When the UK telecommunications market was opened up to competition in the early 1990s, an independent upstart decided it was time to enter the fray. By 1996, what was then known as "Colt Telecom" had become a listed entity on the London Stock Exchange mounting competition for the likes of BT and Cable & Wireless.

The Colt Technology Services that it has since evolved into is anything but a legacy voice telephony provider. According to CFO Mark Ferrari, the company now describes itself as an "information delivery platform".

"It would also be fair to say that our corporate story is not a fairy tale of linear progression, rather it is a journey of evolution. In over two decades of our existence, we have operated under a constantly evolving market dynamic to an extent that even though we began life as voice services provider – today voice services are just one of the solutions we provide."

Ferrari, a US national, took over the reins of Colt's finance function in 2011 at a seminal point in its progression. "Just as I was assuming office, we were reorganising ourselves into three client facing business units – Colt Enterprise Services, Colt Communication Services and Colt Data Centre Services. These were backed-up by infrastructure and business services sub-divisions."

The evolution

Having served on Colt's board as a non-executive director since 2009, the incoming finance boss was well geared up for the future and comfortable with his company's past. "Colt faced its own unique challenges in a nascent 1990s market. Our initial business was built at time when people were getting capital and being valued by how much they spent versus the actual dynamic of making money and generating cash-flow."

This resulted in too much communication capacity being delivered into a marketplace that was still finding its feet in a deregulated environment and getting to grips with fibre optics. Colt saw most alternative networks around it either go bankrupt or bought by larger players owing to financial distress. The company survived as an independent entity with the backing of Fidelity Investments and invested wisely in a changing landscape.

"If I look at our financials today and compare them with 2001 – our business has evolved from a two-thirds voice and one-third data business model, to one that's today two-thirds data and managed services and one-third voice. Furthermore, we've grown from a UK only business to become a pan European company. Our revenue mix has altered dramatically and I like that diversity."

Now a constituent of the FTSE 250, Colt reached its first year of positive cash-flow in 2005, with the first annual profit following in 2007. In 2012, it grew overall group revenue for the first time in seven financial years by 2.6% to €1.59 billion (£1.3 billion), reflecting growth across all major product streams. Even voice revenue, grew marginally, reversing a four-year long decline.

Ferrari sees much of his company's future revenue stream coming from growth in its data and managed services offering. "First and foremost, there is a huge [and growing] demand for fibre capacity. Secondly, you've also got an acceleration past peoples' expectations about outsourcing of IT functions, mainly in the financial industry.

"There are capital constraints on the balance sheets of financial services providers. As we enter an economic recovery phase, they need to deploy capital more effectively in core elements of their business. Since technology has advanced to a level where people are not afraid to put their virtual assets into somebody else's hands; IT outsourcing offers them savings."

Ferrari also points to a third phenomenon – the integration of IT with the wider corporate network. "As the IT compute [server usage] environment gets put out incrementally to service providers such as us, the interaction with that compute environment and how you get that data from the environment to where you need to get it, means network integration is becoming increasingly important."

Colt offers consumption models for both compute and for storage where you can 'buy as you use'. Optimising its assets to service this need is where Colt sees business growing. Those assets include data centres, last mile access to the buildings, city metro rings and long distance European infrastructure [connecting 39 cities in our case] give clients an integrated platform to run their IT function on.

The range of data storage facilities is delivered with differing characteristics in terms of latency, throughput, capacity and resilience. One of Colt's new shared storage platforms provides clients with "guaranteed performance" per tier, that is category of latency, throughput, capacity and resilience. It also provides the ability to move volumes between storage tiers, both up and down the performance stack, seamlessly with no interruption to business.

In order to mitigate risk of a power outage, Colt data centres source power via multiple routes from the National Grid. The supply is further protected by a UPS which is then backed-up by diesel electricity generators. Should all else fail, Colt also designs and operates back-up data centres with replicated infrastructure and storage facilities.

While this may add to cost and complexity, Ferrari says corporate clients accept nothing less in this data driven world. But which markets is Colt actively seeking these demanding clients in?

"Candidly speaking, we are branching out and following our customers! Asia is a potentially attractive market given the growth levels there relative to mature markets we operate in. In May 2011, we acquired majority shareholding in MarketPrizm; a provider of low latency market data and trading infrastructure services."

