Q9 targets financial institutions in Canada
March, 2002
By Albert Leonardo
Hosting customers should check that their equipment is safe and secure
in caged areas such as this at Q9 Networks.
It may not be a soup to nuts type of organization, but Q9 Networks Inc. is certainly building its reputation as a platform and infrastructure outsourcing provider to the financial services industry in Canada.
With current clients that include CertaPay Inc., Basis 100 Inc., Northern Financial Corp., the Canadian Securities Institute and TD securities Inc., the company estimates that nearly one-third of its clients operate within the financial sector. And there appears to be some specific reasons why Q9 is attracting a niche market.
"If you're looking as to why they're choosing us, we've had success because it's clearly the location," said Osama Arafat, CEO at Q9 Networks Inc. in Toronto. "We 're in the financial district (in Toronto) and that enables us to very easily interconnect between their equipment over here and the LAN."
He added that they are connected to the backbone of nearly all of the major ISP providers in Canada and have fibre connectivity between themselves and the bulk of the financial institutions. Also, the multi levels of security provided in their facility in the forms of biometrics, around the clock uptime monitoring and internal physical security were also why they have gained the business of one of Canada 's leading industries.
Arafat added that the financial industry will continue to outsource portions of its operations because from his viewpoint, it is not what the financial companies' core strength is in. It is traditionally on the application side that such companies have found profitability. He said that its financial clients have only continued to increase their levels of business with Q9, and the trend to outsource would continue over the next year.
The company recently purchased the sole Canadian outsourcing facility of one of its former competitors in Exodus Communications. Q9 acquired the Brampton, Ont., 160,000 square foot data centre along with all existing infrastructure technology. Arafat said the timing of the deal couldn't have come at a more opportune time, as its current 20,000 square foot space location was nearing its capacity. "We have to do some modifications to integrate it with our networks. We hope to have it up and operational with new clients in a couple of weeks," he said. Last December, U.K.-based Cable &Wireless PLC announced it had purchased 26 of Exodus' 44 data centres, but left the Canadian location off its list, saying this country wasn't part of its focus.
Not so for Q9, who is currently building a data centre in Calgary that is expected to open later this summer, and later expansion plans may include Montreal and Ottawa. Interestingly, Arafat said the demise of Exodus would have little implications on the overall market, except that the outsourcing sector was now minus a once formidable player.
One industry analyst was impressed with Q9 's recent purchase and said that it solidifies the company 's goals. "It puts them in a pretty good position right away in that they have a data centre that's already up and running, "said Mark Quigley, research director for the Yankee Group in Canada in Ottawa. He said this was a good deal for the company, especially considering they by-passed the real estate and construction woes, and instead inherited an existing building. And while Arafat said there was no animosity between the former rivals, Quigley disagreed.
"There probably was some professional animosity there. If you look at the two companies and compare and contrast them, Exodus was this massive global layer at one point in time and Q9, that was much more focused and smaller and didn't have the access to the same kind of capital," he said.
Reprinted with permission from IT Focus on Financial Services by IT World Canada - March, 2002.
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