Alberta’s fast-growing e-business market is getting another boost from Group Telecom, which last week tripled its server capacity at its downtown Calgary location to meet what it calls huge customer demand for web hosting and other data services.
Michael Kurtz, vice-president of Western Region for the Vancouver-based telecommunications firm, says the co-location facility in the Calgary Tower building can now accommodate up to 270 small and medium-sized companies.
“We built this space and thought it would last us two or three years. But we sold out in about eight months. And now we’ve tripled our space,” says Kurtz.
“The market for us is just exploding. Two years ago, we were a $2.7-million company. Last year, we were a $73-million company. And when we report our results in a couple of weeks from now, they’ll be in the order of $200 million. We’ve had tremendous growth.”
Group Telecom is beefing up its presence on the turf of its two biggest competitors, IBM and TELUS, both which opened their own web-hosting facilities in Calgary this past year and are vying for business customers in voice, wireless, high-speed data and Internet services.
Last month, IBM opened a $7.5-million e-business hosting centre in downtown Calgary, the global corporation’s first foray into Western Canada to capture a share of the booming applications services provider (ASP) market.
TELUS launched its own $22-million Internet Data Centre on 10th Avenue S.W. in July, announcing that it plans to become the “ultimate” web-hoster in Canada.
But Kurtz says Group Telecom isn’t worried by the competition. According to a study by IDC Canada Inc., the web-hosting services market alone is worth $336 million in Canada this year, and is expected to grow by nearly 20 per cent a year through 2005.
“The market is indeed very competitive and TELUS is a formidable competitor,” notes Kurtz.
“(But) we’re not trying to be everything to everybody. We’re very focused on the small and medium-sized enterprise, and a lot of our competitors are focused on much broader markets than that.”
Shaw Communications is a major shareholder of Group Telecom, which purchased Shaw’s FiberLink business for $760 million last year as it moved to become a national provider of high-speed telecom services.
Group Telecom has spent an estimated $35 million in growing its infrastructure in Calgary, including the 7,300-sq.-ft. “server hotel space” which features redundant power and fire suppression systems, backup generators and multiple levels of security. There are about 60 clients, mostly local companies, currently using the facility for web, email, ASP and server hosting.
“I know there’s a lot more space coming on stream, but based on the consumption rate we’re seeing now, we’ll be expanding again in about a year’s time,” says Kurtz. “We’ve probably sold a third of the space we just finished completing. We don’t see a let-up in the demand at all.”
Group Telecom, which operates 14 other co-location facilities across Canada, employs 155 full-time workers in Calgary.
