|By John Savageau||
|January 5, 2010 04:00 PM EST||
Bjarni Thorvardarson is a rare telecom visionary. He thinks on a level of telecoms at an intercontinental level, rather than a national or local level. Hibernia Atlantic is his current project, and with recent news that the submarine and terrestrial cable system is now in the global media distribution business, he is shaking up the telecom community. An Icelandic native, he has brought his knowledge and skills to the United States, basing Hibernia Atlantic in Summit, New Jersey.
Pacific-Tier: Bjarni, what's been happening with Hibernia Atlantic in the past few years, since I had my last opportunity to visit with you?
Bjarni Thorvardarson: We've actually had a busy couple years – a very busy couple of years.
As you may recall, we started this business by buying a submarine asset that was formerly owned by 360 Networks. We've been busy trying to build our terrestrial network to try and connect this submarine cable to anywhere. We no longer refer to ourselves as simply a submarine cable, but rather a capacity provider in the eastern North America region and in Europe. Less than half of our business is now in trans-Atlantic capacity.
Even though that remains our core competence, and the core of our business, in terms of our business it is less than half of our revenue.
So that is part of the transformation that has happened over the past few years.
In terms of revenue, in 2005 we generated about $2 million in revenue, then $7 million, the $18 million the following year, then $28 million, and last year we generated about $38 million dollars.
And now the target for 2010, with our addition of MediaXstream, is about $75 million dollars in revenue. So, we've been growing about 40~50&, up to 80 or 90% a year. So you see it's a very rapid growth. We are riding on a couple things. One is that we are operating in the biggest capacity market in the world, which is the Northeastern part of North America and Europe. And we are focused on a niche sector, which is the big bandwidth market – which is by itself growing about 40% in volume terms a year
And now, since we still have a relatively small market share, we are growing even faster than the other (traditional) markets (players). That's how we've been successfully growing our revenues.
Last year, in 2009, we were confident for the first time, and we were profitable. We are very happy with the way things are going.
Pacific-Tier: That's excellent! Can you tell me a little about yourself, and how you got into the business of both submarine and terrestrial bandwidth and capacity?
Bjarni Thorvardarson: Sure. I've been in the IT and telco business for about 17 years since I finished my business studies. By education I have a degree in engineering from the University of Wisconsin (At Madison). Later on I added a science degree from the London Business School.
I went into the telecommunications business, and from there into investment banking (around 1998). Then shortly thereafter I started a fund that was investing in telecommunications and IT. That was 1999 into 2001. From there Ken Peterson actually got interested, Ken Peterson was the owner of Columbia Ventures (CVC), got into an investment in telecommunications. He brought a co-investor in with me, and bought the fund eventually. That's how it came about that I started working for CVC.
And I've been investing on their behalf in telecommunications since 2002.
Now one of the investments that we had made was indeed Hibernia Atlantic. That was 2003. Then in 2004 we sold an investment that I was responsible for here in Ireland. Then I took over the responsibility of Hibernia Atlantic. Since 2005 I have been with Hibernia Atlantic, running it for CVC.
That's how it came about that I've been investing and spending my time in telecommunications.
When it came that I was to take on the Hibernia Atlantic project, it was meant to be a 6 month project. We'd see what we could do, fix a couple things, and recruit the right people. It's one of those things that a 6 month window turned into a sliding 6 month window. And during the next 6 months we ended doing something exciting. That's what happens when you get interested in what you are doing.
You see the potentiality, you see what can be done, and you kind of stick around – and so its 5 years now. I no longer refer to it as my 6 month project, I now refer to it as my passion. It's what I do. I've been commuting between Ireland and the US now for the better part of 5 years, and relocated to New Jersey where we have the Summit headquarters, or US headquarters a few years ago. So I am pretty heavily enrolled in the Hibernia project.
Pacific-Tier: That's good. You mentioned earlier the topic of moving from telephony to broadband. Where does Hibernia and your plans fit into what I would call the "globalization of communications," or the "flattening of the communications architecture…" How do you fit into that model?
Bjarni Thorvardarson: Hibernia is very much a long-haul provider. We started in the long-haul wholesale capacity business, so provided the infrastructure provider to other service providers – the likes of BT and France Telecom, Cogent and the like… We did a very good business connecting the biggest consumer markets to places like New York, London, Amsterdam, Chicago, connecting those markets and enabling service providers in those markets to connect to different parts of the world.
Our business is really predicated, it is built on the globalization of business, or the globalization and international movement of information. That was the core part of our business model.
Now since then we have moved on to going up the value chain (if you like) to become the service provider to enterprises ourselves, and begin focusing on the finance vertical, which is a very demanding market. They (financial markets) are demanding and expecting low latency circuits between different trading markets and centers. That was a big first step into the enterprise world.
