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DataCentred goes into administration after £1.8m losses

Administrators appointed after datacentre and cloud operator recorded losses of almost £1.8m in the last financial year

Datacentre and cloud operator DataCentred has gone into administration, and FRP Advisory has been appointed as administrator to find potential buyers.

The Manchester firm provides software and cloud-based services and has secured a number of high-profile clients in recent years, including a deal with the National Holocaust Centre and Museum, which is using the company’s public cloud platform to store archived Second World War interviews. Also, HM Revenue and Customs built a multi-channel digital tax platform with help from DataCentred using the open source infrastructure-as-a-service platform OpenStack.  

In October 2016, DataCentred received a £1m investment from Barclays, the Greater Manchester Authority and others. Its annual revenue increased significantly from £171,000 in 2015 to nearly £1.2m in 2016, but it recorded losses of almost £1.8m in the last financial year.

FRP is seeking buyers for the company and its assets. This process will ensure DataCentred can still trade while it makes the necessary internal changes and maintains its entire staff, according to a statement from the company.

Anthony Collier, a partner at FRP Advisory, said: “Over its four-year trading history, DataCentred has earned a well-deserved reputation for its expertise and has supported a significant network of clients. We are marketing the business and assets for sale and we encourage any interested parties to make early contact.”

Computer Weekly requested further information on how the administration will affect DataCentred’s customer base and client deals, but FRP declined to comment.  

Steve Wallage, managing director at datacentre analyst BroadGroup, said the competitive nature of the Manchester area may have contributed to DataCentred’s demise. “What we’ve seen is a lot of local companies in that marketplace,” he said. “A lot of IT shops set up there have got a good presence, including some guys with some good funding, like UKFast and TeleData. Equinix has got a good presence through its Telecity acquisition. You’ve also got a number of other guys with a strong presence – Iomart, Rackspace, and so on. It’s a pretty competitive market in the region.”

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Wallage said the transition from being a co-location company to offering cloud services can be a difficult step. “DataCentred started off as a more co-location type house and it tried to get more into the cloud service, particularly supporting OpenStack,” he said. “It’s a very big jump to get into cloud services. Having that capability and skillset is very different from running co-location, so I think that’s definitely been a challenge.”

Wallage also emphasised the importance for a smaller cloud provider to offer extra value when competing against cloud giants such as Amazon Web Services (AWS) and Microsoft Azure. “What you’re looking for in order for a company to succeed is that it has got a particular edge, whether that is a technology edge or being able to add some particular value on top of someone like AWS,” he said.

“It’s whether they perhaps have particular local markets, skills and relationships, contacts and sales channels; whether they have a particular vertical market skillset. They’ve got to have something that really brings them apart from some of the public cloud and bigger players and also allows them to charge higher pricing.”

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