Communities in the Cloud

In the 1990s community of interest networks (COINs) emerged to take advantage of rapidly developing Internet protocol technologies. A small startup named BizNet on London’s Chiswell Street developed an idea to build a secure, closed network to support only companies operating within the securities and financial industries.

BizNet had some reasonable traction in London, with more than 100 individual companies connecting within the secure COIN. Somewhat revolutionary at the time, and it did serve the needs of their target market. Management was also simple, using software from a small company called IPSwitch and their soon to be globally popular “What’s Up” network management and monitoring utility.

However simplicity was the strength of BizNet. While other companies favored strong marketing campaigns and a lot of flash to attract companies to the Internet age, BizNet’s thought leaders (Jez Lloyd and Nick Holland) relied on a strong commitment to service delivery and excellence, and their success became viral within the financial community based on the confidence they built among COIN members.

As networks go, so did BizNet, which was purchased by Level 3 Communications in 1999 and subsequently the COIN network was dismantled in favor of integrating the individual customers into the Level 3 community.

Cloud Communities

Cloud computing supports the idea of a COIN, as companies can not only build their “virtual data center” within a Platform as a Service/PaaS model, but also develop secure virtual interconnections among companies within a business community – not only within the same cloud service provider (CSP), but also among cloud service providers.

In the “BizNet” version of a COIN, dedicated connections (circuits) were needed to connect routers and switches to a central exchange point run by BizNet. BizNet monitored all connections, reinforcing internal operations centers run by individual companies, and added an additional layer of confidence that helped a “viral” growth of their community.

Gerard Briscoe and Alexandros Marinos delivered a paper in 2009 entitled Digital Ecosystems in the Clouds: Towards Community Cloud Computing.” In addition to discussing the idea of using cloud computing to support an outsourced model of the COIN, the paper also drills deeper into additional areas such as the environmental sustainability of a cloud community.

As each member of the cloud community COIN begins to outsource their virtual data center into the cloud, they are able to begin shutting down inefficient servers while migrating processing requirements into a managed virtual architecture. Even the requirement for managing high performance switching equipment supporting fiber channel and SAN systems is eliminated, with the overall result allowing a significant percentage of costs associated with equipment purchase, software licenses, and support agreements to be rechanneled to customer or business-facing activities.

Perhaps the most compelling potential feature of community clouds is the idea that we can bring processing between business or trading partners within the COIN to near zero, as the interaction between members is on the same system, and will not lose any velocity due to delays induced by going through switching, routing, or short/long distance transmission through the Internet or dedicated circuits.

Standards and a Community Applications Library

Most trading communities and supply chains have a common standard for data representation, process, and interconnection between systems. This may be a system such as RosettaNet for the manufacturing industry, or other similar industry specifications. Within the COIN there should also be a central function that provides the APIs, specifications, and other configurations such as security and web services/interconnection interface specs.

As a function of developing a virtual data center within the PaaS model, standard components supporting the COIN such as firewalls, APIs, and other common applications should be easily accessible for any member, ensuring from the point of implementation that joining the community is a painless experience, and a very rapid method of becoming a full member of the community.

A Marriage of Community GRIDs and Cloud Computing?

Many people are very familiar with project such as Seti At Home, and the World Community GRID. Your desktop computer, servers, or even storage equipment can contribute idle compute and storage capacity to batch jobs supporting everything from searching for extraterrestrial life to AIDS research. You simply register your computer with the target project, download a bit of client software, and the client communicates with a project site to coordinate batch processing of work units/packets.

Now we know our COIN is trying to relieve members from the burden of operating their own data centers – at least those portions of the data center focusing on support of a supply chain or trading community of interest. And some companies are more suited to outsourcing their data center requirements than others. So if we have a mix of companies still operating large data centers with potential sources of unused capacity, and other members in the community cloud with little or no onsite data center capacity, maybe there is a way the community can support itself further by developing the concept of processing capacity as a currency.

As all individual data centers and office LAN/MAN/WANs will have physical connections to the cloud service provider (IaaS provider) through an Internet service provider or dedicated metro Ethernet connection, the virtual data centers being produced within the PaaS portion of the CSP’s will be inherently connectable to any user, or any facility within the COIN. Of course that is accepting that security management will protect non-COIN connected portions of the community.

Virtually, those members of the community with excess capacity within their own networks could then easily further contribute their spare capacity to the community for use as non-time critical compute resource, or for supporting “batch” processing. Some CSPs may even consider buying that capacity to provide members either in the COIN, or outside of the COIN, and additional resource available to their virtual customers as low cost, low performance, batch capacity much like SETI at Home or the Protein Folding Project uses spare capacity on an as-available basis. Much like selling your locally produced energy back into a power GRID.

We Have a New, Blank Cloud White Board to Play With

The BizNet COIN was good. Eleven years after BizNet was dissolved, the concept remains valid, and we now have additional infrastructure that will support COINs through community clouds, with enabling features that extend far beyond the initial vision of BizNet. CSPs such as ScaleUp have built IaaS and PaaS empowerment for COINs within their data center.

Cloud computing is an infant. Well, maybe in Internet years it is rapidly heading to adolescence, but it is still pretty young. Like an adolescent, we know it is powerful, getting more powerful by the day, but few people have the vision to wrap their head around what broadband, cloud computing, diffusion of network-enabled knowledge into the basic education system, and the continuation of Moore’s, Metcalf’s, and other laws of industry and physics.

COINs and community clouds may not have been in the initial discussions of cloud computing, but they are here now. Watching a Slingbox feed in a Jakarta hotel room connected to a television in Burbank was probably not a vision shared by the early adopters of the Internet – and cloud computing will make similar un-thought of leaps in utility and capabilities over the next few years.

However, in the near term, do not be surprised if you see the entire membership of the New York Stock Exchange and NASDAQ operating from a shared cloud COIN. It will work.

Developing Disaster Recovery Models with Cloud Computing

How does a small or medium business ensure it can meet the basic needs for disaster recovery and business continuity? Whether it be Internet-facing applications, or Enterprise-facing applications and data, one of the most important issues faced by small companies is the potential loss of information and applications needed to run their operations.

Disaster Recovery Point and Time ObjectivesDisaster recovery and business continuity. Recovery point objectives and recovery time objectives. Backing up data to offsite locations, and potentially running mirrored processing sites – it is an expensive business requirement to fulfill. Particularly for budget conscious small and medium-sized companies.

Christoph Streit, founder of Hamburg-based ScaleUp Technologies, believes cloud computing may offer a very cost-effective, powerful solution for companies needing not only to protect their company’s data, but also reduce their recovery point objectives to near zero.

“In a traditional disaster recovery model the organization must have an exact duplicate of their hardware, applications, and data in the disaster recovery location” explains Christoph. “With cloud computing models it is possible to replicate applications virtually, spinning up capacity as needed to meet the processing requirements of the organization in the event a primary processing location becomes unavailable.”

ScaleUp did in fact demonstrate their ability to replicate databases between data centers in an October 2009 test with Cari.net, where ScaleUp was able to bring up a VPN appliance and replicate data and applications between Germany and Cari.net’s data center in San Diego, California.

While there may be issues with personal data being in compliance with European Data Protection Laws, nearly every company and organization around the world participates in a global market place. This means applications and data serving the global market cannot be considered local, and the next logical step is to extend access and presentation of the company’s network presence as close to the network edge (customers) as possible.

Some companies may have physical network capacity in multiple geographies, others may look to companies such as ScaleUp to develop relationships with other cloud service providers to allow “federated” relationships.

Until a true industry standard is determined to define data structures and protocols to use between cloud infrastructure and platform providers, it is probably easiest for relationships to develop between companies using the same cloud platform as a service (PaaS) application. Such is the case with ScaleUp and Cari.net, who used a common platform provided by 3Tera’s AppLogic.

