Interview with Dmitry Fokin, managing director of IXcellerate

TAdviser: Tell, please, about key parameters of data center: how many racks, what dimensions, power and so on?

The data center is a live organism. It is under construction modularly therefore constantly grows. The design capacity of our DPC – 13.7 MW, the designed area of the building - 6 thousand sq.m., and in general it can extend up to 12 thousand sq.m. of useful area. It is already entered under clients of 1.5 thousand sq.m. in machine halls plus 500 meters of auxiliary and 500 meters of office spaces.

Now we set about 200 racks, is signed or at a final stage of approval of contracts for 300 racks. The arriving requests significantly exceed our opportunities therefore we begin to build the third phase of data center.

TAdviser: If you extend up to 12 thousand sq.m. how many racks to be located in DPC?

In standard option it would be possible to place up to 6000, but taking into account accommodation of clients in the selected premises and individual shields with the increased security it is more real to expect 4000-4500 racks.

TAdviser: Tell about the biggest customers. Who are they?

Unfortunately, I cannot tell about many because this information represents a trade secret. In principle among clients at us is as telecommunication companies, online services and the IT companies, and corporate clients, including multi-national corporations, international financial institutions, large retail chain stores, and other organizations processing large volumes of data.

TAdviser: On what clients can you disclose information?

From telecommunication the companies the equipment VimpelCom Telia Company (before TeliaSonera) NTT Sprint Orange Business Services (Oranzh Business Servisez, Orange Business Services) RETN MSK-IX Mastertel Macomnet , etc. is placed with us. The other day the contract was signed with Rostelecom, Megafon and MTS. Within the won tender to us moved a rack Euroset and online store La Redoute. We provide services Thomson Reuters and some other the international companies.

TAdviser: For what purpose, for example, Rostelecom addresses you if they are owners of own big data centers?

Same network. If there are here clients who demand service of these operators, then they need to have at us a presence point. Then they will be able to exchange traffic here, i.e. the point for peering appears here.

TAdviser: Whether you open revenue? At the end of 2014, for example.

We private company and requirements to open activity indicators are not imposed to us. But on the other hand – and why in general to reveal her? It is theoretically possible to estimate of course the size of DPC on revenue, but clients do not accommodate in DPC because of its size. In the industries of DPC the main thing – service quality and reliability and to estimate DPCs by the amount of income, in my opinion, it is the wrong trend, it approach distracts the client from others – indicators, much more important for it. It is all the same what to go to restaurant because it big, but not because there tasty feed! We, of course, see ourselves among the largest operators of DPC in Russia, but reliability, service quality and customer service are the most important after all. And we place emphasis in the work on it.

TAdviser: Since September 1 became effective the updated law on personal data according to which personal data of Russians need to be processed and stored in Russia. Whether you see increase in demand for the services with respect thereto? Whether clients in this regard address you, how the owner of the DPC which is in Russia?

Constantly. The wave of requests now obviously increases, especially from the western companies. If at the beginning of 2015 people still looked narrowly and waited whether there will be indulgences or measures for postponement of the introduction of the law in force, then it is already clear to all that no indulgences and delays will exist. All began to take measures actively.

To us requests from the American, English and other foreign services almost daily arrive. And earlier, happened, came on one-two in a week. In addition, I am constantly invited as the speaker to actions where these subjects are discussed by both state bodies, and private business. Naturally, many companies began suit tenders about movement of the large installations from Europe to Russia.

TAdviser: Can you give an example of one of them?

I cannot. These are the largest companies which are engaged in Internet trade, business connected with tourism these are the companies providing the financial information, the companies providing different content on the Internet. But whether still will be.

Now we participate in several large tenders which began recently, over 100 racks everyone. I consider that we have every chance to win as our positioning is aimed, first, at quality of service, secondly, - on transparency, and in the third, - on the advanced technical solutions and also values and methods of service which are demanded by the western companies.

We also initially got this experience there. Our founders are the western people with very serious background in the field of a tsodostroyeniye. Guy Willner was engaged nearly 20 years in data centers in Europe, constructed 14 DPCs and sold them more than for $550 million Equinix company - to the largest operator of DPC in the world. After that he personally headed division of Equinix in Europe several years. Enormous experience, and such people whom it brought together around itself(himself) it is simple here at anybody is not present.

