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Talking to Bjarni Thorvardarson, CEO of Hibernia Atlantic, you wouldn’t be blamed for thinking that business growth is always a very organic process. As he explains the evolution of his business, it appears almost to have grown in a series of logical, consequential steps; not perhaps driven by an overarching vision, but each a natural reaction to the factors which have gone before. But as he puts it: “You can choose to either react to the needs of customers or not to; and if you choose not to react, you’ll be out of business soon. I’d like to be in the camp that does react.”
Not that there is any such thing as a single or certain path in business. “You still have to choose your business model and how you conduct your business,” says Thorvardarson. So what exactly led him to build a single submarine cable linking Boston and New York, which generated zero revenue, into a business with $60 million revenue, a 24,000km fibre network with 106 PoPs, a global financial network heavily focussed on low latency and a media vertical driven by the acquisition of Media Extreme, now Hibernia Media.
Thorvardarson is modest about his background: “a mixture of technology, a bit of business, a bit of finance, a bit of everything,” but with degrees in engineering, business and finance he is clearly well suited to telecoms. Entering the industry was a conscious decision: “All of that met in a focus point where I could make good use of different experiences in my prior life. I found telecommunications fascinating, especially in light of the deregulation of the market.”
Early roots
Thorvardarson was brought into Columbia Ventures Corporation in 2002 by investor Ken Peterson. The following year, the pair bought a transatlantic submarine cable from 360networks, one of the first investments they had made. Peterson asked Thorvardarson if he would head up the Hibernia venture, headquartered in Dublin, Ireland and Thorvardarson was happy to “take a look at what’s going on there and see what we should be doing.” He never planned to stay on: “I very much looked at it as a six month venture – go in, take a look, change a couple of things, and then move on. Now it’s five years later. And I’m still here.”
When he joined, Hibernia Atlantic consisted of the submarine cable and two PoPs, in Boston and Dublin. With a company that was a “new kid on the block,” without either revenues or customers, Thorvardarson had to find new solution, and quickly. His initial plan was to build “a few more PoPs in a few meaningful markets,” creating a feeder network for the transatlantic cable. But soon enough Thorvardarson realised that the terrestrial network he was creating had great potential in its own right. Selling PoP to PoP terrestrial traffic now contributes over half of Hibernia’s revenue. “You start with one thing and that leads to another,” he mused. “It gets a life of its own; that’s the beauty of identifying the opportunities in all of your assets.”
A challenge it may have been, but Thorvardarson could see the opportunities. “What we had was a completely diverse route from everything our potential customers had at that time. We took a tagline of security through diversity – and that proved to be very, very successful.” Every other transatlantic provider followed a similar route, leaving the US via northern New Jersey or Long Island and entering the UK via Cornwall. Hibernia’s cable travelled terrestrially from New York up to Boston, coming onshore in the UK just north of Liverpool. Thorvardarson’s realisation that this diversity was Hibernia’s biggest asset was, in his own words, “a fortunate one.” People have proved that they are always willing to pay more for a level of security; by recognising the value of his product and the diversity it offered, Thorvardarson was able to capitalise richly.
Vertical sectors
When it comes to capacity, the most competitive market in the world is the London to New York market. Hibernia took the next step of developing the global financial network, which focussed on the financial vertical. It provided PoPs directly into the financial exchanges in New York and London, guaranteed speed of delivery and a predominant focus on latency: “It all comes down to microseconds,” said Thorvardarson. “The rule of thumb is that for every 100km of fibre, you need about 1 millisecond. So if I can pull the fibre a bit tighter and shave 50km off the route, I save half a millisecond. We are continuously looking for opportunities to lower the latency or shorten the route.” There’s no room for complacency. The latency between London and New York hadn’t been shortened for 10 years; but Thorvardarson is now working on a project to build a new route between Halifax and London, mimicking the line of the flight path between the two cities, which will be ready by mid-year 2012.
Another venture was to embark on the media vertical, which was Thorvardarson’s first foray into acquisition with the purchase of Media Extreme, “our first and so far our only acquisition.” The experiment has clearly been a success: “We are very excited and now see it as a normal course of events to plan growth through inorganic ways as well as just growing organically.” Thorvardarson virtually guaranteed that we’d be hearing about future acquisions by Hibernia in the next couple of years: “We are looking at opportunities and seeing which of them have the greatest fit with our current operations. Then we’ll be proceeding accordingly.” When pressed about what form these developments might take, Thorvardarson was happy to speculate on a number of areas. Ideas include expanding the network or increasing the density of the network, building data centres in Hibernia’s “vastly under-utilised” cable landing stations, and developing general value-added services. He also spoke about his interest in entering another vertical sector – and the gaming industry has clearly caught his attention: “Bandwidth consumption and bandwidth growth is not going to end anytime soon. Just like computing power and memory, it is going to continue to grow.”
It was this fascination that kept Thorvardarson in the role at Hibernia, which he had originally seen as a temporary placement, and this fascination clearly drives every development he has made in his business: “I wanted to build on the cable and every time I made a turn I saw another opportunity, and I wanted to pursue that; then that led to another one. I just couldn’t say goodbye; I just kept on building on what I had done.”
Hibernia Atlantic |
| History: Hibernia Atlantic was established in 2001 by Columbia Ventures Corporation (CVC) and Constellation Ventures Partners, and is a transatlantic submarine cable and terrestrial fibre network that offers over 100 redundant network PoPs throughout Canada, the US and parts of Europe. The company’s working mantra is “security through diversity.” CEO: In January 2005, Bjarni Thorvardarson became CEO of Hibernia Atlantic, having previously worked for parent company CVC. Customers: Large enterprises, such as trading or financial firms, CDNPs, broadcasters, ISPs, carrier wholesalers and network operators. Network: Hibernia Atlantic has over 24,000km of network and its redundant rings include access to Europe and Northern America. The company claims to be able to drop traffic to any city in North America without touching New York, New Jersey or other major congested backhaul sites. Products and services: Hibernia Atlantic provides dedicated Ethernet, DTM and optical-level service up to GigE, 10G and LanPhy wavelengths as well as traditional SONET/SDH services. The company provides wholesale capacity prices, support and services. |