The cloud service provider industry will provide a tremendous service to small and medium businesses which normally cannot afford near zero recovery time and recovery point objectives. Whether it is real-time replication of entire data bases, subsets of data bases, or simply parsing correlated data from edge locations at regular intervals, disaster recovery modeling is changing.

A backup location can be made in some cases by logging into a cloud service provider and opening an account with a credit card – or through a very fast negotiation with the service provider. Certainly not without cost, but potentially at a much lower cost of operation than in models requiring physical data center space, hardware, and operations staff at each location.

The important lesson for small companies is that both disaster recovery and a company’s ability to recover from either a physical disaster such as a fire in their data center, or data corruption, may limit or prevent a company’s ability to continue operations. Adding cloud services to the disaster recovery model may provide a very powerful, simplified, and cost-effective model to protect your business.

3tera and AppLogic SWAG Moves to the Cloud Computing Retro Collection

CA and 3tera have announced CA’s acquisition of the innovative cloud computing Infrastructure as a Service vendor. This is a great thing for Computer Associates, and perhaps a bit sad for the cloud community in general. Why? It is hard to fit the energy and enthusiasm felt when walking into 3Tera’s Aliso Veijo office into words. A tight group of committed entrepreneurs and innovators, with a bit of cockiness due to the unique stature they held in the cloud computing community.

Not that Computer Associates is a bad company. In fact, they have always been one of the best kept secrets in business and enterprise software. Rock solid systems, professional sales and engineering – just not as well known to the broader community as other large enterprise systems vendors.

AppLogic brought the cloud community many firsts. The first to integrate IPv6 into their provisioning system. The first to really simplify the drag and drop provisioning process. Perhaps the first to really test and prove the concept of globally distributed processing and disaster recovery models. And they are really great guys.

Bert, Peter, Sean, and the rest of 3tera’s public face spent a tremendous amount of time supporting the community through participation in training events, community organizations such as the Convergence Technology Council of California, the Any2 Exchange Community – all with not only good community spirit, but also providing strong thought leadership to motivate the community into learning more about cloud computing and the future of information technology.

We will deeply miss 3tera, and hope the team will eventually regroup with a new set of ideas, and lead us into another generation of technology that will further enhance the industry’s ability to deliver a true, global, massively distributed cloud computing reality.

Computer Associates will bring value to the cloud community as well. With the power of CA’s organization behind recent acquisitions such as 3tera, Oblicore, NetQoS, Orchestria, Platinum Technology, Netreon, and others related to process, database and large data set management, the stage is set for increased competition in the cloud service industry. CA has the ability to provide a broad understanding of all aspects of enterprise and Internet-facing tools equal or better than IBM, Microsoft, or any other full-service integrator.

We will look forward to seeing the product of 3tera integration into the CA family, and hope the innovation and enthusiasm 3tera’s team brought to the cloud community is not swallowed up into a large company bureaucracy.

Martin Levy Looks into the Future of Hurricane Electric and the Internet

This is the third part in an interview series with Martin Levy, Director of IPv6 Strategy at Hurricane Electric. In this segment Martin discusses the future of Hurricane Electric, IPv6, bandwidth, and global Internet development.

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Pacific-Tier: Can you cite one defining moment that really makes Hurricane Electric stand out as a company within the Internet industry?

Martin Levy: There are a couple of different moments.

From an internal operations point of view the company was able to migrate to a new IP backbone about four years ago. That took us from the pre-IPv6 native mode, into pure IPv6. That fundamental point done well in advance of a lot of other companies.

It may well have gone unnoticed in the industry (at the time). But it is not unnoticed at this time.

We have taken that base, taken that moment and have been able to run this extremely stable, and extremely reliable IP backbone for v4 (IPv4) and v6 (IPv6) support.

So you go back to that point in time, and you (think) of having a ceremony and a toast at that point. As quiet as it was, and a very engineering moment as it was, it really redefined Hurricane Electric. That was an event really about four years ago.

The second one is a totally different measure. The second one which will be talked about at just an anonymous level for obvious reasons was when we brought in our first core v6 customer at a major wholesale level, and the details are (they were) a much larger company (than Hurricane Electric).

We were able to do that because the customer requirement was v6. The customer purchase was for v4, paying 99% of the bill, v6 maybe 1% of the bill. That’s the reality. We have no way of saying v6, from a bandwidth point of view is a massive issue at the moment.

But when that occurred, that was the moment that we knew it wasn’t at the bandwidth levels v6 was operating at, it wasn’t about the number of eyeballs that were enabled, or the number of servers, it was about the fact the enterprise and the wholesale market had realized why v6 was so important.

When that event occurred, which is now a couple of years ago, we knew that we had the right product at the right time for the marketplace. And the test of time has proven that since then.

Pacific-Tier: One final question. Anything you would like to share with us about Hurricane’s vision for the future, or where Hurricane may be going this year, next year, or after?

Martin Levy: We have a plate full!

We have expansion in Europe. We have additional bandwidth into Asia, because there is nothing slowing down in Asia whatsoever.

We have a new data center that we’ve opened in California, a new phase of a data center we’ve opened in California about two or three months ago. And it is quickly filling up.

So I would say it is growth in most measurable directions. The geography is an obvious one. We are looking as we did last year at additional cities in Europe – that’s an ongoing project. In Asia it’s more about more bandwidth into the same cities, and on the network we are just looking at more and more customers who take v6 seriously and are looking for a provider that has that solution at hand without it being a special.

Pacific-Tier: Any final points?

Martin Levy: This Internet thing – it may catch on!

Its not that we are going to see a new Internet. It’s that we are going to see with v6 an Internet that has truly matured, and we’re going to see even more accelerated growth. Whether it be within the mobile wireless world, or other worlds, we’re going to see enormous growth.

If we have this interview again in five years we are going to laugh at how little bandwidth was available in 2010. And we are just going to blow the roof off bandwidth-wise.

Pacific-Tier: Thank you for your great counsel!

Previous segments of Martin’s Interview:

  • Part 1 – Martin levy Discusses the Global Urgency to Deploy IPv6
  • Part 2 – Martin Levy Explains Hurricane Electric’s Success in a Tough Economy

Martin Levy Explains Hurricane Electric’s Success in a Tough Economy

This is part two in a series of interviews with Martin Levy, Director of IPv6 Strategy at Hurricane Electric

Hurricane Electric is one of those rare companies that have survived, and grown in the past two years. A private company, Hurricane Electric has become one of the largest Internet Service Providers in the world, and is a leader in IPv6 deployment. In this article Martin Levy shares a few ideas on how Hurricane Electric approaches their business and continued growth.

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Pacific-Tier: It’s been a really rough economy, and we’ve seen networks (Internet Service Provider networks) falling fairly rapidly over the last two years. How is it that Hurricane Electric continue to grow, continues to survive, and continues to expand your network presence?

Martin Levy on Internet Economics and SuccessMartin Levy: We’re very conservative, which is a total counter statement to being a technology advanced company. But let me explain.

Hurricane Electric is a private company. We are funded internally, we are funded by growth, and as much as the company is 15 years old we have grown steadily, we have grown conservatively over those years.

The beauty of the company is that we haven’t gone off and spent somebody else’s money and randomly done stuff with the hope it would succeed. Everything we’ve done, has been done with methodical care – quite conservatively, and done when we know that it will help with our revenue stream, and we will grow the company.

We did that with our growth into Europe, we did that with our growth into additional and larger data center space, we did that with our growth into Asia – projects that have been going on for about a year and a half, maybe longer.

All of that, based on the fact the company is private, and the company is dedicated to just doing things that have lacked in the industry, and not just doing things that are at a random level have meant that we have been able to survive the initial; “host.com era,” in the classic 2001, 2002, 2003 timeline.

