Disaster recovery and computer services company Guardian iT said today it was to close the “internet hotel” it opened less than a year ago.
The web-hosting facility at Heathrow offers secure internet facilities for businesses and was billed as the most advanced centre of its kind in Europe. But Guardian iT said demand for the facility had failed to meet expectations during one of the most challenging years in the companys history.
It will now utilise the 130,000 sq ft base at Heathrow Corporate Park for its core operations of business continuity and data management.
The withdrawal came as Guardian iTs half-year pre-tax profits before one-off costs lifted 23% to £5.2m. If the web-hosting operation had been excluded, the figure would have risen by 98% to £8.3m during the six months to 30 June.
The web hosting business, known as iXguardian, won contracts from publishers Informa and Conde Naste generating £1m a year, but also saw many more potential customers cancel or delay plans.
While iXguardian will honour existing contracts, around 20 people are set to lose their jobs at the division.
The company, based at Weybridge, Surrey, will also write-off £8m this year following the failure and take a further £4m hit next year after reorganising the facility.
Richard Raworth, chairman, said the company had not been prepared to sanction extra fundraising in order to keep up with rivals.
He added the optimism last year surrounding the growth of web hosting had not been sustained.
Raworth said: “The web hosting market opportunity has reduced substantially and the excessive number of entrants into the market and the proliferation of their facilities has led to massive overcapacity.”
EGi News 03/09/01
