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October 20, 2010

Can centralisation save you money? Q&A with Charles Nasser, Founder and CEO of Claranet

CBR talks to the boss of Claranet, a UK managed service provider about standing out in a crowded ISP space

By Vinod

Charles Nasser Claranet CEO

You claim to be "Europe’s largest independent managed services provider with revenues of approximately €100m" and that you have a network that now includes 16 data and network support centres operating 24/7. But I tend to think of you more as an ISP?
I understand why you think that as we did start off in that market – first as a consumer, then as a business ISP. When I started the company [Nasser’s bio says he started the firm in 1996 as a New Year’s Resolution when he as a 26 year old electronic engineering graduate looking "for an area of technology that was set to grow"] we were indeed competing with people like BT and Demon, helping people who weren’t sure how to get on to this new "World Wide Web". But from there we expanded and in fact survived the dotcom crash by diversifying into the business ISP market, offering ways to simplify IT management.

I read somewhere you struggled in the early days?
Well, I did look for institutional investment to help the business grow, when we were still a consumer facing business. But every venture capital company I approached turned me down. To survive, we started selling pre-paid Internet access packages and a year later, we were a hot dotcom. But I never sought external financing again – the company is 100% owned by friends who invested in the early days and myself.

Tell us a little about specific customer engagements please then, Charles.
We focus on the mid market, which we define as firms between 50 and 1,000 employees. We offer such clients three main services; network management, hosting and application management. Our client base of over 2,500 managed service customers includes major brands such as Airbus, Ann Summers, the FA, Vivendi and Amnesty International – we service everything from enterprises, public sector and small and medium-sized businesses. At the smaller end we tend to be the prime supplier but obviously that’s not true at the higher end.

With respect – there are a lot of business ISPs out there. What makes you different?
We say we provide clients with a service level agreement that guarantees an overall business outcome such as constant Web application availability, say, rather than the performance of specific bits and pieces of a service, which is the industry norm. Our focus is to give organisations the freedom to focus on their core business by managing the mundane but important parts of their IT faster, easier and better than they – or anyone else – can.

[Looks sceptical]: Like our readers have never heard that sort of thing before.
Well, maybe an example would help. Take Five TV [the commercial broadcaster behind Channel 5]. They had a situation where they had multiple suppliers, multiple hosting providers and we’ve helped them move to a situation where that complexity has been taken away, they can concentrate on their content and we work on creating the technical response to the business needs. Not only has that saved them £100,000 in the first year of the contract, we are now positioned as their primary technical partner.

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If I’m a mid-market company that isn’t a broadcaster, could you still help me, though?
If you are spending at least £50,000 on networking a year, £50,000 on hosting and though applications are harder to quantify say £25,000-£30,000 a year, most definitely. Centralisation will save you money. It really is that simple. The point is that his class of organizations aren’t interested in your technical design characteristics; they want to know what they will get for what they will spend. They want to focus on what applications to integrate to meet their business needs, not if it’s virtualised or in a Cloud, though I’d say that’s just as true for larger enterprises as well.

Do you think that is more true or less true in a recession?
What we saw when things went bad in 2008 was six months when literally nothing happened – the whole market was like a rabbit in the headlights. But then we moved back to business as usual and in fact countries where you might not have expected any activity, we did surprisingly well in; our financial year ends in June and Spain and Portugal last year gave us our best results ever.

Are these projects efficiency drives or growth initiatives?
I think the balance swings between the two poles. So you end up with 50% efficiency and 50% innovation in business today – only sometimes the split is 60-40 and other times 40-60.

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