Therefore in work with the international companies we have all premises for success. However, and in local tenders we feel rather not bad. I will not hide, happens that we lose, at the same time giving the best prices and providing great, even unique, technical solutions. Such situations can not always be understood, but experience, it is all the same useful to us. In the serious companies where procurement experts look at actual infrastructure parameters, at service quality, at operational processes and so on, we always are on the ball and we look in their eyes surely and convincingly.

TAdviser: Usually foreign companies complain that the law on personal data, of course, for them was an unpleasant surprise. In this plan at you a situation absolutely other?

Actually not only the foreign companies, but also Russian complain. We work now with several huge Russian retailers who try to transport from Europe the personal data, the systems of SAP and others, measured by tens of racks. For them it is of course additional "headache" but as the Russian citizen, I support this law. Because, first, Edward Snowden to us is a lot of interesting told few years ago, and I am not sure that to us, Russians, will be comfortable to be everything so dependent with the personal data from the foreign states and their interests. Secondly, several times, let at the level of rumors, information about blocking of work of financial clearing centers, some websites and so on appeared. Also it turns out that if at us all economy is tied on the fact that data and processing capacities are abroad, then in fact and all our economy can be stopped because of external factors, and it is rather risky.

And the third why I as the citizen, I support data migration to the country - because am about the domestic IT industry which obviously gains steam worldwide. If we store more than 70% of data not at ourselves, then, in fact, we will subsidize the western IT industry instead of supporting the, and our country will lag behind further in this segment. It and so in many technology segments not the leader. Can move data and it is troublesome, but actually it is very important for all of us, for our independence, statehood and economy. Look at world history: any reformist movements face resistance. But if without reforms, walk still in bast shoes...

TAdviser: Let's return on a step backwards. When the American, European Internet services transfer servers to Russia and begin to process the data here when you win, you provide them space entirely and are one of their partners in Russia?

From the point of view of premises we can precisely provide any request, but there are companies which want to be placed on several platforms. Couple of examples. One very large hi-tech American company wants to have one platform in Moscow, one in St. Petersburg. Therefore we entered the partner commonwealth with the St. Petersburg DPC whose quality of infrastructure and the operational principles we consider comparable to ours, and together with them made common offering. Other known consulting company wanted small space, on only 6 racks, but too carried on two different Moscow platforms. And we offered DPC which we consider the good, fair competitor with a worthy technology platform, to participate together with us in this tender.

TAdviser: Why when your DPC was created, as the location Moscow, but not, for example, Tver where is cheaper was selected?

Multi-national corporations and financial institutions are of special interest for us as for the neutral DPC (which is not attached to the specific operator by the TV set of services) as clients. And so – more than 80% from them are concentrated in Moscow. And all main money which can be earned from DPC in Russia are earned in Moscow so far. This situation with time will change. Earlier and Moscow was practically without DPCs, everything is good in its season.

We are going to go east further behind traffic, but gradually and the considered steps. We already began to develop regional partnership. There is an agreement with the St. Petersburg company, partnership with one Khabarovsk company, partnership in Yekaterinburg. These are trial steps. If projects begin to go well, then, at some point, it is possible, we will begin to redeem their areas and to resell them, and then can be with them and we will merge. The development strategy is progressive.

We do not like to advance events at all. Our most experienced employees endured a number of crises about the career and do not like to rush gung-ho slogans. Success to us seems in as much as possible to coordinate need of growth to demand. So it is too quickly simple not to increase capacities because there is a wish, and to increase in parallel with demand. Otherwise business will be subject to high risks against the background of low profitability. Excessively aggressive development strategy can have an adverse effect including on clients, and it should not be.

Our engineering solutions are designed in such a way that it turns out quickly enough and at the same time qualitatively to deploy add-on modules, but not to build everything huge blocks at once, spending serious money and calling into question economic profitability of these projects. In our market there are examples when new, very impressive size of the platform long stood idle waiting for the first clients, eating both essential capital, and operating expenses.

TAdviser: Tell, please, slightly in more detail in what neutrality and absence like that consists?

Neutrality for the classical colocation system is a fundamental factor. If the ecosystem of DPC does not provide market conditions for clients, then, in fact, you can win often tenders, giving cheap placement of a rack, but then the client will overpay three times because additional services will be too expensive (for example, communication services, integration, cloud services).

There are several examples when the DPCs belonging to operators won tenders, and then clients tried to move from there when they understood the real price label taking into account telecommunication services. Now the same with cloud services. Many develop the cloud services, and the client can buy these services only from them. In fact, the customer gives all the business to DPC, one may say, takes out the brain and on a plateau gives to their infrastructure. The dependence very strongly increases and if something ceased to suit the client, then just like that somewhere to migrate it will not turn out because it is very difficult, expensive and dangerous. Quite another matter, when the client accommodates in DPC in which several cloud providers and a set of the telecom operators guaranteeing freedom of choice for the customer are provided.

