Internet host ready to expand worldwide

By JENNIFER PITTMAN
Sentinel correspondent

SANTA CRUZ — Less than a year after SCITX, an international Internet co-location and managed hosting company, opened its doors in a tepid economy, the founders are announcing new alliances, new markets and plans to double its staff in a year.

It has been "a pretty hard time," said Benjamin Toker, vice president of marketing and sales.

Launched in July 2001, the company has been forced from Day One to delineate itself among a dwindling market for co-location companies, which provide the computer hardware and manage Web sites for other firms. SCITX set cautious goals from the outset. The plan included under-pricing competitors and conservative growth, primarily in the Central California region. The plan involved agility, however.

SCITX offers high-speed Internet access lines, a place where companies can set up and monitor their own secure servers for Internet sites, and a full-service managed hosting environment with people on board to watch over Internet sites 24 hours a day. To survive, SCITX shrunk its staff and expanded its services portion of the business. The company also is looking into expanding Internet application products for business.

About 65 percent of the business is generated from regional clients in Central California, but a growing portion of the business is international and includes clients from as far away as Pakistan and India. In April, SCITX announced a new five-person office in Sao Paulo, Brazil.

Founder and CEO Arlin Bleclic, formerly of Verio Inc. and Digex Inc., launched SCITX from 38,000 square feet of warehouse and office space in the old Wrigley building on the Westside of Santa Cruz. The building is owned by University Business Park, one of SCITX’s investors. With slow corporate spending on information technology, however, 2001 was a risky time to launch.

Last year, SCITX employed 17 people in Santa Cruz. Today, there are just 10 people and a couple part-time workers in Santa Cruz. The worldwide number, however, is up to 17, thanks to the office in Sao Paulo and another in San Francisco. Plans to open offices in Los Angeles and Las Vegas are pending.

"We are not experiencing the same difficulties that many of our larger competitors are experiencing during our current economic crisis," Bleclic said recently. "We see a very strong need for managed hosting and services worldwide, and we wish to fulfill that need."

The market for managed hosting is expanding rapidly, partly because companies are focusing on what they do best rather than trying to handle the Internet part of the business as well.

"In this kind of business environment, you’re better off partnering than reproducing what other companies can provide," said Geoff Caras, chief executive officer at The Igneous Group, which has a rack of servers at SCITX as well as another at Santa Cruz-based Internet service provider Got.net. Igneous is a small, Santa Cruz-based e-business services company.

"It’s not in our core competency, and it is in theirs. If there was no SCITX, we would have to consider going over the hill," Caras said.

While there are numerous other ways for Santa Cruz area businesses to get broad bandwidth Internet service and someone to monitor their Web sites, SCITX is the only facility in Santa Cruz that offers on-site security and 24-hour-a-day monitoring.

Clients include the U.S. Geological Survey, PublicMind, Catalla Systems, RadioMill, Curious Lab, InfoPoint Inc., the Nonprofits’ Insurance Alliance of California and the Monterey County Office of Education. The company also provides space to companies outside Santa Cruz, such as San Francisco-based LeadClick, which has a chief technology person in Santa Cruz.

Despite the local focus, the customer list includes cSquare, a Pakistan-based application development company and other companies in India, Asia, Japan and Latin America.

"For them it’s not Santa Cruz, it’s Silicon Valley," Toker said.

In April, SCITX moved into the rapidly growing Latin American market with a five-year agreement to be the exclusive Internet provider, hosting and managed services provider to Worldconnection. The Las Vegas office will be an office and data center. In Los Angeles, SCITX is hoping to work its way into the entertainment business by specializing in the transmission of music, radio, movies and video games. The plan is to help companies send the day’s shoot back to main computers and servers.

Contact Jennifer Pittman atjpitt4@aol.com.

WHAT: International Internet co-location and managed hosting company.

WHERE: Santa Cruz.

SERVICE: High-speed Internet-access lines, a place where companies can set up and monitor their own secure servers for Internet sites, and a full-service managed hosting location with staff to monitor Internet sites 24 hours a day.

EMPLOYEES: 17 worldwide, with offices in Sao Paulo, Brazil, San Francisco.

MANAGEMENT: Launched in July 2001 by Arlin Bleclic, formerly of Verio Inc. and Digex Inc., from 38,000 square feet of warehouse and office space in the former Wrigley building on the Westside of Santa Cruz. The building is owned by University Business Park, one of SCITX’s investors.