Capital’s best-kept secret: Super-fast pipes powering a data revolution
From: London Evening Standard
In the early days of the internet, it was quaintly called the information superhighway — the thousands of miles of super-fast cabling that allows electronic data to speed around the world.
Now, as I stand near Old Street Roundabout, staring into an open manhole at a row of ultra-thin, coloured cables belonging to Colt Telecom, the wonder is that the 21st Century information superhighway looks so small and flimsy.
The electromagnetic glass cables are as thin as fishing lines yet each one can carry 16 Gbps per second of data, close to 1000 times the average home broadband connection. There are dozens of these cables in tidy bundles in this one manhole because many of Colt’s corporate clients such as banks and hedge funds each demand their own dedicated line to carry their data.
“If they are going to be able to execute a trade in micro-seconds faster, they are going to make more money than their competitors — there’s a direct link to the P&L [the profit and loss],” explains Andy Young, Colt’s sales specialist for financial services.
Around the capital, Colt, which originally stood for City Of London Telecommuications but is now an international business, has thousands of such manholes, each housing similar lines — all hidden from public view.
“The physical cables under the ground are very unglamorous,” admits Young. “But these cables power the biggest financial hub in Europe.”
Data is a growing business. New areas such as algorithmic trading, which depends on lighting-quick connections, didn’t exist 20 years ago. Meanwhile, tougher regulation means all firms must store more data than ever.
Colt saw revenues from data centre services surge 11% in the first six months of this year at a time when income from voice calls is tumbling. Telecity, another FTSE 250 company, which focuses exclusively on data centres, reported a 16% leap in its half-year turnover.
The data economy matters because we depend so much on digital connectivity and storage — particularly in London whose prosperity rests in large part on being a connected, global super-capital. For example, the New York Stock Exchange bases much of its European trading infrastructure in a data centre in Basildon. It takes less than 4.3 milliseconds for data to go from Basildon to Frankfurt on Colt’s network.
In a sign of government support, London deputy mayor Kit Malthouse was in the City today to open the Volta Data Centre, billed as the first new central London data centre in a decade. The site, which has been developed by property firms Apollo and Glebe, is close to Old Street and is aimed not only at financial services but also the nearby Shoreditch technology scene — dubbed Silicon Roundabout.
“The location will attract the kind of businesses that have a specific need to be in the City of London,” says Volta commercial director Julian King, who says there is growing demand for companies to outsource data storage at a convenient nearby spot.
However, there is also a trend for clients to store data outside central London — often at multiple locations around the M25 and beyond. Cost is a factor but so is security and “disaster recovery” when a crisis strikes. Hurricane Sandy, which shut down power not only on Wall Street but also much of the East Coast last year, has forced firms to think about protecting data across continents.
“London is really fortunate,” declares Chris Smedley, chief executive of Geo-UK, which operates a private fibre-optic cable network in sewers for clients such as ITV and Thomson Reuters. “As well as arguably being Europe’s capital city, London is also Europe’s connectivity hub,” he says, explaining how dozens of sub-sea cables with America and elsewhere come into the UK.
Smedley says demand is “going in only one direction” as the rise of super-fast 4G mobile phones means we expect to send as well as receive more data.
So forget Silicon Roundabout’s hip internet scene. The real digital revolution is in the pipes underground.