I directed financial company in due time, we stood in not really big, but all known DPC. And so, when I lifted accounts, in them the price of the stoykomest was only 700 dollars, and really we paid nearly 4000 dollars in terms of a rack because they turned on additional services there. It is not our method. We are proud of the transparency. We believe in ethic business, and we are selected by those clients which they share with us our views and values.

TAdviser: So in a case with the operator, the client can become dependent on his very expensive communication services, and in a case with integrator, it will be expensive services of a cloud platform?

Yes. We have many integrators which we consider partners. But anybody has no exclusive – all cooperate with us on the same conditions, as others, at all equal opportunities to sell the services to the client. Cloud providers at us now 8 or 9, and their quantity constantly grows. Everyone has niches and unique solutions, and some services for them identical, 1C, will assume. This is also this market competition. The client who gets big advantage from it selects. About 5-6 integrators work with us now.

With partners at us the fair and open relations: if the integrator brings the project with the customer to us, we guarantee them decency and support, everything that is connected with quality customer service. And it unambiguous their client. We have a mutually advantageous team work. It is also the principle of neutrality for partners, specially worked approach and the special affiliate program – both for telecoms, and for integrators, and for cloud providers.

TAdviser: You write in the marketing materials that the DPC is certified on Tier3 level. It is about certification of design or the ready platform?

We underwent audit and received the certificate of a full compliance to the level of reliability Level 3 on categories "project", "construction" and "operation" according to methodology of IBM Reliability Rating System applied by corporation to DPC around the world. The DPC of IXcellerate has the third level of reliability and availability – in different standards and methodologies it is called Tier 3 or Level 3, either Rated 3, or Class 3. But means approximately identical level of availability. Our DPC is designed, constructed and is operated proceeding from availability at the level of 99.999% that in practice allows no more than 5 minutes 16 seconds of idle time a year.

But matter not only in the certificate. No certificate will save from risks of a stop of business operations, disappearance of the equipment and a simple human factor which can cause irreparable damage. In a question to work we rely on the experience of founders and shareholders checked decades and global trends in the industry. We consider that first of all, clients when choosing DPC should trust own technical experts or employ consultants who should confirm the operational level of reliability and availability of services of data center. The certificate serves as an additional argument, but not a basic factor rather.

TAdviser: Where data centers develop what the following technology level of development of DPCs consists in?

Several trends are traced. On the one hand, it is visible that energy consumption on a rack on average grows, i.e. DPCs become more high-loaded and larger by the size. According to DPC in the medium term - it will be a bigger object, with even big consumption of electricity. Well and respectively, that to cope with it, more advanced solutions on heat extraction are necessary. And if to glance further away for the horizon, then in 10 years we will see mainly huge DPCs. It is not less than 10 thousand sq.m. even in Moscow.

TAdviser: In terms of profitability it is more profitable to have big DPCs?

Of course, economy at a scale has huge value in this industry. And the next step when and it does not save, the science will move towards development of processing which consumes 10 times less electricity.

TAdviser: Because we have intense relations with the West now, in Russia speak about import substitution much. Do you look towards the technologies developed within the country? Whether arise from customers some questions about it?

We look. From customers of questions for the present did not arise, but we think of it as we are at a stage of the conclusion of partner agreements now with some equipment suppliers which is collected in Russia and also with equipment manufacturers, working at the Russian software.

TAdviser: Who is the owner of IXcellerate?

We have no uniform owner, in the company about 20 participants. The Russian company Ikselereyt LLC for 100% is 'subsidiary' of Ikselereyt Limited which is incorporated in London. It has both corporate, and private owners. There are several individuals who invested in the company at early stages in 2011-2012. There are corporate large investors - it is International Financial Corporation entering a world bank group, and Sumitomo Corporation, large Japanese consortium which is engaged in the most different types of activity, including, and investment.

TAdviser: Except the Moscow data center Ixcellerate has other DPCs?

We are included into the international alliance of data centers of IDC-G (International Data Center Group) integrating commercial data centers in 12 countries on 4 continents. It is the union of DPCs sworn brothers worldwide with whom we communicate, exchange experience, we participate in actions. So far in Russia at us the first DPC. But we are in an active stage of negotiations on purchase of the platform in the south of Moscow.