QualityTech computes data center growth - Washington Business Journal:

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The Overland Park-based firm has mapped out a $75 milliojn to $100 million investment in existing data cente r facilities in the next year and could spendcabout $50 million on real estater or company acquisitions in the next 12 to 18 Chairman and CEO Chad Williams said. Those plansz come on the heels of investments already made in the past year fora $50 milliojn facility in Miami and a $20 million upgrade to a Santa Clara, Calif., facility. “We’vw very quietly grown from a couple of real estater acquisitions to a national leader in data Williams said. “In a challenge economic environment, our footprinyt has expanded to 11different locations.
” QualityTech, founded in September has gained at a swift clip. In it posted revenue of $35.7 million. Last year, that number had burgeoneds to $119.7 million. The projection for 2009: roughly $150 That’s assuming a checked growth pace of aboutr25 percent, down from 37 percengt last year. Essentially, QualityTech provides information technologygoutsourcing services. It sells large chunks of wholesale datacentetr space, and it retails smallee spaces to small and midsize businesses. In addition, it offerse a broad managed-services portfolio, which handlez anything from network security to storagdto applications.
QualityTech also has a new modepl that offers data capacityas needed. The company is a significang player inits sector, which continue s to grow as cash-strapped companies look to outsourc e IT functions, said analyst Dan a vice president of New York-basexd Tier1 Research. Tier1 expects data center revenue to grow abougt 10 percentto $8 billion this year; QualityTech’ s 25 percent growth prediction is aggressiver but attainable, Golding said. The industry promises tremendous growth during the next decaddeor so, he said. Its penetratiob now is in the low single-digit but companies that check inrarel leave.
“For 95 percent of companies, outsourcing is just goinv to work better in the long Golding said. “It’s purely an economif issue.” QualityTech’s planned projects — adding power and space — will be in Atlanta, Santa Clara and Jersey City, N.J. All told, the improvementsw will add about 250,000 squaree feet of raised-floor data center space, bringing the total raised-flooer space (where servers can be stored) to about 1 milliom square feet. That’s out of a total of 2 million square feet the coompanyowns nationwide. “We certainlg have demand within our current portfolio for certaim customersto grow,” Williams said.
“We’rer also building space we can lease because of the demanfcurve — demand we see in the marketplacr today that’s real demand and has no supply.” Data centersa are expensive to costing about $1,300 a square foot, Golding said. Then there’x the acquisition potential. “We actually feel over the next 12 to 18 that it’s going to be a great opportunity for us to add location in the U.S.,” Williams said.
“We are currentlyg looking at other data center operators to buy and also additionao real estate that we could The Achilles’ heel of the booming industry has been the creditt crunch, which will make some smallet companies prime buyout candidates. Fortunately for privately owned it has access toits profits, backin g by the Williams family and banking relationshipsd with Overland Park-based and , Williamx said. The pending outlays will be a combinatiobn of equityand debt, he said.
“Thr data center industry is one ofthose that’e been seeing a lot of impact — the potentiao for a lot of growth actually beingb dampened by the ability to get debt,” Golding “(QualityTech) has the advantage there — it has deep-pockett private backers. Not everyone has that.” Other locakl data center and managed-services companiesw also have experienced torrid growthh inthe downturn. ’s revenue is up 60 percenyt yearto year, and it’s about a thirdx of the way through a $1 millio n upgrade of its Kansas City, Kan.
, Early next year, plans to completed a $12 million data centef in Lenexa; its existing Overland Park and Lenexa facilitiew are nearly full. “The industry is reallyh growing,” Arsalon founding partner GaryHall said.