But also the recession that we’ve had over the last year, year and a half, where we were set up to hunker down without any problem and didn’t really change much of our day-to-day operations.

We also are very lucky in the sense that we have a customer base, that quite frankly has always grown, and has always grown in its bandwidth needs. In the data center business there has been a requirement to add more customers, more space for every customer, more bandwidth for every customer.

In the wholesale IP word we have the same thing. Because as much as we’ve had a recession from a banking and from a Wall Street point of view, we’ve not had a recession in a bandwidth point of view. The requirements of our customers have been to grow bandwidth continuously, throughout that time, and that has been to our advantage. Here in the United States, and also in our global locations.

Pacific-Tier: How important is it for Hurricane to be a global company, rather than concentrating your efforts on growing your points of presence in North America? How important is it to become a global company today?

Martin Levy: That’s a great question!

I’ll push it back as a question, but answer it myself!

Is the Internet local or global? We find that connectivity has in nearly every situation, a global component. There is as much interest in the updates on somebody’s status on a Facebook or on a Twitter, or whatever social networking locally as well as globally.

The requirement, as we need to see it, for large amounts of connectivity, in Europe, in Asia, and the gateway cities within the United States, whether that be on the East Coast, the West Coast, or facing north or south, those bandwidth requirements have been forever increasing. And that has never been more so than the last couple of years where we’ve seen some amazing spikes (in traffic).

We as a company, because we run a global IP backbone, have always been in a great position to help service customers in those other geographies. It doesn’t mean that we ignore our backyard, the Silicon Valley, or the Los Angeles, or the New Yorks, or Washington D.C. areas – far from it.

But the reality is that as bandwidth prices for transport go down, we also see the requirement for larger and larger bandwidth to be pulled in to some of the cities around the globe, and because we have a global network we are ready to service them (networks in global locations served by Hurricane Electric).

Previous articles in this series:

  • Part 1 – “Martin Levy Discusses the Global Urgency to Deploy IPv6”

Martin Levy Discusses the Global Urgency to Deploy IPv6

I met Martin Levy for the first time in Honolulu at the Pacific Telecommunications Council ‘2007 conference. After several coffees at the Kalia Tower, and an hour or so discussions on data centers, networks, and IPv6, I knew I had found a true evangelist in the Internet industry. Several more conference coffees in different locations around the world, and I became one of his IPv6 disciples.

As a senior member of the Hurricane Electric team, Martin enthusiastically spreads the IPv6 word to locations around the world including Slovenia, Hong Kong, Amsterdam, Taipei, Brussels, and the European Commission – in addition to acting as a consultant to IPv6 developers and global digital government policy groups.

An accomplished speaker and writer, Martin brings a unique talent effectively delivering IPv6 thought leadership and actual IPv6 network deployment experience to the Internet community.

Martin Levy IPv6 Dir of Strategy at Hurricane ElectricThis is part one of a Pacific-Tier Communications Thought Leadership series interview with Martin Levy, Director of IPv6 Strategy at Hurricane Electric. Hurricane Electric is a leading Internet backbone and colocation provider specializing in colocation, dedicated servers, direct Internet connections and web hosting.

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“Internet Protocol version 6 (IPv6) is the next-generation Internet Protocol version designated as the successor to IPv4, the first implementation used in the Internet that is still in dominant use today” (Wikipedia)

“With only about 10% of IPv4 address space remaining, organizations must adopt IPv6 to support applications that require ongoing availability of contiguous IP addresses.” (ARIN)

“Organizations relying on the Internet to conduct business have only a limited time to act and adapt to changing technology. Those that delay, run the risk their online services may become unavailable to a rapidly growing number of users.” (APNIC)

Pacific-Tier: Tell me a bit of the sense of urgency on (the Internet community) moving to IPv6, and what Hurricane is doing related to the topic?

Martin Levy: Urgency is a word that has been used now for many, many years when it comes to v6. But the reality is, that we have, for every years that has passed, gotten closer to where there are real limitations on the amount of new v4 (IPv4) space that can be added into the market place and added into the existing global Internet.

2010 really marks a time when we have less than two years of available space that can be allocated to the core registries, to the RIRs (regional Internet registries). And as this year and next year go by, we are going to start seeing rules that have never been seen on the global Internet. We are going to see people with requirements to substantiate their use of v4 space in ways that they have never done till this point.

They will see a requirement for documentation, for signatures, sometimes from corporate executives, officers of the company – at least in the US. This will be a whole new world.

If that doesn’t wake people up to the fact that the world is changing, it is unclear what will.

Pacific-Tier: What is Hurricane doing itself to help push this issue along?

Martin Levy: We have always been evangelizing v6, but we’ve been doing it in a way that the users are encouraged to implement v6. In our case “users” means our wholesale providers (Internet service or network providers) that are buying our existing v4 services.

So we have made it easy at the wholesale level to bring on IPv6 connectivity anywhere on our backbone – anywhere globally on our backbone. That, as well as going out into the community and talking about v6 has been a core effort we’ve brought to the table.

It can get better. In some cases we can help a customer understand just how easy it is now, as opposed to five years ago. There really isn’t, for anybody who had bought fairly new hardware any problem enabling v6. There is a set of golden rules to follow from a security point of view. From an operations measurement and monitoring point of view.

But in reality most people can enable v6 themselves and get their feet wet, with great ease. We have spent our time talking with people and convincing them of that fact, quite successfully.

Pacific-Tier: I hear a lot of companies talking about tunneling v6 through and existing v4 network. Is Hurricane running what we would call a “native v6 network” within your backbone?

Hurricane Electric Internet ServicesMartin Levy: Everything on our backbone is 100% native. The core network, all of the Internet peering ports, all of the customer ports, the connections into our data center customers are all what is called “dual-stacked.” In other words they all run native v6, and, if you want to use the term, native v4.

That means that every connection provided is provided as a pure v6 connection. Now, we also provide, because it is needed, “tunnel broker service.” This is a v6 tunneled over v4 service. We’ve been doing this for many years. And there are users, whether they are at home, on a broadband connection in this country or somewhere else in the world, whether they are a software developer working inside a company that needs a v6 connection for software testing… Or whether they are just a home enthusiast, or in some cases it could be a whole university in some foreign country that has no way to get a native v6 connection. They can use the tunnel broker service.

They can use the tunnel broker service with BGP for full routing if they need to, and connect up to the v6 global network though a tunnel connection. In some cases there is no other way to do it.

But the core of the network, every single POP (point of presence or locations), 26 or 28 of them around the world are all configured native v6.

Pacific-Tier: What is your feeling about how your end users, or your actual customers, are using IPv6 in their networks? Is it becoming a fairly mainstream enterprise protocol, or do you have a lot of work to do to teach or provide thought leadership in the market in that area?

Martin Levy: I won’t lie. There’s an awful lot of education that needs to be done, and there’s an awful lot of work that needs to be done – and in some cases even within wholesale or broadband networks. You can break it down into two or three different issues.

The first issue that touches any network is just their outside connectivity. Their core backbone, and links to the outside world, links into providers like ourselves (Hurricane Electric). Those have to be enabled for v6.

And because they are network entry points, that brings up the issue of network security right at the beginning of the day. The interesting thing is, network security for v6 is really identical to v4 – it’s just the syntax that changes.

The addresses are longer, and you have to use colons instead of dots in the addresses. But the theory is always the same. If I deny access to a particular service over v4, I would deny access over v6. The service could be something as simple as SNMP polling of your core router. It could be more complicated like an internal set of web servers.

Any filtering that can be done with v4 can be done with v6.

