IXcellerate - Feb 2021

IXCELLERATE

DIGITAL REPORT 2021

IXcellerate: ENABLING RUSSIA’S DIGITAL REVOLUTION

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FEBRUARY 2021

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IXcellerate: ENABLING RUSSIA’S DIGITAL REVOLUTION WRITTEN BY

JOHN O’HANLON PRODUCED BY

LEWIS VAUGHAN

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IXcellerate, one of the leading Russian Tier III commercial data centre operators in Moscow, is attracting global hypercloud operators into Europe's largest internet market

W

hat are the prerequisites for a successful entrepreneur? The ability to gain the confidence of investors is up there. Before

he ventured into the Russian market in 1998, Guy Willner had already raised seed capital and sub333

sequent funding for his first data centre company IXEurope, floating it on the LSE, surviving the burst of the dotcom bubble and eventually selling to Equinix for £555m. That’s a story in itself, however by 2008, having walked away from the job of European President for Equinix, he was looking for a new challenge. Another characteristic common among entrepreneurs is drive, ambition. Willner comes over more laid back than driven – in his case the driver is creativity. Both his parents were artists, and though their four sons all chose engineering, he says that in his case the creative gene has been a major asset, giving him the imagination to think differently and not to be daunted by entering uncharted territory.

The founding of IXcellerate certainly required these qualities. Already on the board of a number FEBRUARY 2021

2011

Year founded

100

Number of employees

334

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“ PEOPLE DON’T REALISE THIS IS A COUNTRY TWICE THE SIZE OF THE USA OR CHINA, WITH HUGE DIVERSITY, DOZENS OF NATIONALITIES, ETHNICITIES AND CULTURES” 01

— Guy Willner, CEO, IXcellerate

of companies including Teraco in South Africa, he was approached by the European Bank to chair a Russian data centre company. Thanks to the GFC that funding fell through but the opportunities presented by Russia, clearly an underserved market, had taken his interest. He teamed up with Clifford Gauntlett – a Russian speaker with 25 years’ experience working with tech companies there – to found IXcellerate and raise the capital required to build out some serious data centre capacity in Moscow. It wasn’t easy to find the right location, and they looked at at least 100 sites; however they now have a prime position inside Moscow’s equivalent of London’s M25 and were able to secure first-rate partners such as Arup and Mercury Engineering to execute the project.

There were many reasons why Moscow remained an underinvested market despite Russia’s evident global importance. Foremost among these was a perception among western players that the country is a country with alien customs, philosophy and unreliable business practices. “People

FEBRUARY 2021

E X E C U T I V E P R O FILE :

Guy Willner Title: CEO

Company: Information Technology & Services

Guy Willner, co-founder and CEO of IXcellerate, is one of the leading international experts in the field of building and operating data centers.

He is regularly named among top-50 most influential people in the data center, cloud computing and big data industry within EMEA ( Europe, Middle East and Africa).

Guy has been holding senior positions in high-tech and big data companies for over 20 years. In 1998, he founded IXEurope, starting with the construction of a data center in the suburbs of London and after nine years running a network of 14 data centers in Western Europe. In 2007, IX Europe was acquired for $ 555 million by Equinix, the undisputed market leader in data centers around the world.

After gaining industry experience Guy started to explore Emerging Markets and created IXcellerate. Known for his charisma, “out of the box” thinking and deep understanding of the market, Guy’s influence over the data centre market continues to grow, holding Non- Executive Board position with Lambda Helix in Greece and co-founding IXAfrica in Kenya. With IDC-G group chair Guy is frequently asked to advise newcomers and investors on market trends and data centre global development.

Guy graduated in 1986 from Oxford Brookes University with a BSc in Engineering. When time allows, he enjoys sailing and playing guitar.

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03 are frightened of Russia,” says Willner.

does not mean relinquishing control

“People are happy enough to invest in

of a customer’s IT systems, and it’s

Singapore and the Middle East where

also his job to explain to IT people

democracy is not much in evidence.

that they still retain control of their

They may say: ‘Russians look like us so

systems, which will be more effectively

why don’t they behave like us?’ They

and securely located than they ever

don’t realise this is a country twice

could be by keeping them close. But

the size of the USA or China, with

Russia is now not merely catching up

huge diversity, dozens of nationalities,

but leapfrogging in many ways, with

ethnicities and cultures.” Like many

interesting e-banking innovations, very

emerging economies, he adds, Russia

fast technological development and

has been wary of outsourcing with a

even self-driving taxis being trialled

strong inclination to keep its data in-

on its streets. All this is inexorably

house. His team has been explaining

driving a new data centre revolution,

why outsourcing makes sense, that it

Willner believes.

