Ray the Hoster

DrPeering -

In this economy, we are all nervous about spending money. Our exec team is stuck like a deer in headlights, requiring assurances that we never needed in the past. Do you have any advice about investing in infrastructure in this economy?  I just don’t see our exec team moving on anything.

Wallace

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Wallace -

We were speaking of data centers at a VC dinner just last week and I got to tell my favorite data center story - the Ray the Hoster story.

In 2001 the economy collapsed.  Ray had been waiting in the wings.  Rather than fretting, he seized the opportunity to buy a recently moth-balled data center for literally pennies on the dollar.  The GenSets were still shrink wrapped, servers were half unboxed and still there.  Qwest had lit the building before the building was shut down.

Ray was network savvy enough to identify which networking HW he could get also for pennies on the dollar on Ebay to get the building connected and to start his hosting company.  He found the right combination of gear to get things going, and contacted Qwest at the end of their quarter to negotiate a great deal on BW.  He was the only one I have ever heard of being able to buy an OC-48 *leased line* and pay for how much he used it, simply telling Qwest how much he was going to pay each month based on his own measurements of his usage! What a dealer.

He sold the company after a couple years of filling the data center with paying customers in the upcoming economy recovery restart. He sold the hosting company for something like $40M.

I serve on a few boards and found that this story helps put things into perspective, especially for those who worry about the economy and making optimistic investments during downturns like this one.

Ray is my favorite example of being network savvy, opportunistic, and smart (frugal).

Dr Peering 

DrPeering [at] DrPeering [dot] net


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