The next step we took was to the media sector, which we did first when we were acquainted with or partnered up with MediaXtreme, investing in MediaXstream a couple years ago. Then finally culminated in the acquisition of MediaXstream last month. So that's our big step into the media market.
So now Hibernia's approach to the market is threefold:
- We are still very much the legacy we started, which is the wholesale provider to other service providers and telcos around the world
- Second is the finance sector
- Third is the media sector
But they all are very much relying on the globalization of business and people's general view of the world. So we have to look and depend on it.
Pacific-Tier: So in a traditional sense submarine and terrestrial long-haul networks relied on SONET or SDH technologies as the basic (communications) protocol. Is Ethernet playing a stronger role in anything Hibernia is doing now?
Bjarni Thorvardarson: We started providing waves (2.5 or 10 Gigabit) via SDH and SONET as a product to the wholesale sector. For technical reasons including that was the technology Hibernia was built on. And also that was the product the wholesale providers relied on. They need to connect their different POPs (Point of Presence) equipment. A POP in New York, to a POP in London, that equipment relied on and called for SDH/SONET to connect the POPs.
Now as we grow into the enterprise sector, then the guys, the traders, or whoever we are doing business with – they don't have SONET or SDH equipment. They have Ethernet equipment or equipment that calls for Ethernet protocols. So it is incumbent on us to be able to provide that without cumbersome translation from one protocol to another.
So we have since built Ethernet at the core of our protocols. Now we can offer Ethernet over SONET, which is dedicated Ether net point-to-point. And we also built, using H3C equipment, a product that we can connect customer to and point-to-point to multipoint capacity.
So moving from the SONET/SDH world to the Ethernet world, or switched Ethernet is very much what we are doing. I am right with you there that we are phasing out one world and moving to another one. Even the telco providers are increasingly moving into the Ethernet world. Especially when it comes to building out their ISP or Internet networks.
Pacific-Tier: When you see organizations like the Carrier Ethernet Neutral Exchange (www.cenx.com) and things like that popping up that are basically designing their product on the old bilateral telecommunication company design… Do you believe that bilateral Ethernet, or that bilateral carrier relationships still have a role, or will companies like Hibernia make many of those old relationships irrelevant?
Bjarni Thorvardarson: Hibernia, in its traditional sense, is not going to replace bilateral agreements. But bilateral agreements are going to be phased out when it comes to the exchange of Internet traffic, because exchanges are going to replace them. It is like the minutes (telephone settlement) business extremely cumbersome. If you want to build a bilateral relationship with other telecommunications providers you want to exchange traffic with through some of the voice exchanges you can do business in a matter of days.
And that is the same with the exchange of Internet traffic. If you want to do peering on a bilateral basis with companies it takes you years to build up. If you want to do it through an intermediary (such as a public internet exchange Point), clearly it is moving from the bilateral agreements to the exchanges.
Now how does that related to the price a carrier has to pay when going through the exchanges? To transit pricing? Or what have you?
And we can see where these intermediaries are actually charging less and less for the service of being in-between the delivery of the data and the content origination. You can see that in transit pricing, and how transit pricing is continuing to plummet. So I think that we are becoming less reliant on the bilateral agreement. And I firmly believe the opportunity and the necessity of getting more exchanges up and running is important.
And I think the same transition, you can see the same transition when it comes to not only Internet peering, Internet traffic is also the interconnection of Ethernet circuits, the same transition occurred that we saw 50, 60, 70 years ago when it came to voice traffic. If you wanted to make a call from London to New York you had to call an operator in London, and he made a physical cross connect to a long-distance line that terminated in New York.
The operator in New York then made the physical transition to the local tail line to the customer in New York.
That's very much the same as when you are setting up an Ethernet circuit today. You have to build up a physical cross-connect in New York between the local tail provider and the Hibernia facility, and then in London to the tail provider over there.
With INNs and with proper Ethernet virtual cross-connects which are relying on a virtual exchange, or like exchanges that you are referring to, it's going to revolutionize the provisioning and setup time of these Ethernet circuits. We can see a leap in that direction over the next couple years.
Pacific-Tier: One other thing I'd like to ask about Hibernia's role in the Internet and international community in particular. I've been spending a lot of time in developing countries myself over the past year or so. So does Hibernia play a larger role, more than just an economic role,.. Do you also have a larger role in supporting the global community to provide a product that will bring global communications, education, entertainment, media, - can you bring that type of thing to another level?
Bjarni Thorvardarson: I think that when you have a major company, a large company on the global economic scale, then you have to sit back an think about what your global social responsibility is to the world, and what you can contribute to the world. Hibernia is light years away from being at that size, and we can best fulfill our role now by looking for what is our economical role in this world.
Today that role is to provide large scale, high interconnectivity in all the market we operate in at a very attractive price. And by doing that we can contribute to the successful globalization commerce that will facilitate the business which will break down barriers that might prevent doing business, or from offering access to multinational companies.
