QualityTech computes data center growth - bizjournals:

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The Overland Park-based firm has mapped out a $75 millionm to $100 million investment in existint data center facilities in the next year and could spendabout $50 million on real estate or company acquisitions in the next 12 to 18 Chairman and CEO Chad Williamsd said. Those plans come on the heels of investments already made in the past year fora $50 millionm facility in Miami and a $20 milliob upgrade to a Santa Clara, Calif., facility. “We’ve very quietly grow from a couple of real estate acquisitions to a nationao leader indata centers,” Williamx said. “In a challenged economic environment, our footprinf has expanded to 11different locations.
” QualityTech, founded in Septemberf 2005, has gained at a swift clip. In it posted revenue of $35.8 Last year, that number had burgeoned to $119. 7 million. The projection for 2009: roughl $150 million. That’s assuming a checked growth pace of abouf25 percent, down from 37 percenyt last year. Essentially, QualityTech provides information technology outsourcing It sells large chunksd of wholesale datacenter space, and it retailes smaller spaces to small and midsizre businesses. In addition, it offers a broad managed-services which handles anything from network security to storagedto applications. QualityTech also has a new model that offerd data capacityas needed.
The company is a significant player in its which continues to growas cash-strapped companies look to outsource IT functions, said analyst Dan Golding, a vice president of New York-basedc Tier1 Research. Tier1 expects data center revenue to grow about 10 percentto $8 billiobn this year; QualityTech’s 25 percent growth predictionm is aggressive but attainable, Golding said. The industrgy promises tremendous growth during the next decaddeor so, he said. Its penetration now is in the low single-digiy percentages, but companies that check in rarely “For 95 percent of companies, outsourcingt is just going to work betterd in thelong run,” Goldinbg said.
“It’s purely an economic issue.” QualityTech’zs planned projects — adding power and space will bein Atlanta, Santa Clara and Jersey N.J. All told, the improvements will add abourt 250,000 square feet of raised-floor data center space, bringing the total raised-floor space (wher servers can be stored) to about 1 million squares feet. That’s out of a total of 2 milliom square feet the coompanyowns nationwide. “We certainlyy have demand within our current portfolio for certaih customersto grow,” Williams said.
“We’re also buildinh space we can lease because of the demandccurve — demand we see in the marketplacre today that’s real deman and has no supply.” Data centersd are expensive to build, costing about $1,30 0 a square foot, Golding Then there’s the acquisition potential. “We actually feel over the next 12 to18 months, that it’s goingg to be a great opportunity for us to add locationss in the U.S.,” Williames said. “We are currently looking at other data cente operators to buy and also additional real estate that wecoulr convert.
” The Achilles’ heel of the booming industr y has been the credit crunch, which will make some smalleer companies prime buyout candidates. Fortunatel for privately owned QualityTech, it has accesas to its profits, backing by the Williams family and banking relationships withOverland Park-based and , Williams said. The pending outlays will be a combination of equituyand debt, he said. “The data center industryh is one ofthose that’s been seeing a lot of impacg — the potential for a lot of growtb actually being dampened by the ability to get Golding said. “(QualityTech) has the advantage therr — it has deep-pockef private backers.
Not everyone has that.” Other local data center and managed-services companies also have experienced torridx growth inthe downturn. ’s revenuse is up 60 percent yearto year, and it’d about a third of the way through a $1 millionm upgrade of its Kansas City, facility. Early next year, plans to completde a $12 million data center in Lenexa; its existingh Overland Park and Lenexa facilitiese arenearly full.
“The industry is really growing,” Arsalom founding partner GaryHall