Capturing another slice of the $1 billion dollar application service provider pie, Q9 Networks Inc. today announced it has scored a major contract from TD Securities Inc.
According to Osama Arafat, CEO of Toronto-based Q9 Networks Inc., the deal marks “one of the larger deals (for Q9), and also one of the more complex ones.”
Under the agreement, TD Securities has moved several of its key applications to Q9’s downtown Toronto data centre, a Fort Knox-style structure that features several levels of hydro power redundancy, including diesel generators and batteries. “We can survive indefinitely without city power,” Arafat said. The building also features state-of-the-art security with biometric scanners, guards and advanced fire detection and suppression capabilities.
According to Charlie Freiheit, vice-president of global technology at TD Securities in Toronto, the bank signed the agreement with Q9 primarily to host the hardware comprising its new storage technology system, which is filled with sensitive customer data, something that was “cost-prohibitive” to do in-house, given the security and technical demands it would place on them.
“We were looking for a very secure, very state-of-the-art facility,” Freiheit said. “Lots of companies build data centres, we wanted to understand the technology they use … We investigated Q9’s business plan, and we investigated Osama (Arafat).” Q9’s downtown location, close to TD Securities’ offices, was also attractive, he added.
The investment bank joins roughly 80 other customers at the Q9 data centre, which already houses systems from such companies as Noranda Inc., Globe Interactive and The Shopping Channel.
Q9 is among an emerging breed of so-called application service providers targeting corporate customers looking to unload the power and real costs associated with hosting Web and network-related systems on-site.
A recent report from Framingham, Mass.-based analyst firm IDC found the worldwide application service provider spending is becoming a multibillion-dollar market. According to IDC, customers spent US$693.5 million on these services last year, and by 2005 they’ll be shelling out more than US$13 billion annually.
TD Securities Inc. is at http://www.tdsecurities.com. Q9 Networks Inc. is at http://www.q9.com. IDC Canada is at http://www.idccanada.com.