Sealand: Taking Offshore Hosting to a New Level

The Whir:

Sealand: Taking “Offshore Hosting” to A New LevelBy Adam Eisner,

July 10, 2001 — When people think of hosting their data offshore, the first place that often comes to mind is the Caribbean. After all, the sunny countries to the south are warm, close to the United States and typically feature lax policies related to business and privacy.Moving your servers to the Caribbean doesn’t put you above the law, though. Enter HavenCo, a private firm backed by a number of Internet executives with extensive backgrounds in network infrastructure, security and E-commerce. HavenCo’s goal is to establish the world’s first true offshore “data haven” seven miles from land and in the middle of international waters.To do this, HavenCo has teamed up with the Principality of Sealand, the self-proclaimed “world’s smallest sovereign territory.” Sealand is a 6,000 square-foot gun tower in the middle of Europe’s North Sea, seven miles from Britain’s mainland. The structure was originally built In World War II  to shoot down German planes. The Allies abandoned the tower after the war, and it stayed unoccupied until 1967 when retired British war veteran Roy Bates landed on the structure, named it “Sealand” and declared himself Prince. His son Michael was named heir apparent, and currently serves as HavenCo’s Chief Logistics Officer. His wife, Joan, was named Princess.The tiny nation has had a short, eventful history that features an invasion, run-ins with the British government regarding Sealand’s supposed independence, and a slew of often sensational coverage. While the British and American governments officially maintain a policy of “non-recognition”, they haven’t actively tried to force the Principality to adhere to Britain’s laws. HavenCo felt there was an opportunity to use Sealand’s unique situation by offering hosting services to organizations who didn’t want their data tampered with by governments, law enforcement officials or any other agency. Sealand seemed to agree, and in May of 2000 HavenCo began offering what it calls “the world’s most secure managed servers in the world’s only true free market environment.”Whether Sealand is really the world’s only true free market environment is an oft-discussed topic with no definite answer. While Sealand was originally located outside British territorial boundaries, Britain extended its territorial water to 12 nautical miles in 1987, thereby encompassing Sealand. To date, however, the issue has not been formally challenged, although it is widely believed Sealand would not be able to withstand a concentrated effort by the British government to shut Sealand down should it ever decide to do so. HavenCo currently provides what it calls “managed co-location services”: a Web hosting service that uses facilities and equipment based in Sealand, but leaves most administrative duties to the client. HavenCo takes care of issues related to the physical location of Sealand (like actually mounting a server on a rack), and the user takes care of the rest. “The few things that only we can do because of our physical location we’ll do, and we’ll do it well,” says Ryan Lackey, a former MIT student who now serves as HavenCo’s Chief Technical Officer. “It’s about as close to a neutral co-location facility as you can get.”The idea must have been a good one, because the premise has attracted the attention of numerous high-profile backers, including Avi Freedman, VP of Network Architecture for Akamai, and Sameer Parekh, founder of C2NetSoftware, Inc. Lackey says the idea came about after he and a number of associates tried to locate some potential venues for offshore servers. After coming across Sealand, he realized offshore hosting could actually be a solid business idea as well. “It turned out that it was a better company idea because it’s a simple revenue model,” he says.  And it was a model the company used to quietly turn a profit in a mere 12 months.Users can purchase single-server packages for as little as $750 (U.S.) a month, which gets them a dedicated server running an industry-standard OS like Linux , Windows or even a Mac. Servers are connected to a high-speed wireless network backed up with a satellite service. Of course, as a potential hosting client your first question will likely be: why should I put my servers in Sealand instead of downtown London? After all, locating your servers in Sealand means your machine will be without a direct fiber connection to the Internet. One reason is physical protection: Sealand itself, a former military installation, is protected with firearms, and HavenCo’s servers protected by tamper-resistant hardware and cryptography. The other reason people choose Sealand is freedom. Sealand doesn’t have any provisions regarding the government of traffic data, and has entered in to an agreement with HavenCo that says they never will. So long as a customer abides by the company’s Acceptable Use Policy, which is designed to prevent illegal sites like child pornography and spam, clients are free to host whatever they like. So far, most of HavenCo’s clients are finance sites and online casinos, the latter being frowned upon throughout most of the United States. “We’re supporting offshore gambling, and nobody cares about gambling,” Lackey says. “In the U.K., gambling is actually pretty cool.”Lackey says HavenCo has given thought to expanding its line of Web hosting services, including offering lower-end services like virtual hosting packages. So far, however, it has nixed the idea because of the staff requirements involved – but Lackey says that doesn’t necessarily mean virtual hosting is not in the cards for HavenCo. “The problem is for us the support costs would be high,” he says. “What we would like to do is find a regular hosting company and sell them a rack… and resell their service.”One thing that is definitely in store for Lackey is some time off in the near future, as his technical expertise means he’s often stuck on Sealand for up to three months at a time (most everyone else spends two weeks at Sealand and two weeks ashore in Britain). Living on Sealand, however, does have its advantages. “It’s cheap, my food when I’m there is free and my housing when I’m there is free,” he says. And besides, “I have no apartment anywhere else in the world.”


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