But this is what the US-based Globix Corporation has done with the first-phase opening of its new data centre in London in May. The centre, situated in the old Companies House and located between the City and London's West End, covers 250,000 sq ft of floor space, with 180,000 sq ft devoted to the centre itself.

Despite the current economic climate, Globix believes the time is right for expansion. It already has data centres in New York and in Silicon Valley, and opened one in London's New Oxford Street in 1999. It was the increasing demand for data centre services that prompted the latest expansion and Globix has raised more than $600m to build them around the world.

The new London data centre - which will also become Globix's European headquarters - is known as Globix House and offer eight times more capacity than the existing centre. However, the New Oxford Street facility will continue to operate alongside the new centre.

In the fiscal year ended September 30, Globix reported revenues of $81.3m, with internet revenue up 307 per cent year-on-year to $53.1m. Globix has more than 850 employees and forecasts that revenues for the fiscal year 2001 will be around $130m-140m.

The company has attracted a number of major clients in the financial services, healthcare, media and entertainment, education and other sectors including Independent Television News, Sports.com, Thistle Hotels and the publishing group VNU. In March Globix announced that it was now hosting the website of the big US retailer Walmart, Walmart.com.

An internet data centre allows companies to outsource their internet services, such as an e-commerce operation. This typically involves housing web servers and related technologies in the data centre which provides around-the-clock technical support and services. Alternatively, companies can place their equipment in a centre and have their own staff inside running the system.

Lord (Anthony) St John of Bletso, managing director, Globix (Europe) and business development director, says his company's main target customers are bricks-and-mortar corporates that are transforming into "net liberated organisations".

Globix offers three core services, says Paul Bonnington, vice president for marketing worldwide: "There's the infrastructure, the data centre with secure, protected facilities that house the company server. There's secure and reliable connectivity thanks to a high-speed, fibre-optic network which we own, and then there are the added-value services."

These include web hosting, e-mail, e-commerce, internet security, corporate training and media streaming services. The company also offers internet access via satellite and high-speed digital telephony DSL lines.

"We like to sit down with our customers and find out that they want to achieve and then find the best way of doing that. Some solutions are very complex, and require a lot of design and configuration," says John Moore, vice president of field operations, Europe.

Lord St John admits that the UK market is harder to crack than the US: "There is a difference between how the two territories approach the internet. Eighty-one per cent of UK companies have an online presence but few are using it for commercial services. Part of our job is education."

Mr Bonnington adds that outsourcing internet and IT operations can save organisations money and bring extra efficiency, but he admits: "It's harder now to reach those traditional companies that are not cutting back on their internet presence. The sales cycles are longer and the days are gone when start-ups flush with cash would come rushing to data centres to set up shop."

In many cases, says Mr Bonnington, the biggest obstacle is an organisation's internal IT management, as it generally wants to keep everything in-house.

Andrew Cramond, vice president of European facilities, says the new data centre will have 120 staff and the same power output as Canary Wharf Tower, which has 1m sq ft of office space. "In a sensitive operation like a data centre, you obviously can't have breaches in security so we use biometric entry systems and sophisticated camera systems," he adds.

The move to Companies House was assisted by Nexus, a properties, facilities management and business relocation service. Mr Moore says the data centre's location was carefully considered: "Data centres have traditionally been in distant locations, but we prefer to keep ours close to our clients. There's something comforting about knowing that your data centre is within easy reach of your company."

But with so many companies now tightening their financial belts and a general disenchantment with the internet, can Globix make its new data centre pay its way? Lord St John believes so, even though he expects there to be some consolidation in the data centre market over the next year or so.

He adds that Globix has been fortunate in that the new dotcom companies form only a small fraction of the company's client base: "Brokerage firms and financial institutions are selling products on the internet. The e-commerce market is here and the internet is here to stay. In the past, the focus has been on the back-office and corporate intranet, but the focus is switching to the front-office and customer relationship management, sales and return on investment."

He adds:" We're here for the long run and that means looking ahead for the next three to five years. It's a challenge, but one we believe we can more than meet."

George Cole