The second part that needs to be thought about is what part of your network needs to be first seen by the outside world, or in the v6 arena. And it boils down to simple service like DNS for converting names to numbers. Potentially, if you are an enterprise, inbound and outgoing email.

Obviously, your web site. If you are able to bring up your website as v6-enabled, if you are able to bring up certain web services as v6-enabled, you can take those off the list. But even that doesn’t hit the prime point, which broadband and wholesale buyers of IP transit need, and that is IPv6 connectivity to their end users.

In this area are cable MSO, DSL, or wireless network end user environment, they are going to work with all of the protocols and equipment needed to connect to their end customers, and potentially the education of the end customer.

And that is the part that still needs the most amount of work. But luckily for us at Hurricane Electric, we are a wholesale provider. So our issues are really in getting the first stage done, and potentially helping with the second stage. The third stage is left to the customer. And that (the third stage) is the hard part.

But from a wholesale point of view we get our part done, and we know that we can at least enable IPv6 to move and ensure the routing is as solid as it would be in the v4 world.

Pacific-Tier: So do you see new applications, and emerging technologies such as cloud computing, or global distributed cloud computing models that require a lot of addresses to support their VLANs and their internal process – do you see that helping enterprise adjust or have a better sense of urgency on how critical it is to start employing v6 in their networks?

Martin Levy: The story of IPv6 and cloud computing comes up on a regular basis, and it is a real, real requirement. It doesn’t seem to go away, and the two items (IPv6 and cloud computing) seem to be well-connected to each other.

But what’s more interesting as you talk to enterprises is you start hearing a story of “what are you going to do in a world that internally, the complexity of your internal network has started to push the bounds of how you would run an IPv4 network. Clashing private address space, stuff like that.

So we see even outside of cloud computing, where an enormous number of addresses are needed, that in complex enterprises or enterprise back office systems, we see benefits to the very large address spaces being given out. It may not be considered to be a killer application, but it definitely provides a solution far better than can exist in some legacy v4 environments.

Pacific-Tier: Do you have an opinion on the ability of companies such as Verizon Wireless, AT&T Wireless, T-Mobile, as they deploy their LTE and 4G networks. Will that serve as a further catalyst to force companies into the IPv6 world?

Martin Levy: I think the most pleasing part of that is that we are seeing a clear, solid understanding how and why IPv6 and IPv4 must be taken into account within the LTE or next generation wireless world. If you go back and look at very early documents on other wireless structure that have come into the marketplace, they were always very v4-centric.

This has now changed. Now it doesn’t mean that you and I are going to end up throwing away all our 3G, and in some cases 2G hardware, and be forced to go out and buy LTE or 4G hardware and magically get v6. The reality is the back office requirements for those wireless providers still have a lot of work that needs to be done.

Still, the end-user connectivity is being defined with v6 in mind. I have a lot more faith that as of today we’ll see a lot more items like that show up in the market place in a more seamless manner.

Keep in mind that we already see not every, and not so much the popular ones, but we do see certain smart phones in the marketplace that are v6-enabled and applications capable. They are v6 capable over their WiFi connections vs. their 3G connections. But at least it shows the base technology inside smart phones and smart phone products acknowledges why v6 is important.

People may not be using it very much, but that will change.

Pacific-Tier: Where does Hurricane fit in the big picture with IPv6 today? How do you rank with other networks in your category of size, scope, and scale of your IPv6 deployment vs. the rest of the network world?

Martin Levy: Over the last few years the amount of v6 traffic that we have carried has just grown enormously. It has grown by two different measures.

In actual raw bits moved around, while small compared to IPv4, we’re moving a heck of a lot more IPv6 traffic now than we were a year, or maybe two years ago.

The other measure the number of routes, the number of customers, the number of adjacencies, and the number of peering connections with other core backbones we have. We have taken those numbers and eclipsed every other provider, putting us in the number one position globally.

That is a testament to the network engineers, and the dedication the whole company has (to IPv6). And we’ve really done that because v6 is not a side project for us. V6 is not an “add on” to our existing v4 service. V6 is not something we do as a special. It means that every single connection, every customer, every peer, every interconnect on our network, is v4 and v6-enabled.

We keep each protocol on equal footing so we don’t have at any point the thinking that v6 is special. It is part of our DNA, and it is part of our base thinking for everything that we do on the network.

Traveling the Telecom Highway with GTT’s Scott Charter

A very cold and icy evening in Denver. One of my new data center customers, WBS Connect, was based in Denver under the technical leadership of Scott Charter. Scott gave me a call, and asked if I had the time to get together and meet, since I was in town for some business meetings and he had some ideas I might be interested in.

Several hours later, with staff at the Rialto Café getting annoyed, and my head hitting the data absorption and comprehension threshold all of us experience when talking with people a whole lot smarter than us, I knew I’d met a true visionary.

Ideas. Ideas about technology, about business, about people, and about the world we live in. Beyond the technology, Scott is a guy who genuinely cares about people – an excellent role model for young entrepreneurs.

Pacific-Tier: Today we are talking with Scott Charter, who is with GTT.   Scott, how do you like Hawaii?

Scott Charter from GTT at PTC 2010Scott Charter: Love it. I’ve been here a few times (Hawaii) before, but this is my first time on Oahu.

Pacific-Tier: We’re at the Pacific Telecommunications Council annual meeting. Scott agreed to sit down and talk with us a little bit. Scott, you’ve had some changes professionally – what’s going on?

Scott Charter: December 16th, WBS Connect, my company that I co-founded in 2002 was acquired by GTT. The deal had been brewing a couple months prior (to December), but we announced it December 16th and we’ll call it the end of January when the integration will be complete.

Pacific-Tier: So what does that bring to the business? Aside from obviously the acquisition and things, does that bring any benefits to WBS, your customers, or to the business that didn’t exist before?

Scott Charter: That’s two pointed questions. I’ll start with my customers at WBS Connect. They will continue to receive the same level of service they did from WBS Connect, and now from GTT, with an augmented NOC (Network Operations Center), we are a much larger entity as a publicly traded company. So from a financial perspective it is a much healthier organization that is continuing to grow.

We feel that what we brought to GTT was something they didn’t have, and that was a network. GTT was a switchless, global network integrator, and it was an easy add-on to give them a global Ethernet backbone.

Pacific-Tier: So how about the services WBS Connect was offering? Video services, and different types of value-added services to your network, where do they exist today?

Scott Charter: The growth on where we are on a commodity-based, circuit-based, will only continue to grow as we layer on. We have to be careful though, not to layer too much in at once. We don’t want to have too much culture shock.

So for example, I don’t really see us striking out immediately and driving more video. Conferencing services as a primary add-on for our business customers, as a business product, give till the second or third quarter and we’ll roll back into that.

Immediately we’re talking about going back to all of the GTT customers with more Ethernet. Going into the WBS customer with more off-net circuits that GTT had already done as well.

Slowly, when we get out of that, we’ll go more into managed services. I see us actually going more with other managed services in addition to video, such as managed security. Probably by Q2.

Pacific-Tier: How about WBS Connect, and I hate going back to that, but I will… You were a very open network. You would peer with other networks, you would peer with CDNs (Content Delivery Networks), do you feel that your ability to integrate or work with other companies would be changed by your acquisition (or merger) by GTT?

Global Telecom and TechnologyScott Charter: I’m learning as we’re going, because I am now working with a publicly-traded company. Things are a little bit different than when you are with a privately held, entrepreneurial small organization that is quite dynamic.

We want to bring the dynamic nature of WBS Connect to GTT, however we also have to remember that we have certain parameters that go with a publicly-traded company.

On top of that you also have an organization that really focuses on ensuring they maintain good margin. Now what we’ve done in the past with WBS Connect was that at times we’d take a lower margin deal in order to expand our network, and ultimately grow our value in another way that was not standard “Hey I need to have this much margin.”

