John Hughes

With data centres in key cities across Europe, as well as cloud, hosting, IT infrastructure, data security, and network services, Telecity is equipped to enable its customers’ digital strategies. With the company’s customers including big businesses such as Microsoft, Spotify, Amazon, Xing, News UK, and Groupon, providing excellent service and operational delivery are critical. The CEO Magazine spoke to Executive Chairman John Hughes about how Telecity has reached where it is now, the values of the company, and what the future holds, including a recommended offer to be acquired by global player Equinix.

The CEO Magazine: How has Telecity grown and expanded over its existence?

John: I think it’s probably worth giving you a little bit of background history of the industry. The European data-centre business got started really in the late 90s with a series of businesses that were very early private-equity backed at that time. A number of them listed in the 1998 to 2000 time frame and, frankly, almost every one of them crashed and burned. The reason was that they were just too early. The market hadn’'t developed, and the model that the early players played out was basically ‘build capacity and the customers will come’. The unfortunate reality is they built the capacity and the customers took quite a bit longer to come.

There were two businesses, one originally called Telecity and one called Redbus Interhouse, and they were merged by their private-equity owners. A lot of the excess capacity and a lot of the excess spend was flushed out of the system. From the mid 2000s, you started to see a very robust and vital demand for high-quality, highly connected data-centre capacity. That'’s really the genesis of the journey we’'ve been on for 10 years. We then relisted the business on the main market in London in late 2007, one of the last IPOs that got completed at that time before the global financial crisis.

To give you a sense of scale of what the business was then, it was very UK dominated and was doing a little less than £100 million in turnover. Compare that to 2014, when revenue was more than three times that amount. We now have 39 data centres across 12 cities in 11 countries. The business has grown phenomenally since IPO on the back of, amongst other things, a real increase in data-centre demand driven by the growth in internet traffic in its broader sense. While it’'s still a relatively new market, it is one that'’s become a lot more mature and a lot better understood and, I think, a lot more appreciated by customers as being an important part of their business. Telecity'’s data centres are now part of the critical infrastructure of the digital economy.