Data centres are destined to become a vital element of the consolidating ASP (application service provider) industry, as more companies outsource their online services, according to Mr John Clancy of Internet backbone provider 360 Networks.

Speaking after a presentation to an IBEC breakfast seminar on the ASP industry this week, Mr Clancy, sales and marketing manager of 360 Networks's colocation division, said data centres would make strong inroads into the ASP space, given the "inexorable trend towards outsourcing in the market" and consolidation among ASPs.

A data centre, often called "a carrier hotel" is a secure specialised facility for housing IT and telecommunications infrastructure. Companies that decide to get involved with a data centre can avail of different levels of services, from a basic "server hotel" space through to full application hosting.

"Data centres are a good way of building customer loyalty," Mr Clancy said. ASPs are already locating in data centres, attracted by the prospect of "getting the IT manager off their back" and being able to concentrate on their core business.

360 Networks is due to open its new Internet exchange centre in Clonshaugh Industrial Estate in the second quarter of this year. The opening of the centre will coincide with the switching on of the company's new 12,200 kilometre transatlantic fibreoptic cable to its $70 million (P76.6 million) cable landing centre, which will link Ireland to North America and Europe.

Mr Clancy describes 360 Networks as a "tier one Internet backbone provider". The company offers customers global fibre connectivity as well as data centres. It will have a global fibre optic network 142,000 kilometres long and covering 100 cities worldwide by mid-2002.

The availability of global connectivity, real estate, power and an attractive tax regime makes Dublin a good location for data centres, says Mr Clancy. It is estimated that there will be around 15 data centre operators in operation by the end of 2001, occupying 1.5 million square feet of space in Dublin.

The data centre explosion will also be fuelled by carriers building data centres onto their network to attract customer traffic revenue, and managed service providers building data centres for increased managed service business, he says.

Companies such as 360 Networks will need to work on educating the market about outsourcing services to data centres, said Mr Clancy. In addition, industry partners will need to co-operate to provide higher-tier services because the market is likely to demand more than just basic co-location space.

Operators will also have to look to the international market. "Single location data centres will have a limited life-span and will only survive as regional players," Mr Clancy said.