FEBRUARY 2021

“ EURASIA PEERING IS A THE BEATING HEART OF THE DATA CENTRE” — Guy Willner, CEO, IXcellerate

by Sumitomo Corporation, which had been investing in Russia for more than 60 years. “It was a fight as it always is

That’s now, but against this back-

in Russia,” he admits. "But that draws

ground it was quite an achievement

the best out of you, just as creative art-

to get serious backers for his project.

ists are often at their best when they

Nevertheless after talking fruitlessly to

are swimming against the tide of fash-

the European Bank for Reconstruction

ion or even perceived common sense.”

and Development (EBRD), in 2012 the

There have been setbacks, for

World Bank through its subsidiary the

example when his co-founder and

International Finance Corporation

business partner Cliff Gauntlett died

(IFC) came on board, soon followed

in 2014, of a heart attack at the age

IXcellerate Campus - 3D Overview CLICK TO WATCH

|

1:30

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“ IN NINE YEARS WE HAVE COME FROM BEING THE OUTSIDER, THE FOREIGN INCOMER, TO BEING THE NUMBER TWO DATA CENTRE PLAYER IN THE WHOLE OF THE RUSSIAN FEDERATION” — Guy Willner, CEO, IXcellerate FEBRUARY 2021

six years has been impressive.

“Goldman Sachs came in as an investor in 2017, so now we are a very big business with over $100m invested, I00 staff on our books and more than 150 customers. In nine years we have come from being the outsider, the foreign incomer, to being the number two data centre player in the whole of the Russian Federation.”

Since 2016 Guy Willner has also been CEO of Eurasia Peering IX, which enables telecom operators, cloud solution providers, system integrators, content delivery networks (CDNs), ISPs, hosting companies, social networks and the like to exchange traffic seamlessly and optimise traffic routes.

“Eurasia Peering is the beating heart of the data centre. Peering is like a market place but instead of goods you bring content to the marketplace and of just 53. “Cliff knew everyone in the

connect it to users who may be on six

business so I felt very much on my own

or seven different mobile or broad-

when he died so unexpectedly.” It was

band networks, all connected to that

providential though that at the time the

internet exchange (IX), which is basi-

company was hiring a Russian CFO,

cally a collection of networks, network

Dmitry Fokin who was able to take over

operators and content providers - so

the reins of management. The build-up

Google, Apple, Microsoft, Alibaba and

of the business over the intervening

Tencent which are all on our Eurasia busi ne ssc h ief . eu

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Peering platform and a host of content providers like Wildberries ('Russia's Amazon') are present on the Eurasia Peering platform and able to exchange information with one another.”

The first data centre, Moscow One, was housed in a 6,000 sq m warehouse, on a leased site, he explains.

“We fitted a small part of it out as a data centre, started putting customers in there, raised more equity and fitted out more till the entire warehouse was full.” Today Moscow One 07

has 1,835 rack spaces and a power capacity of 13.7 MW. Soon an adjacent site also with a warehouse on it became Moscow Two, with 1,580 rack spaces and an additional 13,5 MW power. Moscow Two was inaugurated on October 3, 2019 by HRH Prince Michael of Kent, someone who is well known in Russia as Chairman of the Russo-British Chamber of

and chatting to everyone, insisting

Commerce. “Our Russian guests

on spending more time with the junior

were dumbfounded. Prince Michael

staff than with the leadership!”

is a Romanov by descent, a fluent

The first ten percent of building a

Russian speaker who is very popu-

business in an emerging market takes

lar in Russia – he gave a speech in

five years, Willner estimates. It then

Russian and then spent over an hour

takes two years to build up the next

and a half walking round the facility

40% and maybe 18 months to achieve

FEBRUARY 2021

“WE ARE POSITIONED VERY MUCH AS THE MAJOR WESTERN PLAYER IN RUSSIA, THOUGH WE ARE INDEED A LOCAL RUSSIAN BUSINESS” — Guy Willner, CEO, IXcellerate

the remaining 50%. “We started with

USA; after that the market began to

a little data centre. Then we found we

really take off so we had to build out

were getting customers colocating

five times that capacity and complete

with us, customers such as Bloomberg,

Moscow One. Suddenly we had

Refinitiv, Orange Business Services,

some big Asian hypercloud clients

Rackspace, NTT and many other

like Tencent and Huawei asking for

e-commerce and financial services

all the capacity we could provide. Our

companies from Europe and the

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campus is now 26.5 MW. “It's like

to put another 15MW of IT load, that

expanding an airport, you try to build

equates to about 25 MW of grid power,

close to where you are: with all the

so the power capacity just on that

infrastructure already there it makes

Moscow North campus will grow from

sense to build your third runway along-

about 26 to 50 MW.�

side the others. Likewise if you have

The final push will start early in

all the networks coming in and upward

2021 with the acquisition of a site in

of 150 customers in your data centre it

the south of the city, a leap ahead

makes sense to build more capacity on

for this fast growing company. Here

that site. We have signed for another

he expects to end up with a further

parcel of land where we are going

potential of 150 MW, which should be

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sufficient for the next 5 to 10 years

reference player, with the regulatory

allowing IXcellerate to remain at an

and sanctions compliance, anti corrup-

optimum scale for the market. “We

tion verification and other security they

are positioned very much as the major

need – and they trust me too because I

western player in Russia, though we

have been in the industry since 1998!

are indeed a local Russian business so any new international customer of the nature of Booking.com, Apple or Nvidia with their new AI platforms, wishing to come into Russia will need to come to us because because we are the busi ne ssc h ief . eu

IXCELLERATE 53 DAVIES STREET W1K 5JH, LONDON ALTUFIEVSKOE SHOSSE 33G MOSCOW, 127410 T +7-495-8000-911 E INFO@IXCELLERATE.RU ixcellerate.com

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