I don’t know how much of that we’ll continue to do, but if it doesn’t make sense financially we probably won’t do it moving forward.

Pacific-Tier: So you’ve always been a leader, a thought leader in the industry. There are things changing now such as carrier Ethernet exchanges, Internet exchange points, cloud computing and the integration of CDNs into the network itself. Tell me your visions. What’s happening now? Where will we go into the future that will either support, or change, or direct the future of our business?

Scott Charter: There are so many great things that I see on the horizon right now that all seem to layer back into one another. So when we talk about additional transport services that are required to talk about enhanced cloud. Machine-machine activity, and the way they are going to interact is the future of where hosting goes – for sure.

I mean just standard dedicated servers and things like that are… I don’t want to call them a typewriter of the future, but things are definitely going to evolve. I think that as a WAN operator as part of our business we definitely see the need to connect more and more data centers that have this idea of being able to understand the need for this cloud infrastructure.

And I think you are going to find that you are going to have a global consolidation in certain points around the world that are going to mirror this cloud that is going to happen in let’s call it 10 mega data centers, at least, for computing. And we want to be a part of that.

One of the things I’m really excited about though, is the game-changing effect that I believe that 4G will have on incumbent connectivity in our existing infrastructure. If you’re a LEC (Local Exchange Carrier) with DS3s, OC3s, out to an enterprise base, that’s going to compete in a way with 4G. Call it 18~24 months from now.

I see us steering GTT towards embracing 4G as a part of our WAN business.

Pacific-Tier: Are you going to get into the tower business yourself, or are you going to connect towers?

Scott Charter: Connect towers for sure. You know, continuing to talk about any type of carrier extensions or servicing that wholesale side. But in addition to that I see from a large enterprise side, really seeing us drive more and more into that (4G and connecting via the wholesale business).

Pacific-Tier: With 4G, and LTE – ultimately 4G, does GTT get into the wireless business yourself or are you going to stay in the terrestrial business?

Scott Charter: That’s to be seen. I’m cautious on what I say now on where we’ll be, depending on where we need to be then. When I look forward now – I’m only talking about LTE. No offense to WiMAX, but I feel the real play there is with LTE.

It’s not just North American LTE, it’s global LTE. So seeing the Vodafones, the China wirelesses, and how they’re going to drive global saturation of LTE, let’s call it over the next four years, five years possibly, we’ll want to play there one way or another. I’m not sure how we’ll do it.

Pacific-Tier: So in 18 months what is the difference between terrestrial cable, terrestrial services, and wireless? Is there a difference?

Scott Charter: I’m afraid that spectrum is going to be a too little, people are going to be so excited that we might almost have another iPhone paradox that we see now with AT&T – that their own success with their partnership with Apple has caused some people to believe that the AT&T 3G is completely saturated.

Now there are some people who have some data on it which says that’s not truly the case. But there is enough of a customer backlash that it’s a customer perception that the AT&T network, due to its own success, has lead to its current situation that people are accepting it.

Now, fast forward a couple years and say what happens if we actually eat through all that LTE spectrum that’s out there now that that Verizon and AT&T – let’s just talk that North America’s acquired, wouldn’t that be interesting if that too becomes so saturated that we’re now reverting back to just terrestrial, as we’ve eaten up all the wireless.

Pacific-Tier: Tell me something, domestic or international, where’s your focus?

Scott Charter: 50-50. Let me take that back. (the) Opportunity for growth, 80-20 international. Consistent with where we are today, 50-50. New growth, international.

Pacific-Tier: Why?

Scott Charter: Under-served markets with a much higher profitability margin. It’s much easier to go in and saturate MENA, or LATAM, or parts of Asia than it is to continue to try and compete against incumbents in major markets, Tier 1, Tier 2s, or for that matter try and compete against a Time Warner in a Tier 3.

Pacific-Tier: WBS Connect helped shake up the American Internet industry by bringing affordable bandwidth and high-performance services to people. How do you continue to disrupt Verizon and AT&T and people who would possibly like to hold back development of competitive services in the United States. How do you go about continuing to hit that “borg?”

Scott Charter: By coming to shows like this (PTC) and ITW. You continue to partner up with aggressive companies that are willing to shake up the status quo. If you are working within a fleet of speed boats, if you are not there you are probably in a super-tanker that is probably going to run aground at one point.

That’s a little too much of an analogy…

Pacific-Tier: Let’s talk about your effect on the social or the people part of this business. Do you feel that your new company (GTT) or your old company (WBS Connect), or yourself as an entrepreneur – do you feel you have a responsibility to contribute to the good of the community? Is there any inherent responsibility you have to the community?

Scott Charter: I believe we all do if we want to be good global citizens and good global businessmen. It’s in our best interest to make sure we are doing things more and more efficient.

Power (electricity) is probably a great analogy because we are all working towards a more efficient data center. It’s in our best interest to try and find a means to use off-peak power. We’re involved in something right now that I think is going to shake up data centers worldwide.

And when I talk to people about it I don’t want them to think I’m getting too…, what I really want to say is that I think I have a real opportunity to change what we’re doing in global computing with some colleagues that we’re involved with on power.

Pacific-Tier: Well we hope so, and whether it’s alternative energy using solar or wind, or whether it’s using innovative ideas like fuel cells or co-generation… All of those things are good for the environment and hopefully in the future we’ll be able to reduce our reliance on very energy-inefficient hardware.

Hopefully people like you will put in SSDs using 1% of the power draw as a spindle… But tell us, as we wind down the discussion to a close, again you’ve been a visionary ever since I’ve known you. For several years I’ve looked to you for ideas and thoughts on what’s going to happen to our industry in the future.

Shoot for the stars. Tell us something we don’t know that is going to excite us.

Scott Charter: Well let me follow up on this through energy consumption. To drive the existing grid to use it more efficiently so we don’t have to build new. If we can avoid building new coal-fired power plants in order to generate all this new data, because data centers are gobbling up more power per capita than any other sector in the world right now. I mean it’s amazing.

We’re not getting that many new aluminum smelters out there, but new data centers are coming up and just eating and eating more power.

What if? And we believe we’re on to something that will allow us to not have to go and just massively overbuild our electrical infrastructure in order to accommodate this data center growth. I can’t wait to see where we are in two years with this.

Pacific-Tier: I think it’s exciting too, as a former data center operator I saw the sins of inefficiency time and time again, and I applaud your efforts in trying to correct that problem in our industry.

Any final words for the readers?

Scott Charter: I’m excited where I am going with GTT. I’ve never been a chief marketing officer in a publicly-traded company before. Colleagues of mine have come up joked with me and said “Mr. CMO! What are you going to do?” I laugh. It’s so exciting. Coming here and just trying to drive brand.

Go meet 40 new companies out of Eastern Europe, or go meet Western Africa. Wow!

Pacific-Tier: The industry needs competent evangelists and we warmly welcome your entry into the marketing business. Thank you very much for the time!

You can download the audio/recording of Scott’s interview HERE

Scott Charter has more than 16 years of data telecommunications experience, specializing in data networking. Prior to launching WBS Connect, Scott held management positions with Qwest Communications, Rhythms Netconnections, and Echostar Communications.GTT is Global telecom and Technology http://www.gt-t.net/ 

Future Visions of Global Telecoms with Bjarni Thorvardarson and Hibernia Atlantic

Bjarni Thorvardarson is a rare telecom visionary. He thinks on a level of telecoms at an intercontinental level, rather than a national or local level. Hibernia Atlantic is his current project, and with recent news the submarine and terrestrial cable system is now in the global media distribution business, he is shaking up the telecom community. An Icelandic native, he has brought his knowledge and skills to the United States, basing Hibernia Atlantic in Summit, New Jersey.

