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IO splits in two, solving an identity crisis

James Niccolai | Dec. 3, 2014
IO Data Centers is splitting into two companies as a way to attract investors and resolve a conflict that may have been holding back its business.

As for the IPO, Slessman said he's simply not interested in it. "The process is very hard for dynamic, younger companies to be successful in," he said. "It's much easier for companies with billions in revenue and a visible revenue stream." He also pointed to strict regulations that public companies have to comply with.

The company now has no plans to go public and probably will remain private for at least two years, he said.

Being private means IO doesn't publish its financial results, but Slessman said the collocation business has been growing more than 50 percent a year since 2007 and has more than 700 customers. That makes it the second-largest private colo provider after Global Switch, he says — though Global Switch is significantly bigger.

The market for DCIM software is also growing, though not as quickly as some expected. The software can keep track of all the hardware assets in a data center and monitor energy use to help reduce costs. But some companies have found setting up the software to be too complicated, said IDC analyst Jennifer Koppy.

IO isn't one of the more established players in the DCIM market, but there's still room for smaller innovators, she said. And BaseLayer will be able to sell its DCIM software along with the hardware modules it manages, which will give it a boost, Koppy said.

IO has already been operating as two companies, and the split will be complete from a legal perspective early next year, Slessman said. He'll continue to run IO, while Bill Slessman, his brother, who was IO's CTO and is one of its founders, will be CEO of BaseLayer.

 

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