, Zynga, Google, Gilt Groupe and LinkedIn.

He urges the State to ensure that the correct telecoms infrastructure is available across the entire nation to allow all regions of the country grasp the digital opportunity.

“If you look at the core elements of digital infrastructure – telecoms and power infrastructure – we need to ensure we are in peak shape. In terms of telecoms in the large cities, we’re well served and we have good trans-Atlantic and European links via Hibernia Atlantic and Global Crossing. However, direct links to Asia are weak.

“Asia’s emerging economies offer lots of opportunities, particularly around online content, gaming and gambling. It would be wise to start attracting Tier 1 Asian ISPs and telecoms providers to start doing business here.

“On the electricity side of things, again Dublin is well served but we are weak in some areas where there is lots of activity. It is time to take a long-term view on this infrastructure. The time line to capitalise is closing and those opportunities will go elsewhere unless we move fast.”

Mortell points to regional development and says that in terms of delivering fibre to the regions E-net, the entity that manages the various metropolitan area networks (MANs) in 94 towns, is doing a good job connecting these MANs to backhaul.

“The ability to offer interconnectivity out of the various data centres and into the regions is absolutely vital. We do that well and IDA Ireland and Enterprise Ireland will very easily build activity outside of Dublin.”

Mortell makes a good point. Enabling regional towns to partake in the digital economy will lift all boats in regions hit hard by the recession. Some towns, like Athlone and Letterkenny are excelling in this regard, but all towns that have the people and the infrastructure should be allowed to return to growth.

People also have the power

Aside from the infrastructure, the key element is people. As a father, Mortell is critical of the stop-start and stop nature of IT investment in Irish schools and believes that if we fail to equip Irish students with 21st century work skills, the jobs will simply go elsewhere.

“We have built broadband infrastructure into a large number of schools. But that broadband infrastructure is only as good as what the schools themselves internally can offer in terms of networking, the computer hardware and the skills to deliver a better education with ICT.

“My bugbear has always been the failure of the Irish education system to embrace this infrastructure properly and start using it as part of the syllabus for Junior and Leaving Cert – it’s the only way you’ll get the kids using this technology properly.”

He sees light at the end of the tunnel in the few places where school building projects are occurring such as in Bray. “Every classroom has smartboards, wireless networking and the science labs are well developed.”

Mortell maintains that there is a clear, intrinsic link between education that embraces ICT and the employability of future generations of Irish students in the jobs that Ireland is succeeding to attract in the form of software and gaming companies.

“The digital economy jobs will be there but only for the students that have chosen to follow the right paths,” he says, referring to the recent upswing in demand for science and IT courses in the recent CAO results, which shows students themselves are seeing what’s happening.

Echoing a sentiment espoused by Google chairman Eric Schmidt at last week’s Edinburgh Television Festival when he criticised a divide between the sciences and the arts in the UK education system, Mortell warns a similar divide is emerging in Ireland.

“The split that I am seeing is you end up with two sets of people emerging from college, those who are either business-focused or science and technology-focused.”

Mortell instead urges the education system to include science all the way through the education journey just like with maths. The concern is that with such a split, Ireland will fail to field the kind of versatile workers that Apple chairman Steve Jobs once said were vital to the kind of products Apple produces – the artists, musicians, poets who are also computer scientists.

“We need to make sure that we have the people who can participate in the digital economy when the jobs become available,” Mortell stresses. With 5,000 existing vacancies in ICT companies in Ireland today, those jobs are already there.

“It’s about attracting the foreign direct investment companies everyone wants to work for but also enabling indigenous companies to be able to hire the best and brightest,” he adds.

Photo: Maurice Mortell, managing director (Ireland) at TelecityGroup led a 32-year-old Irish data centre business called Data Electronics to expand its footprint in Dublin and recently sold it to Europe-wide data centre operator TelecityGroup for stg£87.6m

TelecityGroup’s Managing Director Ireland, Maurice Mortell, will be a panelist at the upcoming Digital Ireland Forum in Dublin on 30 September 2011. For further information on speakers and panelists, go to the website.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com