Plan B launches colocation services under new brand

Cloud backup and disaster recovery provider Plan B has launched a new brand, Southern Cross Data Centres (SXDC), under which it will offer data centre colocation services to regional integrators and large corporates in NZ.

“The national data centre network is dominated by the larger integrators. We are not trying to compete with these guys, but we have a national network, connectivity into some of the larger data centres here, and we saw an opportunity to expand backup and recovery co-location to production co-location.

We have launched these services to target regional integrators and large corporates. DC. We are not going to look after their production environment, we are going to provide them with real estate. And the intention is to support that with robust replication and recovery solutions into our cloud,” says Ian Forrester, MD at Plan B.

SXDC will tap into Plan B’s existing locations in Auckland, Wellington and Christchurch. The company will also be opening a new data centre and business recovery facility in Tawa, Wellington, in August, with plans to build or expand Auckland data centre capacity in the future.

“If they want to locate their production environment in our Auckland facility, we can back them up and give a local copy, and provide that backup replicated to Wellington. We will continue to grow and add to our data centres as we grow our national network. There will be two types of facilities, ones that are owned by us and others that we are connected to. You will see greenfield site development, expansion of current facilities, more connections and possible acquisitions in the near future,” promises Forrester.

SXDC’s first stage investment has required a commitment of $30 million from Plan B for the Tawa data centre and the acquisition of Disaster Recovery Group (DRG) earlier this year. However, Forrester expects that every one to two dollars spent on co-location will provide the firm with five dollars from other services.

He expects around $5 million annualised revenue for SXDC in the first year of operations.

“Our ideal client would be one that takes up both colocation and backup services. That is our ideal client. If someone came in and said they might not be able to take it up on day one but we would have the opportunity to look at it with them in the future, we wouldn’t say no.

“If we can get around $10 to $15 million of annual revenue that would be great. Through critical mass that will give us good profit as well,” says Forrester.

SXDC will exist as a sub-brand under Plan B.

"There is the ability to spin it off in the future as a separate entity if we choose to. But at this point we have no intentions for that. It will be a part of Plan B because we have other services that will be relevant and customers might like to add on," says Forrester

Plan B expects to add around eight staff members this fiscal with plans to add more based on growth.

“We have got a footprint in NZ. The focus is to continue to grow that. But we are under pressure from our global customers. We do represent the majority of the large insurance companies in NZ and more than 50 per cent of the banks, excluding the trading banks. We are being pushed to go into Australia and that’s the case of when not if.

“Australia is a lot more advanced in their regulation than we are. So they are in a position where they can charge for being average, and we have to be cheap, innovative and exceptional in delivery to purchase our service unless they are governed by global rules. We think we have something special to talk to and do in Australia,” says Forrester.

Plan B is looking to be in Sydney before next Christmas, and Forrester states that Melbourne could take place sooner based on demand.

“Cloud services will be available much sooner, but having a brick-and-mortar and office facilities, that is a big investment for us,” says Forrester.