Disaster recovery fuels Toronto telco market

Fuelled by disaster recovery plans and financial regulations such as Sarbanes-Oxley, data storage demands are skyrocketing in the Greater Toronto Area, according to Toronto Hydro Telecom Inc. (THTI).

As evidence of this trend, the Utility-Telco (U-Telco) has seen a dramatic increase in the number of circuits sold to major GTA data centres, including those of Hewlett-Packard Co., IBM Corp., Fusepoint Managed Services Inc., Q-9 Networks Inc. and SunGard, said Ian Miles, president of THTI.

Miles said demand for Gigabit Ethernet circuits is up about 150 per cent since 2002, and THTI now operates several 10-Gigabit Ethernet rings in Toronto.

Mark Quigley, research director, Canadian Market Strategies at the Yankee Group Canada in Ottawa agreed that telcos and data centre providers and systems integrators are indeed seeing increased demand because of these trends, not only in Toronto, but across the country.

He said events like 9/11 and the 2003 power outage have really driven home the need for organizations to have a comprehensive disaster recovery.

“From a backup and recovery perspective everyone has the needs but to vary degrees,” he explained.

Whether it’s a financial institution or a small retail outlet, all firms seem to be more interested in backing up data these days.

As a bonus, the cheaper cost of bandwidth lets users increase their data storage needs with­out incurring massive costs, Miles added.

“Many users are not aware of how much prices have declined,” he said.

For example, Toronto-based Seneca College wanted to move its data centre from its Newham Campus to York University but needed more bandwidth to make the move possible.

It also wanted to open a campus up in Markham but it was very expensive to move data across the Toronto border into Markham because Bell charges expensive rates to connect fibre between the two cities.

Seneca CIO Terry Verity said the college chose Toronto Hydro Telecom because the firm could offer bandwidth at a cost cheaper than it expected.

“Prices have fallen about 75 per cent,” he said. “What we were paying $35,000 for [a few years ago] we are now paying $4,000 or $5,000 for.” Additionally, Seneca is finding its storage needs increasing drastically but luckily he said storage costs are decreased dramatically.

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