Ditched data vault brainwave vaults ditch

A variety of causes are being offered for the failure of a secure data vault scheme to take root.

A variety of causes are being offered for the failure of a secure data vault scheme to take root.

The plan to create five vaults across the country for storage of data from overseas customers had its origins in the Knowledge Wave conference last year. It echoed a similar 1980s plan by Databank founder Gordon Hogg for a massive data storage facility that demanded a public investment of $100 million.

But after a year of trying to drum up funding, the idea’s prime mover, Gary Connolly, says he’s sold the intellectual property on which the scheme was based to Australian interests (see Australians take up data vault idea).

One of the scheme’s biggest backers was Auckland company MI5, which formed Secure Data Vault New Zealand (SDVNZ) with Connolly.

MI5 CIO Helen Fisk says SVDNZ made “an executive decision” to sell the remains of the system to Australia when it was apparent funding was too hard to find.

“We got ready to go to consultants for money. We had proven concepts,” Fisk says, “but we could not afford any more of our time when other countries are working to pick up the ball now.”

Fisk feels timing, just after the dot-com crash, was a big issue.

“It was a big idea. Big ideas carry risk. Investors are just being more careful than they have ever been before.”

Gordon Hogg, who says he was asked by Connolly to get involved on the strength of his 1980s plan, says the Australian sale was “news” to him and he had not heard from Connolly in months.

“It was an excellent idea. It could not get enough interest here,” Hogg says. “But it won’t preclude us from doing anything more. It’s the usual story. There’s not the right sort of money around.”

The current government, through Industry New Zealand, showed an interest, as did some 45 companies and government agencies.

But the scheme didn’t advance beyond a now-closed mini-centre on Auckland’s North Shore.

Joseph Rosseau, who has been studying the possibility of creating a cluster for security companies for Industry New Zealand, looked at the vault concept and says, “as always, the ultimate validity is the market”.

Rosseau says data storage laws vary from country to country and Secure Data Vault New Zealand (SDVNZ), the group established by Connolly and Auckland company MI5, “did not fully come to grips with the concept”.

Robin Ducker, former boss of Auckland UniServices, which staged meetings on the scheme, accepts Connolly worked hard on the project, but says no investor thought it was worthwhile.

Others involved in the initiative, who now wish to be unnamed, are less charitable, saying “there was a lot of bullshit around” and note that Australia already has empty data centres.

But Connolly hits back. “We had 45 companies who circled around to see if there was any money. There were a lot of greedy people who were trying to make a quick buck. The Australians are looking at making a profit, not taking a profit. This project is not a local concern any more. Because New Zealanders are averse to taking a risk, the vaults are going somewhere where people are taking a risk.”

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