Sealand’s Hosting Venture Hits Choppy Waters Adam Eisner, theWHIR.com
From Web Hosting Monthly, September 2003 edition
October 6, 2003 — (WEB HOST INDUSTRY REVIEW) — When HavenCo (havenco.com) first announced it would establish a secure, offshore hosting facility in the Principality of Sealand, many critics were skeptical about the viability of a hosting firm located in a disputed territory.
Three years and several dozen prominent news items later, the company is still in business, offering several services that include managed hosting and colocation; however, a controversy has recently erupted surrounding the venture’s facilities, network redundancy and even financial viability.
In a presentation given last month at Defcon, a popular hacker and security convention held each summer in Las Vegas, former CTO Ryan Lackey blasted the company for poor operational standards, extended outages, misleading business practices and more. He also recently posted photos of what he says is the company’s sparsely-filled data center to a Web site he maintains titled “HavenCo: show and prove”.
Lackey also claims the company is not signing up new clients, is physically staffed by one or two people and owes him $220,000 – all of which seems to create a scenario far from the edgy picture painted by Wired Magazine when Lackey & co. graced its cover in July 2000. At the time, HavenCo’s goal was described as trying to establish the world’s first offshore “data haven” seven miles from land and in the middle of international waters. The company intended to do this by locating in Sealand – a 6,000 square-foot World War II-era gun tower located in Europe’s North Sea. According to Sealand, it is the “world’s smallest sovereign territory.”
The tiny nation has had a short, eventful history that includes an invasion and brushes with the British government regarding its supposed independence. The British and American governments both officially maintain a policy of “non-recognition” with Sealand, but have left it alone for the most part since former English major Paddy Roy Bates first occupied the tower in 1967 (although Bates once temporarily lost possession of the tower before eventually recapturing it in a bloodless raid).
Lackey, who helped start the HavenCo venture, left the company in late 2002 amidst what he alleges was a management struggle. Lackey said he arranged to continue reselling HavenCo’s hosting services, but that the agreement between him and the company was broken within five days of his departure from Sealand (Lackey actually moved to Sealand to work there).
Many reports following Lackey’s presentation were quick to dismiss HavenCo as dead in the water, but company operations appear to be continuing. “The company is doing well,” said Michael Bates, Roy’s son, in an e-mail interview. He declined to comment on the details of HavenCo’s clients, citing customer confidentiality.
Michael also said Ryan was asked to leave for misappropriating company assets. “You must draw your own conclusions why he should have talked the way he did at Defcon,” he said. “It doesn’t really need a lot of working out.”
Regardless of who is right or wrong in this situation, both sides appear to agree on one thing: there’s plenty of untapped potential left in the offshore Web hosting market. Lackey’s new project, named Metacolo, demonstrates he still has faith in the offshore hosting model – he is trying to establish a “high-tech free trade zone” that incorporates data center, hosting, office, conference and housing space.
Meanwhile, HavenCo said it is a viable business that expects to expand both its service offerings and customer base in the future. A HavenCo representative said the company “is as financially stable as any data center,” and pointed out that Lackey has had no information about the management of HavenCo since last year. “The information he presented was at best inaccurate and at worst completely misleading,” he said.
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