Pacific-Tier Communications series on Entrepreneurs and Thought Leaders continues with Bjarni Thorvardarson, CEO of Hibernia Atlantic (www.hiberniaatlantic.com)

Pacific-Tier: Bjarni, what’s been happening with Hibernia Atlantic in the past few years, since I had my last opportunity to visit with you in Summit?

Bjarni Thorvardarson CEO Hibernia AtlanticBjarni Thorvardarson:
We’ve actually had a busy couple years – a very busy couple of years.

As you may recall, we started this business by buying a submarine asset that was formerly owned by 360 Networks. We’ve been busy trying to build our terrestrial network to try and connect this submarine cable to anywhere. We no longer refer to ourselves as simply a submarine cable, but rather a capacity provider in the eastern North America region and in Europe. Less than half of our business is now in trans-Atlantic capacity.

Even though that remains our core competence, and the core of our business, in terms of our business it is less than half of our revenue.

So that is part of the transformation that has happened over the past few years.

In terms of revenue, in 2005 we generated about $2 million in revenue, then $7 million, the $18 million the following year, then $28 million, and last year we generated about $38 million dollars.

And now the target for 2010, with our addition of MediaXstream, is about $75 million dollars in revenue. So, we’ve been growing about 40~50&, up to 80 or 90% a year. So you see it’s a very rapid growth. We are riding on a couple things. One is that we are operating in the biggest capacity market in the world, which is the Northeastern part of North America and Europe. And we are focused on a niche sector, which is the big bandwidth market – which is by itself growing about 40% in volume terms a year

And now, since we still have a relatively small market share, we are growing even faster than the other (traditional) markets (players). That’s how we’ve been successfully growing our revenues.

Last year, in 2009, we were confident for the first time, and we were profitable. We are very happy with the way things are going.

Pacific-Tier: That’s excellent! Can you tell me a little about yourself, and how you got into the business of both submarine and terrestrial bandwidth and capacity?

Bjarni Thorvardarson:
Sure. I’ve been in the IT and telco business for about 17 years since I finished my business studies. By education I have a degree in engineering from the University of Wisconsin (At Madison). Later on I added a science degree from the London Business School.

I went into the telecommunications business, and from there into investment banking (around 1998). Then shortly thereafter I started a fund that was investing in telecommunications and IT. That was 1999 into 2001. From there Ken Peterson actually got interested, Ken Peterson was the owner of Columbia Ventures (CVC), got into an investment in telecommunications. He brought a co-investor in with me, and bought the fund eventually. That’s how it came about that I started working for CVC.

And I’ve been investing on their behalf in telecommunications since 2002.

Now one of the investments that we had made was indeed Hibernia Atlantic. That was 2003. Then in 2004 we sold an investment that I was responsible for here in Ireland. Then I took over the responsibility of Hibernia Atlantic. Since 2005 I have been with Hibernia Atlantic, running it for CVC.

That’s how it came about that I’ve been investing and spending my time in telecommunications.

When it came that I was to take on the Hibernia Atlantic project, it was meant to be a 6 month project. We’d see what we could do, fix a couple things, and recruit the right people. It’s one of those things that a 6 month window turned into a sliding 6 month window. And during the next 6 months we ended doing something exciting. That’s what happens when you get interested in what you are doing.

You see the potentiality, you see what can be done, and you kind of stick around – and so its 5 years now. I no longer refer to it as my 6 month project, I now refer to it as my passion. It’s what I do. I’ve been commuting between Ireland and the US now for the better part of 5 years, and relocated to New Jersey where we have the Summit headquarters, or US headquarters a few years ago. So I am pretty heavily enrolled in the Hibernia project.

Pacific-Tier: That’s good. You mentioned earlier the topic of moving from telephony to broadband. Where does Hibernia and your plans fit into what I would call the “globalization of communications,” or the “flattening of the communications architecture…” How do you fit into that model?

Bjarni Thorvardarson:
Hibernia is very much a long-haul provider. We started in the long-haul wholesale capacity business, so provided the infrastructure provider to other service providers – the likes of BT and France Telecom, Cogent and the like… We did a very good business connecting the biggest consumer markets to places like New York, London, Amsterdam, Chicago, connecting those markets and enabling service providers in those markets to connect to different parts of the world.

Our business is really predicated, it is built on the globalization of business, or the globalization and international movement of information. That was the core part of our business model.

Now since then we have moved on to going up the value chain (if you like) to become the service provider to enterprises ourselves, and begin focusing on the finance vertical, which is a very demanding market. They (financial markets) are demanding and expecting low latency circuits between different trading markets and centers. That was a big first step into the enterprise world.

The next step we took was to the media sector, which we did first when we were acquainted with or partnered up with MediaXtreme, investing in MediaXstream a couple years ago. Then finally culminated in the acquisition of MediaXstream last month. So that’s our big step into the media market.

So now Hibernia’s approach to the market is threefold:

  1. We are still very much the legacy we started, which is the wholesale provider to other service providers and telcos around the world
  2. Second is the finance sector
  3. Third is the media sector

But they all are very much relying on the globalization of business and people’s general view of the world. So we have to look and depend on it.

Pacific-Tier: So in a traditional sense submarine and terrestrial long-haul networks relied on SONET or SDH technologies as the basic (communications) protocol. Is Ethernet playing a stronger role in anything Hibernia is doing now?

Bjarni Thorvardarson:
We started providing waves (2.5 or 10 Gigabit) via SDH and SONET as a product to the wholesale sector. For technical reasons including that was the technology Hibernia was built on. And also that was the product the wholesale providers relied on. They need to connect their different POPs (Point of Presence) equipment. A POP in New York, to a POP in London, that equipment relied on and called for SDH/SONET to connect the POPs.

Now as we grow into the enterprise sector, then the guys, the traders, or whoever we are doing business with – they don’t have SONET or SDH equipment. They have Ethernet equipment or equipment that calls for Ethernet protocols. So it is incumbent on us to be able to provide that without cumbersome translation from one protocol to another.

So we have since built Ethernet at the core of our protocols. Now we can offer Ethernet over SONET, which is dedicated Ether net point-to-point. And we also built, using H3C equipment, a product that we can connect customer to and point-to-point to multipoint capacity.

So moving from the SONET/SDH world to the Ethernet world, or switched Ethernet is very much what we are doing. I am right with you there that we are phasing out one world and moving to another one. Even the telco providers are increasingly moving into the Ethernet world. Especially when it comes to building out their ISP or Internet networks.

Pacific-Tier: When you see organizations like the Carrier Ethernet Neutral Exchange (www.cenx.com) and things like that popping up that are basically designing their product on the old bilateral telecommunication company design,… Do you believe that bilateral Ethernet, or that bilateral carrier relationships still have a role, or will companies like Hibernia make many of those old relationships irrelevant?

Bjarni Thorvardarson:
Hibernia, in its traditional sense, is not going to replace bilateral agreements. But bilateral agreements are going to be phased out when it comes to the exchange of Internet traffic, because exchanges are going to replace them. It is like the minutes (telephone settlement) business extremely cumbersome. If you want to build a bilateral relationship with other telecommunications providers you want to exchange traffic with through some of the voice exchanges you can do business in a matter of days.

And that is the same with the exchange of Internet traffic. If you want to do peering on a bilateral basis with companies it takes you years to build up. If you want to do it through an intermediary (such as a public internet exchange Point), clearly it is moving from the bilateral agreements to the exchanges.

Now how does that related to the price a carrier has to pay when going through the exchanges? To transit pricing? Or what have you?

And we can see where these intermediaries are actually charging less and less for the service of being in-between the delivery of the data and the content origination. You can see that in transit pricing, and how transit pricing is continuing to plummet. So I think that we are becoming less reliant on the bilateral agreement. And I firmly believe the opportunity and the necessity of getting more exchanges up and running is important.

