Irish data centre player aims to go global


21 Jun 2005

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An Irish company that was started by a former school teacher in a bedroom in Maynooth almost four years ago is on track to gain a 25pc share of the data centre market in Ireland and in its recent financial results turned over €3m in revenues.

Dublin-based Hosting 365 is one of the largest single independent hosting companies in Ireland and, according to founder and managing director Stephen McCarron, the company is planning to go global, having secured a major hosting project with the Government of Caribbean island St Lucia and is in the process of establishing an international reseller network in South Africa, New Zealand and Taiwan.

According to McCarron, the company was founded on the debris of the original data centre industry in Ireland that crashed with the loss of several companies in 2001. “Basically there were a lot of fire sales and we had very little start-up costs,” he told siliconrepublic.com.

McCarron was speaking at the opening of the company’s new 25,000sq ft offices at Park West Business Park, which was attended by Tanáiste Mary Harney TD.

McCarron said when he started the company it had three employees and 20 customers. Today the company has 20 employees and more than 30,000 customers, of which one quarter are Irish companies. Clients of Hosting 365 include Ryanair.com, Daft.ie, Budget Travel, Pigsback.com, Smart Telecom, Fexco, USIT, the Department of Social and Family Affairs, the Pensions Ombudsman, O2, Alphyra and the Irish Stock Exchange to name but a few.

McCarron explained the company currently has a 17pc share of the hosting market in Ireland but is aiming to grow this to 25pc.

“I came across the idea of establishing the company when I was working at the Department of Education and we were looking for someone to host our web server. Local providers were charging us up to €40,000 a year. At that time, US providers were charging only a couple of thousand for the same service so I knew there was an opportunity. We benefited from the dotcom downturn because assets were available through fire sales.”

Looking at the present environment, McCarron said most of the company’s competition comes from the US and UK. “More than half of Irish companies have their hosting based outside the country. We are offering them the chance to bring it closer to home.”

In recent weeks McCarron signed a deal with the St Lucian prime minister recently. Under the deal, Hosting 365 will provide technology, engineers and training to the government. The agreement looks to bring the Caribbean island up to the 21st century in terms of its IT infrastructure.

McCarron told siliconrepublic.com that apart from raising €50,000 from friends and family and some support from AIB and Anglo Irish Bank, the company has not taken on any venture capital or equity investment since setting up. Instead Hosting 365 has been relying instead on what he terms the “snowball effect” whereby the company grows consistently through taking on more customers that pay monthly fixed rates, rather than relying on utilities such as discount invoicing. “As a result we have grown organically and are quite profitable, with a net profitability of 25-30pc.”

However, that may yet change as McCarron said the company is thinking about taking on a number of small investors and is in talks with Enterprise Ireland to facilitate its international expansion plans.

Launching the new hosting facility, Harney pointed out that not only was McCarron a former national-school teacher but also contributed significantly to the public sector through a leading role on the Department of Education’s Scoilnet project. “Hosting 365 has seen its revenues grow from €20,000 to more than €3m in less than four years.

“Education’s loss is industry’s gain,” Harney concluded.

By John Kennedy