New CEO Mulls Future Path for The Planet/ EV1Servers

Doug Erwin has a big job ahead of him. As the new CEO of The Planet and EV1Servers, Erwin must blend the operations of the world's two largest dedicated server providers and position the new entity to compete in a rapidly-evolving sector of the hosting industry. But Erwin, an IT industry veteran, is used to large challenges. And GI Partners, the new owner of The Planet and EV1Servers, has plenty of ambition and a track record of building big.

The two Texas-based companies, which were acquired by GI Partners in early May, are plenty big already. The Planet and EV1Servers have more than 2.7 million hostnames between them, and between Dallas and Houston operate seven data centers and 370,000 square feet of web hosting space.

Customers of both companies are eager to hear what changes lie ahead. As he settled into his new position last week, Erwin said they'll need to wait a little longer. "In the next 30 days I'm going to put together the new management team, and I've committed to everyone that in the 30 days they'll know where their job is," said Erwin. "Within 90 days from today I intend to have our strategy completed. We don't even have a name for the company yet," he added, saying that all options remained on the table, including choosing between the two brands or adopting an entirely new name.

"The challenge I see is making sure we recognize our strengths and build on them," he said. "I think there's no question that success breeds challenges. If you're growing faster than the available capital, you're in trouble. In the early years, a lot of our competitors faced those challenges. We're very well funded by GI Partners, and we've got very nice cash flow. I'm not sure you want to be growing 55,00 servers by 50 percent a year, though. These data centers are expensive."

GI Partners knows about data centers. The company was founded in 2001 with more than $500 million in financial backing from CB Richard Ellis Investors and CALPERS, the world's largest public pension fund. Its primary focus was the data center sector, where it acquired properties at attractive prices due to oversupply and bankruptcies. Those holdings eventually formed Digital Realty Trust, a publicly-held real estate investment trust (REIT) which owns 49 properties totaling 11.2 million square feet.

As Erwin charts the course ahead for The Planet and EV1Servers, he said GI Partners stands ready to make more deals if the right opportunity presents itself. "We have a pretty powerful company today," said Erwin. "There's some opportunities that allow us to get into different markets. When we lay out our strategy, we'll look at the various opportuntiies we see. If we don't have one of them covered, it may make sense to jump-start things by looking for a company that can fill that need."

Erwin has a lengthy history of business leadership in the Houston area. Most recently he was chairman and CEO of blade server pioneer RLX Technologies, which was acquired in October 2005 by Hewlett Packard. Prior to RLX, Erwin was founder, chairman and CEO of PentaSafe Technologies, a security provider that was acquired by NetIQ in October 2002. Erwin also served as chief operating officer of BMC Software, Inc., one of the largest software developers in the United States.

Erwin said he'll be "looking for opportunities in the virtualization space," which is seen as an important new frontier in the hosting industry. Some analysts believe new hosting services based on platforms of server clusters represent a competitive challenge for dedicated servers. "When I went to RLX, one of their secret sauces was the ability to manage multiple blades with software," Erwin noted. "I think it's a real business opportunity, and I have been playing in this space longer than my competitors. It's an amazing opportunity, particularly when you look at what size allows you to do. I think scale will become very important."