That's really what I think is our role in the world, to enable companies and people around the world be operating seamlessly as if they were sitting at two desks right next to each other (companies), and thus taking away the physical barriers of being located thousands of miles apart.
Pacific-Tier: If you look at the ideas, of say Carr's concept of the "Big Switch" (Nicholas Carr), where telecom companies, and computing companies, and storage companies actually become nothing more than a huge, ubiquitous utility that people expect. Do you agree with that idea, or do you believe companies like Hibernia should be able to offer much higher value than the idea of a utility "big fat pipe?"
Bjarni Thorvardarson: Well I think everyone has to know which business they are in, and that people can be in more than one business at a time. I say that from experience, because CVC (his prior venture capital company) was in the manufacturing of aluminum, and the manufacture of advanced products that were made from aluminum.
Making or smelting aluminum is very much a commodity business. The success of the business is predicated, or based on you operating a business efficiently. It's about cost, cost, and cost. If the price per pound of aluminum that you smelt is higher than your competitors, you are out of the market. So that's how we operated in the aluminum market.
But we also had exclusion companies. That is changing the aluminum ingot to bars that can be used by manufacturers, and be converted to door frames, and window frames, and converted into materials that could be sold to the end users or consumers.
So we were very much aware of the different needs of the value-added service market and the commodity market.
And I think the telecom business is very much the same. You have to know whether you are in the commodity market, the utility market, and there is a fair amount of utility market in the telecommunications world. I think the core of what Hibernia does is just that. It is a utility capacity between the POPs. It is providing 10G (Gigabit) capacity between London and New York, or London and Amsterdam, connecting all these high capacity markets, and it is a utility market.
You have to be very efficient in terms of how you operate your market.
Then, when you go up to the media market, or to the finance market, it is no longer a commodity market. The trader that is trading between London and New York, he does care about the price he is paying, but even more concerned with no having a second-rate service.
So you have to know which market you are operating in, and telecommunications will remain within the two markets.
Now Nicholas Carr's concept or theory of the "Big Switch" where the world is going to cloud computing as a utility, where you plug into a socket in the wall and you are connected to a network of computing power is a noble one, and a very interesting one, and I think it certainly is going in that direction, but the difference between the bits and bytes, and the electrons that flow on the wires of the utility companies or the electric companies – it is bits and bytes of sensitive information that you do not want leaving the company or be flowing on the wires outside of the company.
So there are many challenges the "Big Switch" theory or concept. But there are a number of companies that are building up a very successful business model. Amazon being one, and a number of other companies offering cloud computing and growing extremely fast.
I am fascinated by the concept and the model of business, but I don't think there is quite the pure cut between computing and the traditional utilities.
Pacific-Tier: Any other vision or looks into the future Hibernia may be able to share as you peer into the next 3 to 5 years?
Bjarni Thorvardarson: I wish I could pretend to have a crystal ball, and say what our visions are, but our vision, really for the near to mid-term future is to continue our growth into the different enterprise verticals. We need to continue to service the market we comfortably define as our core markets, being North America and Europe. That's where we will continue to focus our attention.
But we will to some extent continue to introduce new products that will leverage our network, and continue focusing on different verticals that we can also continue leveraging the network. The game for Hibernia over the next couple years is leveraging the asset. Those assets are not only our network, but also the experience of our company (employees) – the people we have, the processes, and the systems we have. Our competence and the network – that is what Hibernia is going to be not only for the next few years, but beyond.
Pacific-Tier: Do you see any potential partnerships or expansion across other parts of North America or into Asia at some time in the future?
Bjarni Thorvardarson: Without any doubt, I am sure we will find partnerships that will benefit both parties, but it is nothing I can speak about or speculate about right now.
Pacific-Tier: Fair enough! Any final words on Hibernia, yourself personally, or what you see as interesting things happening in the market?
Bjarni Thorvardarson: Not really, I am just enjoying working in this space, and I'm looking at a number of exciting opportunities. M&A opportunities, growth opportunities, and I am just excited to be here.
Pacific-Tier: As we all are, and thank you very much for your thoughts – it has been a great discussion.
Thank you! It is my pleasure!
|Mr. Bjarni Thorvardarson has been the CEO of Hibernia Atlantic since January 2005. He joined CVC, Hibernia's parent company, in 2002 from ISB bank where he launched and managed the listed Talenta-Technology fund which focused on emerging communication and IT opportunities. Prior work experience includes investment banking at FBA bank, management of an MIS department and European Sales Director of an IT company. Thorvardarson holds an M.Sc. degree in Engineering from UW-Madison, an MBA from ISG in Paris and an M.Sc. in Finance from London Business School.|
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
Jan. 26, 2015 09:00 PM EST Reads: 2,539
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.