And I think the same transition, you can see the same transition when it comes to not only Internet peering, Internet traffic is also the interconnection of Ethernet circuits, the same transition occurred that we saw 50, 60, 70 years ago when it came to voice traffic. If you wanted to make a call from London to New York you had to call an operator in London, and he made a physical cross connect to a long-distance line that terminated in New York.

The operator in New York then made the physical transition to the local tail line to the customer in New York.

That’s very much the same as when you are setting up an Ethernet circuit today. You have to build up a physical cross-connect in New York between the local tail provider and the Hibernia facility, and then in London to the tail provider over there.

With INNs and with proper Ethernet virtual cross-connects which are relying on a virtual exchange, or like exchanges that you are referring to, it’s going to revolutionize the provisioning and setup time of these Ethernet circuits. We can see a leap in that direction over the next couple years.

Pacific-Tier: One other thing I’d like to ask about Hibernia’s role in the Internet and international community in particular. I’ve been spending a lot of time in developing countries myself over the past year or so. So does Hibernia play a larger role, more than just an economic role,.. Do you also have a larger role in supporting the global community to provide a product that will bring global communications, education, entertainment, media, – can you bring that type of thing to another level?

Bjarni Thorvardarson:
I think that when you have a major company, a large company on the global economic scale, then you have to sit back an think about what your global social responsibility is to the world, and what you can contribute to the world. Hibernia is light years away from being at that size, and we can best fulfill our role now by looking for what is our economical role in this world.

Today that role is to provide large scale, high interconnectivity in all the market we operate in at a very attractive price. And by doing that we can contribute to the successful globalization commerce that will facilitate the business which will break down barriers that might prevent doing business, or from offering access to multinational companies.

That’s really what I think is our role in the world, to enable companies and people around the world be operating seamlessly as if they were sitting at two desks right next to each other (companies), and thus taking away the physical barriers of being located thousands of miles apart.

Pacific-Tier: If you look at the ideas, of say Carr’s concept of the “Big Switch” (Nicholas Carr), where telecom companies, and computing companies, and storage companies actually become nothing more than a huge, ubiquitous utility that people expect. Do you agree with that idea, or do you believe companies like Hibernia should be able to offer much higher value than the idea of a utility “big fat pipe?”

Bjarni Thorvardarson:
Well I think everyone has to know which business they are in, and that people can be in more than one business at a time. I say that from experience, because CVC (his prior venture capital company) was in the manufacturing of aluminum, and the manufacture of advanced products that were made from aluminum.

Making or smelting aluminum is very much a commodity business. The success of the business is predicated, or based on you operating a business efficiently. It’s about cost, cost, and cost. If the price per pound of aluminum that you smelt is higher than your competitors, you are out of the market. So that’s how we operated in the aluminum market.

But we also had exclusion companies. That is changing the aluminum ingot to bars that can be used by manufacturers, and be converted to door frames, and window frames, and converted into materials that could be sold to the end users or consumers.

So we were very much aware of the different needs of the value-added service market and the commodity market.

And I think the telecom business is very much the same. You have to know whether you are in the commodity market, the utility market, and there is a fair amount of utility market in the telecommunications world. I think the core of what Hibernia does is just that. It is a utility capacity between the POPs. It is providing 10G (Gigabit) capacity between London and New York, or London and Amsterdam, connecting all these high capacity markets, and it is a utility market.

You have to be very efficient in terms of how you operate your market.

Then, when you go up to the media market, or to the finance market, it is no longer a commodity market. The trader that is trading between London and New York, he does care about the price he is paying, but even more concerned with no having a second-rate service.

So you have to know which market you are operating in, and telecommunications will remain within the two markets.

Now Nicholas Carr’s concept or theory of the “Big Switch” where the world is going to cloud computing as a utility, where you plug into a socket in the wall and you are connected to a network of computing power is a noble one, and a very interesting one, and I think it certainly is going in that direction, but the difference between the bits and bytes, and the electrons that flow on the wires of the utility companies or the electric companies – it is bits and bytes of sensitive information that you do not want leaving the company or be flowing on the wires outside of the company.

So there are many challenges the “Big Switch” theory or concept. But there are a number of companies that are building up a very successful business model. Amazon being one, and a number of other companies offering cloud computing and growing extremely fast.

I am fascinated by the concept and the model of business, but I don’t think there is quite the pure cut between computing and the traditional utilities.

Pacific-Tier: Any other vision or looks into the future Hibernia may be able to share as you peer into the next 3 to 5 years?

Bjarni Thorvardarson:
I wish I could pretend to have a crystal ball, and say what our visions are, but our vision, really for the near to mid-term future is to continue our growth into the different enterprise verticals. We need to continue to service the market we comfortably define as our core markets, being North America and Europe. That’s where we will continue to focus our attention.

But we will to some extent continue to introduce new products that will leverage our network, and continue focusing on different verticals that we can also continue leveraging the network. The game for Hibernia over the next couple years is leveraging the asset. Those assets are not only our network, but also the experience of our company (employees) – the people we have, the processes, and the systems we have. Our competence and the network – that is what Hibernia is going to be not only for the next few years, but beyond.

Pacific-Tier: Do you see any potential partnerships or expansion across other parts of North America or into Asia at some time in the future?

Bjarni Thorvardarson:
Without any doubt, I am sure we will find partnerships that will benefit both parties, but it is nothing I can speak about or speculate about right now.

Pacific-Tier: Fair enough! Any final words on Hibernia, yourself personally, or what you see as interesting things happening in the market?

Bjarni Thorvardarson:
Not really, I am just enjoying working in this space, and I’m looking at a number of exciting opportunities. M&A opportunities, growth opportunities, and I am just excited to be here.

Pacific-Tier: As we all are, and thank you very much for your thoughts – it has been a great discussion.

Bjarni Thorvardarson:
Thank you! It is my pleasure!

Mr. Bjarni Thorvardarson is the CEO of Hibernia Atlantic since January 2005. Mr. Thorvardarson joined CVC, Hibernia’s parent company, in 2002 from ISB bank where he launched and managed the listed Talenta-Technology fund which focused on emerging communication and IT opportunities. Prior work experience includes investment banking at FBA bank, management of an MIS department and European Sales Director of an IT company. Mr. Thorvardarson holds an M.Sc. degree in Engineering from UW-Madison, an MBA from ISG in Paris and an M.Sc. in Finance from London Business School. Mr. Thorvardarson serves on the board of One Communications, Magnet Networks.

Read the Pacific-Tier series on Entrepreneurs and Innovators

Life is Not Fair, But We Must Be Fair

Normally I will not watch Fox News, and even if I somehow stumble upon Fox News I A great American, Jon Huntsmanwould rather watch the Cartoon Channel before listening to Glen Beck or Sean Hannity. But here I was, a Saturday night hitting the treadmill at the Burbank YMCA, and the TV lineup offered a college bowl game with two teams I had never heard of, the food channel, the house hunting channel, reruns of MSNBC’s Lockup, and a rerun of the world’s dirtiest jobs on Discovery. And Glen Beck.

His guest was Jon Huntsman, Sr. (Click here for a link to the interview)

Jon Huntsman, Sr., is the guy who discovered plastic containers, and developed the idea of using plastics and foam to protect everything from eggs, to Big Macs. And he is now the 47th richest man in the world.

“Life is not fair, but we must be fair”

For Huntsman it is all about your moral compass. You know what is right, and your moral compass will help you keep in the right direction. There is no excuse for a man (or woman) to do what is wrong – no excuse. It does not make any difference if somebody else is taking public responsibility for your actions – it is you pulling the trigger on your action. Don’t blame your actions on the shareholders, board of directors, or anybody else. If the moral or ethical direction of the company is wrong, work, invest, or participate in another activity.

