Cloud provider Datacentred shuts down after losing key customer

Cloud provider takes website offline and posts message on social media warning customers to migrate from its service within 24 hours

Salford-based cloud services provider Datacentred went into administration after its biggest customer pulled its business, an administrator's report has revealed, with the firm now shutting down completely.

Datacentred went into administration in August but the joint administrators had hoped to sell the business and keep it operational under new ownership.

However, a post on the firm's Twitter page today said its cloud services will be shut down over the next 24 hours and warned customers to migrate their workloads.

The Datacentred website was also taken offline today, and replaced with a message attributed to "the Datacentre Team", which reads: "Unfortunately, we have suspended our cloud services.

"Thank you to all our customers and friends over the years for your support."

This message has since been removed but a screenshot can be seen below.

According to the administrators' report, Datacentred's revenue came from two sources: co-location customers in its datacentre; and cloud customers, with the cloud side of the business making up around 90 per cent of sales.

However, 90 per cent of the cloud revenue came from one customer, which told Datacentred in June that it would be pulling its business with the firm and moving to another provider.

It had been rumoured that the customer was HMRC, which selected Datacentred's OpenStack public cloud platform to host its digital tax platform in 2016.

Unsustainable business

Datacentred had planned to formally split the business in two, but the loss of its main customer led to an "unsustainable reduction in revenue", the report stated.

The administrators had initially hoped to save the company by finding a new owner but, despite discussions, this did not come to fruition and they are now looking to sell assets to pay creditors.

In total 78 companies showed an interest in buying the stricken cloud provider, with 57 signing non-disclosure agreements.

At the time of the report, administrators were considering two offers - one for the cloud team and associated goodwill, and one for the "movable items of plant and machinery associated with the physical datacentre space".

At present, the administrators do not know what the outcome will be for preferred and unsecure creditors.

Trade creditors are owed £206,704, while HMRC is owed £52,547.

The largest unsecured creditors, aside from HMRC, are Salford City Council, which is owed over £43,000; and SSE Supplier which is owned nearly £47,000.