When Granite Networks first opened in Ottawa in 2011, it was something new on the data centre scene: a carrier-neutral data centre, competing alone against a monopoly – at the time, Primus unit Blackiron, which was bought by Rogers soon after.
That’s exactly what happened to Granite. Not long after it opened, the independent data centre was sold to Rogers, restoring the monopoly.
Now, Granite Networks’ James Mackenzie and Rainer Paduch have started over with Purecolo, another independent data centre. What’s different this time? Focus, focus, focus, says Mackenzie – and a little bit of luck.
Before Granite, Mackenzie saw high demand for a carrier-neutral data centre, which was the impetus behind his first big startup. Six months into the project, he was joined by Paduch, someone he says he had long admired, and together they set out to offer what they felt the big names could not.
“We could compete against the monopoly and we could do it bigger, better, smarter,” says Mackenzie. “The day after we opened (Granite’s) doors, we got our first call from Rogers saying, ‘Do you have a price in mind?’”
Six months later, Rogers bought Granite Networks. Mackenzie maintains this was the right thing for the company, which he felt didn’t have the focus to do what it needed to do.
“There’s a whole lot of responsibility in a company to not do what you want to do, but to try to do what’s right for the company,” he says. “What we had built is the good foundation blocks for a successful business.”
However, he and Paduch knew that the sale of Granite Networks was just the beginning of what they had set out to do.
“We still hadn’t solved the problem in the Ottawa market,” Paduch says. “We really tried to go back to our first principle. Who are our customers, and where are they going to be?”
The pair had an 18-month non-compete period during which to plan their next venture. They incorporated Purecolo after that time, initially with the intent of opening a centre of the same scale as Granite Networks. However, they soon switched strategies, deciding upon a smaller centre after they had more luck securing smaller businesses for the proposed space.
After shopping around for the best location to open Purecolo, they happened upon their current space by luck. Just as their first choice fell through, they found a space inside the Mitel building at 390 March Rd. that had been vacant for eight years.
The space had previously been used to bake ceramic parts for Mitel, so it had most of the infrastructure Mackenzie and Paduch needed – namely, “megawatts and megawatts of power,” says Mackenzie – negating much of the costly renovations they would have otherwise had to do themselves. That, plus the landlords’ eagerness to fill the space, meant their new home would cost them just over a third of what the other place would have.
“In the end, we were lucky that this place was here,” says Mackenzie.
Purecolo secured financing in April 2017 and, after a summer of construction, the green lights began to blink for their first customer in October of that year.
Low startup costs and smaller customers are just a few of the things Mackenzie and Paduch are doing differently. What they really learned from Granite Networks was that focus is key in building a new business, something Mackenzie says they struggled with the first time around.
“The problem is, nobody believes that a startup can do everything,” he says, describing how they would offer to help clients with firewalls, websites and more. “We were trying to be everything to everybody, and I think that hurt us.”
Having learned from Granite, both Mackenzie and Paduch say simplicity is key.
“Pure … colo. It reminds us every time we say the name,” says Mackenzie.
They’ve also learned their lesson when it comes to scale.
“One of the things we thought we needed to do (with Granite) was make a big splash,” says Mackenzie. Granite had 28,000 square feet of space, which made them the largest independent data centre in Eastern Ontario at the time. “For a startup, it was a nice feather in the cap, but it was an expensive feather.”
Purecolo, meanwhile, is starting smaller, but staying flexible and ready for growth. In the current space, they have another 2,500 square feet available, which could conceivably be taken up by just one client, but they have another 10,000 square feet available to them.
And it’s possible they may need that space. Paduch says that though Purecolo has been targeting small- to mid-range businesses, many of the potential clients who have approached them are much bigger than expected.
As startups go, maybe a data centre isn’t the most exciting, says Mackenzie. But it’s something they know there is demand for, and the range of customers approaching Purecolo prove just that.
“We’re very unexciting,” he says with a laugh. “The work we do is so important because it supports what all those other people are doing internationally.”
Paduch agrees, more succinctly: “Boring is profitable.”
“It’s really about the customer and giving them as much choice as we can,” he says. “If they prosper, then we prosper.”