Interview with Ron Berry – e-business expert in the Isle of Man
By: John Gregory
06 April 2011
What have been the biggest growth areas in
e-business over the past few years?
Without a doubt e-gaming has been the leading light of the sector in terms of growth and in terms of enquiries that we have had into the Isle of Man from e-gaming companies.
The white list was obviously a very important part of putting the Isle of Man on the map.
I think when people were looking to e-gaming businesses and setting up e-gaming businesses we were fortunate in the respect that because of the white listing the Isle of Man was already on the radar.
Supporting that white listing is the infrastructure of the Island in terms of its very robust and first class telecommunications network.
That’s very important from an e-gaming perspective because obviously they don’t want breaks in their continuity of service, it can end up being quite a costly exercise for them.
The telecoms backbone has been one of the attractions along with the regulating environment, the speed of licensing and the real thorough regulatory environment that the Isle of Man has set up within this sector and really looking towards having e-gaming business here that is long term.
Has e-business grown as predicted?
We are very fortunate really on the Isle of Man in that it is in many ways an easy place to do business, especially if you are looking at e-business.
e-business is not necessarily restricted by any boundaries, it is a sector or an industry or group of industries that transcends those boundaries because it is a global reach from one location, so effectively you can be anywhere.
In e-business in general there are those certain common denominators that anyone would look for – that’s the infrastructure, that’s the environment, that’s how the support structure fits around what you are trying to do, so in another words what are your data hosting centres like, what are your support industries like in terms of what is your IT skills base like. We tick a lot of boxes when it comes to the Isle of Man.
When you couple that with one of the most tax efficient environments in the world it makes for a very compelling and attractive proposition.
A lot of the major companies who operate in an e-business environment, people like Google, Microsoft and Facebook, those companies that have really grown exponentially are sort of set in their own environment for one reason or another.
It is very hard to get to those companies and say to them “relocate to the Isle of Man”.
But it’s somewhat easier to get to those start up businesses and those medium sized businesses that are thinking about their next stage of growth.
That’s the kind of business we have been attracting to the Island in an e-business environment. It’s taking it to the next level and really choosing an area that is right for business development.
I think the economic climate and credit crunch and how things have changed and cut backs makes for a situation where people have to think outside the box and really do have to look for business friendly environments and with the formation of the Department of Economic Development I think the Island is moving in the direction of being able to offer that to e-business companies.
Because the Isle of Man is such a well regulated and business friendly environment do we have an advantage in spite of the worldwide economic crisis?
Most definitely. The Island has always been, for as long as I can remember, able to have been very fleet of foot in terms of being able to be proactive but also react to situations that may cause barriers to business. I have always been, from day one, a real advocate of public-private sector partnerships. That in many ways to me is the way to grow your economy.
I have found over the last three years I have been in the post that to people who come into the Island that is a real attraction to them, they see there is a willingness to do business here and that open door policy into government and into the various divisions and departments of government - places like customs, tax department, the way that the government grant system can assist them to grow their businesses here - they do find that a very refreshing change from what they might see in other areas of the world and long may that continue.
The public private sector partnership is a very important one.
This department works very closely with the Chamber of Commerce. They have moved into a new location with the Business Incubator, which fulfills a very important part of that relocation process. They generally walk away very comforted and with a positive attitude.
Aside from e-gaming how have other areas of e-business grown?
Disaster recovery has grown in terms of the companies that are hosting here for one reason or another. There are different levels of disaster recovery that the various operators offer.
It is all about the Isle of Man as a location. We are a safe location.
People’s reliance on electronic systems to do business means more and more people are waking up to the fact they need a location to host their content. The Island’s geographic position helps us with that process and the fact we are an hour away from London, half an hour away from the north of England. It is a safe environment, a stable government, the longest continuous parliament in the world – all of those things tick boxes when it comes to DR.
Online travel has grown and grown. The early entrants to the market – the Expedias and people like that have established themselves very well in the market and we have had some success in those areas. We have worked with a local company and we have relocated a couple of businesses that deal in e-travel in terms of hotel bookers.
The music industry has been a very interesting one indeed. Over two years ago now we looked at the music industry and we looked at what was happening in the industry and how digital sales were increasing, physical sales were decreasing and piracy was rife. 95 per cent of music that was consumed online in 2009 was not monitised. Five per cent was and that generated an income of $3.7bn
You can see piracy has been a big issue to the record industry.
We went along and said look “we want to work with the record industry to be able to try and find a solution for this” and that’s where we came up with the concept of using a blanket licence and a flat rate free and charging a nominal sum through the ISP which is very scalable.
Traditionally the music industry is run by four major companies and you have the independents and they are used to an industry that has made them a lot of money in the past.
They have not been as quick to change and as quick to embrace digital as they might have been and the world is changing.
We have been working very closely with the industry itself, particularly one group, called VRS, Value Recognition Strategy and what they were looking to do was represented by all of the major companies and the independents. They said “what can we use the Isle of Man for” and we said “we can be a digital sandbox for you to play in you can trail various things” and that was broadly accepted.
The difficulty of getting all those people to agree to do something has been a mammoth task. We have made inroads – we certainly gave a lot of profile to the Isle of Man all the way up to the top of the food chain,
Now you are finding streaming services that are coming on board. There is a handful of them, they are growing. iTunes are cornering the market in terms of downloads but their business model will be eroded as time goes on.
I think one of the major sea changes with regards to digital has been the concept of cloud computing and content. We are seeing a revolution now which is quite interesting. That revolution takes two pieces of equipment that sit in most homes – the television and computer – and we are seeing a convergence of those two pieces of equipment.
That effectively gives the user the ability to watch what they want when they want to watch it.
Broadband delivery of content is where we are at, it is the next generation, that revolution will grow and grow and grow. Why do you need to own anything, why do you need to have a cupboard full of CDs or DVDs when you can draw that down from the cloud when you want to use it?
The transition into mobile as well makes for a very interesting development within the market.
That’s where we need to be heading. And that’s where we need to be heading as a business proposition to be able to offer those services.
Content is king and I think the Isle of Man can play a very important part in that because of our infrastructure and I am quite excited about the future of where that is going to go.