Huntsman is an inspiration. The hour I spent with him on that treadmill in Burbank will echo with me for a long time into the future. The one guy in the entire Nixon administration who told the chief of staff he would not do anything unethical or illegal, and walked away from the problem. The one guy not indicted in the Nixon administration, because he was beyond reproach.

This is a guy who grew up in a remote part of Idaho (Blackfoot) in poverty. Clean living and hard work eventually brought him to the University of Pennsylvania, and the rest is history.

Life is Not Fair

There are simply people out there in the social Ether who are motivated by taking things away from others for their own benefit. They have no lingering issue hurting others, ruining their businesses and lives, or performing unethical or immoral activities by displacing their personal responsibilities on to their management or shareholders. Life is not fair.

But Huntsman strongly urges us to be fair in our business, interpersonal, and moral lives. We must be better than others who do not follow their moral compass.

“With integrity, nothing else counts. Without integrity, nothing else counts.” (Sir Winston Churchill)

Huntsman frequently quotes Sir Winston Churchill in his interview with Glen Beck. Integrity is all a man has to follow him through life. Regardless of your intelligence, your creativity, your dedication – without personal integrity your reputation will have a stain which will follow forever.

What it Means to You and I

We all have an inherent loyalty to our families, religious convictions, nation, schools, and companies. We will do anything to defend those institutions and people who demand our loyalty. Even if it means breaching the threshold of ethics, morals, and personal integrity. But it doesn’t have to be that way.

During my nearly 30 professional military and civilian years living in Japan, China, and Mongolia, I was frequently advised that to successfully do business or build relationships in any of those countries, I’d have to develop a high tolerance for drinking, smoking, and in some cases participating in activities that would stretch the limits of marital fidelity. I don’t smoke, drink alcohol, nor have I ever cheated on a wife or “significant other.” So how could I possibly do business in those countries?

Reality is, once the trading community or professional community became familiar with me, and learned I did not drink, smoke, or play around, they simply never pushed the point. My company had a great reputation, offered a great product, with outstanding service, and a commitment to our customers and industry. We made a lot of money in Asia – that was with Sprint International in the 1990s.The guys I worked with who liked to drink would go out for drinks – but the deals were done at the negotiating table. The market knew our company had integrity, and our employees gladly followed the company’s culture.

In the past few years I have been exposed to the lowest form of private equity life. People who haphazardly buy and sell paper, make promises, destroy companies (along with the careers and lives of those who worked in those companies), and hire high performance lawyers who are paid to find ways to exploit the “loopholes” of contracts in favor of the private equity companies. Huntsman also finds those people in contempt – those who make a living helping companies dishonor the agreements, handshakes, and contracts they sign.

Huntsman gave an example of how important a man’s word is to his own image, as well as the company’s image in his story of a company he sold at a price agreed to prior to an economic windfall that brought the valuation up to a much higher level. He agreed to sell his company for $54 million, although he company eventually reached a valuation of five times that amount prior to closing the deal.

Huntsman honored his agreed price, even at the urging of lawyers, shareholders, and other who advised him to get much more out of the deal. He refused – he had shaken hands and given his word. That was worth more than money. How many of us have the courage to honor our commitments at that level? Is money so important that our word, handshake, or agreement can be made void for a few dollars – at the expense of our integrity and reputation?

Huntsman’s final lesson was to treat people with respect. Nothing special, just treat people with respect.

And those principles, which are applauded in books, articles, interviews, and about 200,000 Google hits, appear to not only be real, but have also been part of his rise to one of the richest men in the world.

And by the way, he is also on the global list of most generous philanthropists. From donating to cancer research to building libraries, it is his intent to leave the world with nothing, giving back to the world who gave to him.

An inspiration. I am giving thanks this evening to men like Jon Huntsman who renew our faith in the idea of creating business and wealth through hard work, integrity, and honesty. This attitude will get us out of the current economic disaster, and motivate entrepreneurs to get the job done – and get it done right.

And thank you Glen Beck for brining Mr. Huntsman to us for a wonderful hour

John Savageau, Honolulu

Trouble at the Telecom and Communicator’s Bar

Have you heard the news? Unemployment is skyrocketing, companies are closing, there’s no investment money for startups, and the sky is falling, the sky is falling? Don’t I know, as the layoff frenzy hit my own Hanging out at the communicator's barhome, that it is a scary economic place to take a swim… Sharks, really hungry sharks, circling with an eye to take every last cent you have been able to hide.

And the outlook remains bleak. The New York Times reports that Europe is suffering in youth unemployment – even more than the US. 42.9% unemployment is Spain, 28% unemployment in Ireland, an EU average of 20.7% Makes California look like the “promised land.”

And, California may actually be the “promised land.” California still attracts the best of global engineering to the Silicon Valley, and the most creative minds in communications and entertainment to Los Angeles. Whether you are a European, Chinese, Indian, or even Canadian, Silicon Valley and LA offer an environment that is unsurpassed around the world. Our universities embrace people from other cultures and countries, and our ability to support entrepreneurs draws not only students, but the best engineers and thought leaders from around the world.

Back at the Communicator’s Bar

There are still tables with discussions reviewing the indignities of being laid off by struggling companies. There are still discussions with the whine of people talking about the “damn foreigners” who are here stealing our jobs. Still “barflys” slopped over the bar worrying about their Audi payments and how their ARM mortgage has put them under water.

Then there are other bars with tables full of Americans, And A scatter shot of foreigners talking about fun stuff. Fun stuff like cloud computing, virtualization, globalization, distributing computing, “the network is the computer,” “the computer is the network,” and how the carriers will return to their roots of providing high quality “big, fat, dumb” telecom pipes. The talk is of how we can finally start putting all this intellectual property that we’ve spent billions n producing Powerpoint slides into reality.

Green is here

Virtualization is here

Data Center outsourcing is here

2010 is a blank whiteboard set up to codify the thought leadership and technology spawned in the waning years of the 200x decade and put it into business plans and CAPEX budgets.

2010 is the year we aggressively deliver Internet-enabled technology to every man, woman, and child in the world who has a desire to live a life beyond killing their own food for dinner. Here is a funny though – if a radical 8 year old in one currently scary country is able to Yahoo chat or Facebook their way into discussions and relationships with kids in California and Beijing, doesn’t it make just a little sense the desire to blow each other up would be diluted, even just a little?

If the guy living next to me is producing a telecom switch that is head and shoulders above what is currently on the market, do I really care if his brain was conceived in Hanoi?

2010 is also the beginning of a true period of globalization. That doesn’t mean out hillbilly friends in Duluth, Minnesota have to quit drinking 3.2 beer and hanging out at setup bars watching Vikings reruns, it means that the hillbilly’s kid can participate in a lecture series online from Stanford or MIT. The kid might eventually invent a pickup truck that runs on pine cones, and a 3.2 beer that is actually palatable.

Embrace 2010

If not for the simple fact you have no other choice, consider all the great ideas being pumped out by companies like 3tera, the Google borg, Microsoft, VM Ware, and all the other companies with tremendous innovative ideas. Never before in our history have some many new intellectual and business tools been put on the shelf at the same time. Never before have we had such good reason to consider implanting those ideas (yes, I am a tree hugger and do believe in global warming).

So, even if you are currently living in a car under a bridge near you former upscale Orange County community – shave, wash your car, take a shower at the beach, and let’s get our depression, anger, tacit knowledge back into the business saddle. The young guys still need our experience to get their feet on the ground, and we need them to ensure we will have social security in the future.

Welcome 2010 – you have taken a long time to arrive

John Savageau, Honolulu

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