Monday, 11 February 2013
2e2 Collapse Shows Data Centre Industry not Invincible
It goes without saying that not all data centre news coming out of Europe is good news. Such was the case when reports of the demise of IT services company 2e2 became public last week. The Newbury-based company had been trying to solve their financial problems for some time but were unable to do so.
2e2 had been for sale but potential buyers were put off amid ongoing concerns about their finances. With no buyer to be found and debt continuing to pile up, the company closed its doors and laid off more than 625 workers. Despite its best efforts, administrators FTI Consulting were not able to convince potential buyers that 2e2 was a viable enterprise going into the future.
Even more disconcerting were the desperate efforts of 2e2 to remain operational in their final hours by threatening customers. Some reports suggest the company asked for upwards of £40,000 each from their largest customers to keep the doors open. Smaller clients were asked to fork out a reported sum of £4,000. If the entire situation were not so unfortunate, it might even be a bit humorous.
As 2e2 operations wind down, their customers will be scrambling to find replacements for their hosting, collocation, managed services, and so on. 2e2's demise will be other companies’ gain but, in the end, the inconvenience and hassle suffered by customers suggests there will be very few winners in the short term.
DATACENTRE.ME are recommending that affected consumers check with broad-based information services like theirs for advice in finding a replacement IT services company. Companies like DATACENTRE.ME have access to the latest news and industry updates that can point IT personnel in the right direction.
The demise of 2e2 should be a wake-up call to every business operating in the data centre, unified comms, and managed services sectors. Despite the fact that the technology industry continues to roll along, businesses in these sectors are still at risk if they are improperly funded or poorly managed. Only time will tell what brought 2e2 to its knees, but if one can fall then others can follow.
In order to remain a viable business, data centres and IT companies must remain at the forefront of the industry in terms of technology, quality of service, and marketing. However, they must also keep pace with both infrastructure and software. In many cases that requires good relationships with investors able to keep the money flowing.
Those of us in the industry need to remember that no sector is invincible. One need only look at other technology driven industries including desktop PCs, digital photography, and business imaging to see how volatile the environment can be. Businesses not properly positioned for future evolution can find themselves in a world of hurt very quickly. As long as we keep our eyes open to reality, and keep our heads about us, we should be just fine.