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The San Diego Union Tribune’s Q&A with Jerry Morris

Q&A: Jerry Morris; general manager of NextLevel Internet

Jerry Morris, 36, of Rancho Santa Fe is the general manager of NextLevel Internet, a privately owned Internet and managed data services provider.

Morris, who grew up in Escondido, founded the San Diego-based company in 1999. Current clients include the national call center for the American Red Cross, Palomar Pomerado Health, Gold Hour Data in Solana Beach and the Poway Unified School District.

NextLevel Internet’s data center is in Kearny Mesa. It is called a co-location facility because it provides a secure location where clients can store and back up their business information.

NextLevel Internet employs 10 people. Morris says revenues were $3 million to $4 million in 2005, and he’s expecting a 30 percent increase this year.

Do you provide Internet service to a particular industry?

As an ISP (Internet service provider) company, we focus on businesses that are going to lose money, reputation or life if their Internet is down. The company has to value and appreciate extremely high uptime and also might need to expand quickly. We work with the medical industry, the financial industry and a few others. What we do is go from a one-lane highway to a 1,000-lane highway immediately. And that highway is always open, always on, without interruption and very closely watched. This is important for the medical industry to do business, but it can be critical for other industries, too.

What is co-location, and why is it important for companies to have?

A co-location facility is a place where you could take your server and place it where you have redundant generators, redundant power, a very large amount of bandwidth, and it keeps companies from having to upgrade their own facilities. It’s important to help companies comply with government-mandated audits like HIPAA (federal medical privacy law), Sarbanes-Oxley (Act of 2002, federal legislation tightening regulation of public companies) and SAS70 (auditing standards), all of which frequently require secure locations for a company’s data. The other option instead of leasing the space from us would be for companies to build it out themselves, but that could cost millions of dollars.

Can you explain how your data center is a secure location?

Most people think of Internet security as firewalls or virus protection, but you won’t necessarily hear about the importance of physical security. That’s what our data center is all about. We take into account things like using a building with no windows and non-existent signage. It should be outside of any major earthquake areas and not in a multi-level building. There’s also biometric scanning, which for us is palm scanning. We also use video surveillance, and probably most important is to incorporate redundancy. That means multiple pipes are coming in to make multiple connections. If one connection fails, the backups will take over.

Who are your major competitors?

AT&T, MCI, Qwest, Time Warner Cable and Cox. The difference between the bigger companies and us is that we’re not driven by Wall Street and we’re not driven by venture capitalists telling us how to run the business. Each client we have gets individualized service. We assign an account rep and two engineers for every account, and the proprietary software that we’ve created can deliver this individual service and we can scale it to fit a client’s needs. We’re more mission-critical, and we have an all-engineer help desk that looks out for the health of the network, and we proactively look for and fix any discrepancies. Our churn rate is one-seventh of the industry average, so we don’t lose our clients.

What’s in store for the future of the company?

Disaster recovery and backup storage is our future. Right now we’re looking at opening up a Phoenix office as a disaster recovery site for Southern California businesses. That would allow us to offer our clients an offsite location for them to do their data backup that would be out of the earthquake zone. Between the scandals like Enron and the disasters like 9/11, the tsunami and Katrina, Sarbanes-Oxley was created to ensure that folks have secure data and information. Is the issue hot right now because of all of the recent disasters and scandals? It doesn’t hurt.

– Melanie Stevens

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