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FINANCIAL TIMES
Profile: Next Generation Data
29th September 2010
A mothballed semiconductor factory that was seen as the UK’s worst industrial white elephant has finally gained a function thanks to data “warehousing” business Next Generation Data.
The 75,000 square metre high-specification building was built on the outskirts of Newport in the late 1990s as part of a proposed £1.7bn ($2.7bn) development by Korean electronics group LG that was supposed to employ more than 6,000 people. However silicon chip prices tumbled and the factory never entered service. An adjacent LG cathode ray television manufacturing facility then closed down as consumer demand shifted to flat screen TVs manufactured in Asia and eastern Europe.
Technology start-up Next Generation Data is breathing new life into the former silicon chip factory at Celtic Lakes by marketing it as a data centre where communications businesses can house the proliferating banks of servers needed to run increasingly memory-hungry computer services.
The building is a perfect place for a data centre, according to Next Generation, which has signed a 25-year lease with the building’s owner, the Welsh Assembly Government, an elected body. It has a large earthquake-proof floorplate that could house up to 19,000 racks of 10 or more servers each.
The UK’s national electricity grid was diverted to place a sub-station close to the facility, guaranteeing 150 megawatts of power. A series of ducts around the base of the building give access to optical fibre networks. In addition, the centre is located on a rise in the land safe from flooding and is protected by security staff drawn from special forces, a row of huge boulders and military-grade fencing.
“We started talking to the Welsh Assembly Government about this towards the end of 2006 after legal hassles had been sorted out,” says Nick Razey, co-founder of Next Generation, referring to repayment of job creation grants that Wales obtained from LG. “It was clear that while the facility had been a great embarrassment, it was also a great asset.”
Mr Razey, who is chief executive of the business, says it is positioning Newport “as a back-up to London”. The bulk of the UK’s data warehousing is currently undertaken in the capital, but prices are relatively high. The Newport facility opened in January of this year and already hosts two large customers, including UK telecommunications giant BT, with contracts worth £10m in total over several years.
Expansion could be helped by the trend towards cloud computing, in which businesses and individuals rent remote memory from external contractors in order to benefit from greater flexibility and economies of scale. Mr Razey says: “Cloud computing is beginning to live up to expectations as there is a lot more interest in taking services and putting them into the cloud.” Next Generation is already readying the launch of a cloud service for one customer.
The data centre will never employ the thousands that might once have worked at the site had industrial history followed a different course and semiconductor manufacturing have commenced. At full occupancy it is likely to have a staff of around 100.
However the place has a more upbeat air now that it has been pressed into service to support the latest wave of growth in information technology. With high-tech defence business EADS operating nearby and venture capital company Wesley Clover headquartered at the Celtic Manor Hotel, Newport is better represented in new technology than the withdrawal of LG might once have suggested.
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