Jan. 26, 2015 07:45 PM EST Reads: 2,506
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
Jan. 26, 2015 06:15 PM EST Reads: 3,861
The Internet of Things (IoT) is rapidly in the process of breaking from its heretofore relatively obscure enterprise applications (such as plant floor control and supply chain management) and going mainstream into the consumer space. More and more creative folks are interconnecting everyday products such as household items, mobile devices, appliances and cars, and unleashing new and imaginative scenarios. We are seeing a lot of excitement around applications in home automation, personal fitness, and in-car entertainment and this excitement will bleed into other areas. On the commercial side, m...
Jan. 26, 2015 06:00 PM EST Reads: 2,811
SYS-CON Events announced today that CodeFutures, a leading supplier of database performance tools, has been named a “Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. CodeFutures is an independent software vendor focused on providing tools that deliver database performance tools that increase productivity during database development and increase database performance and scalability during production.
Jan. 26, 2015 06:00 PM EST Reads: 1,680
Dale Kim is the Director of Industry Solutions at MapR. His background includes a variety of technical and management roles at information technology companies. While his experience includes work with relational databases, much of his career pertains to non-relational data in the areas of search, content management, and NoSQL, and includes senior roles in technical marketing, sales engineering, and support engineering. Dale holds an MBA from Santa Clara University, and a BA in Computer Science from the University of California, Berkeley.
Jan. 26, 2015 06:00 PM EST Reads: 3,076
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. He discussed opportunities and challenges ahead for the IoT from a market and technical point of vie...
Jan. 26, 2015 05:45 PM EST Reads: 3,117
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Jan. 26, 2015 05:00 PM EST Reads: 7,611
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, addressed the big issues involving these technologies and, more important, the results they will achieve. Rodney Rogers, chairman and CEO of Virtustream; Brendan O'Brien, co-founder of Aria Systems, Bart Copeland, president and CEO of ActiveState Software; Jim Cowie, chief scientist at Dyn; Dave Wagstaff, VP and chief architect at BSQUARE Corporation; Seth Proctor, CTO of NuoDB, Inc.; and Andris Gailitis, C...
Jan. 26, 2015 05:00 PM EST Reads: 2,525
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 26, 2015 02:30 PM EST Reads: 2,363
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, discussed how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.
Jan. 26, 2015 02:15 PM EST Reads: 2,934
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by mining large volumes of unstructured data, and how data tracking delivers uptime when it matters most.
Jan. 26, 2015 02:00 PM EST Reads: 3,534
In this Women in Technology Power Panel at 15th Cloud Expo, moderated by Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, Esmeralda Swartz, CMO at MetraTech; Evelyn de Souza, Data Privacy and Compliance Strategy Leader at Cisco Systems; Seema Jethani, Director of Product Management at Basho Technologies; Victoria Livschitz, CEO of Qubell Inc.; Anne Hungate, Senior Director of Software Quality at DIRECTV, discussed what path they took to find their spot within the technology industry and how do they see opportunities for other women in their area of expertise.
Jan. 26, 2015 01:45 PM EST Reads: 2,120
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Jan. 26, 2015 01:15 PM EST Reads: 2,284
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
Jan. 26, 2015 01:00 PM EST Reads: 3,873
SYS-CON Media announced that Cisco, a worldwide leader in IT that helps companies seize the opportunities of tomorrow, has launched a new ad campaign in Cloud Computing Journal. The ad campaign, a webcast titled 'Is Your Data Center Ready for the Application Economy?', focuses on the latest data center networking technologies, including SDN or ACI, and how customers are using SDN and ACI in their organizations to achieve business agility. The Cisco webcast is available on-demand.
Jan. 26, 2015 12:00 PM EST Reads: 1,331
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 26, 2015 11:30 AM EST Reads: 2,559
Advanced Persistent Threats (APTs) are increasing at an unprecedented rate. The threat landscape of today is drastically different than just a few years ago. Attacks are much more organized and sophisticated. They are harder to detect and even harder to anticipate. In the foreseeable future it's going to get a whole lot harder. Everything you know today will change. Keeping up with this changing landscape is already a daunting task. Your organization needs to use the latest tools, methods and expertise to guard against those threats. But will that be enough? In the foreseeable future attacks w...
Jan. 26, 2015 11:00 AM EST Reads: 2,918
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Jan. 26, 2015 11:00 AM EST Reads: 2,855
Building low-cost wearable devices can enhance the quality of our lives. In his session at Internet of @ThingsExpo, Sai Yamanoor, Embedded Software Engineer at Altschool, provided an example of putting together a small keychain within a $50 budget that educates the user about the air quality in their surroundings. He also provided examples such as building a wearable device that provides transit or recreational information. He then reviewed the resources available to build wearable devices at home including open source hardware, the raw materials required and the options available to power s...
Jan. 26, 2015 11:00 AM EST Reads: 2,091