The acquisition has enabled Colt to set up hosting and content provision for equity and foreign currency trading desks for major exchanges in Hong Kong, Singapore and Tokyo.

"Additionally, we see the opportunity to continue to infill in Western Europe, while Eastern Europe is an obvious adjacent – albeit smaller – market. However, the US is probably a saturated market right now. Whichever market you look at, there is pricing pressure for sure. Inevitably, this can slow headline growth, but also spurs us on to innovate and come up with novel client solutions."

Socially responsible?

Despite a tough operating climate, the company has not lost sight of sustainability and social responsibility. Ferrari says Colt's business, which obviously involves chomping up copious amounts of power, cannot be packaged as anything but.

Colt is determined to change things – from reducing paper consumption (down by 35% over last two financial years) and recycling hardware, to a corporate social responsibility programme which we started in 2009. The programme has seen us deploy equipment which is 75% more energy efficient and virtualise our entire internal server environment saving 1.5GWH of energy in the process.

All of this has resulted in Colt becoming one of the few companies of its kind to be admitted to FTSE4Good group. But Ferrari, who once ran an oil and gas platform for Fidelity Investments, also says there is a lot of rhetoric and hyperbole around.

"One man's clean energy is another's wasteful subsidy, I call it 'biomass', you call it chopping trees down and burning wood pellets. We all draw our own conclusions from facts presented to us or what's presented 'packaged as facts'. I would say peers within the FTSE 250 and us at Colt are generally doing the right things."

Like every CFO, Ferrari worries about talent retention or retrenchment given the demands of a technology driven business. "If you looked at Colt, our tenure of employment for employees is fairly impressive. Many of our talented people have been here for 10 to 15 years. While we deploy a lot of technology in our business, ultimately it's the 'can do' attitude of the people and their dedication that's vital.

"The difficultly arises when technology changes and the skill set balance needs to change as well. Sometimes the pace at which this happens, means you can't develop or cross-train people, and a change of personnel is needed. Additionally, our industry is plagued by declining pricing on a recurring business which means if you want to maintain profitability you have to consistently look at lowering costs. Colt's goal is not to cut employees, but should that happen we try to do it in a way that people understand it."

Open to ideas

At Colt, Ferrari finds himself reconciling the iron disciple he gained as a public accounting and audit practitioner early on in his career, with a general receptiveness to new ideas gained in later stages of his professional journey.

"I am a CFO who welcomes fresh business ideas even if they're not backed-up by numbers; that's not to say I'll close my eyes and sign them off. However, for me business success comes from being receptive to new ideas and holding an open debate about return on investment. It's important for a business to recognise that no one person has all the answers and no single individual is wrong just because an idea did not take off."

The modern boardroom should welcome ideas from bottom up, says the Colt finance chief. "I have served on boards where meetings were sometimes scripted in what each C-suite executive would say. The discussion followed a practised drill – a presentation, few questions, the odd statement with a conclusion already reached and you moved on.

"Colt's board is worlds apart with an open and 'formal/informal' way of operating. We're in a tough industry, we're changing the business – so there is a lot of open dialogue about choices and opportunities we have. The board gives input, as well as its approval or disapproval of decisions.

"Since we compete not only on the quality of our assets, but also on the quality of our service, we treat customer service very seriously, to the point that client satisfaction levels are tied-in to corporate bonuses and executive compensation."

Specifically on the finance function, Ferrari likes what he calls accountants with business nous. "I keeping reading 'CFOs, FDs, FCs should be business partners and in a way that grates on me. I see it as a fundamental part of finance and calling out of such a concept as new by some management gurus is foreign to me. The days when finance professionals pushed numbers, didn't truly understand the business and merely reported figures have long gone."

The Colt CFO has been trying to build a finance team that is adept at forecasting, getting costs in line, providing information around growth opportunities and devising business models to accrue more revenue, by dropping prices to a point yet still retain profitability."

"So for me, it's about fundamentally understanding the cost behind every element of the business. The traditional compliance, accounting and reporting requirements are close to mere perfunctory. I think a finance chief's main role is to make people business savvy regardless of their technical skill set, and to match different technical skill sets together so that there is collective improvement in the business' bottom line. That's certainly my number one priority as a CFO."