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Telecity’s founder gets back in the data centre game

But what has he learned from the dotcom bubble burst?

By Duncan Macrae

The founder of Telecity, a European carrier-neutral datacentre and colocation centre provider, has been backed financially to return to the data centre market.

Kelly, a senior programmer at University of Manchester, founded Telecity in 1998 with financial backing from 3i. He had planned to create a pan-European network of data centres to host and route Internet traffic.

Having built it up to a £1bn firm at the height of the dotcom bubble but, five years after floating on the main market, the subsequent crash and reduced interest in outsourced data centre services led to Telecity going private in 2005 valued at £58m. Kelly left the firm shortly before it returned to the stock market two years later. It is currently valued at about £1.4bn.

Now the market has recovered, Kelly’s new company, DataCentred, has secured £4m from a group of investors, including venture capitalist Jon Moulton’s family office Perscitus Advisers, the Greater Manchester Investment Fund and the North West Fund for Venture Capital. A further funding of "tens of millions" has also been secured and will be formally announced in June, according to the company.

Moulton told the Financial Times: "We always look to invest in an opportunity in which we see high market growth, management commitment and management capability. We believe that DataCentred is one of these happy combinations."

Kelly’s first data centre in almost a decade will be based in Manchester’s MediaCityUK, with plans in place to open a further seven data centres throughout Europe.

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DataCentred plans to offer colocation services and provide a cloud-computing platform for businesses that need data processing and content access.

Kelly, who estimates that four in five UK businesses still manage their computing in-house, believes heavy data applications, data analytics and video-on-demand are currently driving forces behind a growth in demand for storage capabilities.
Construction of the eight data centres is expected to cost £240m.

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