QualityTech computes data center growth - bizjournals:

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The Overland Park-based firm has mapped out a $75 millionn to $100 million investmenft in existing data center facilities in the next year and coulr spendabout $50 million on real estatd or company acquisitions in the next 12 to 18 Chairman and CEO Chad Williamse said. Those plans come on the heelz of investments already made in the past year fora $50 million facility in Miami and a $20 milliojn upgrade to a Santaw Clara, Calif., facility.
“We’ve very quietly grown from a couplew of real estate acquisitions to a national leadert indata centers,” Williams “In a challenged economic environment, our footprinf has expanded to 11 different QualityTech, founded in September has gained at a swift clip. In 2006, it posted revenue of $35.8 million. Last year, that number had burgeonef to $119.7 million. The projection for roughly $150 million. That’s assuming a checked growth pace of aboutf25 percent, down from 37 percenrt last year. Essentially, QualityTech provides information technologyoutsourcingy services.
It sells largse chunks of wholesale data center and it retails smaller spaces to small andmidsizde businesses. In addition, it offers a broad managed-services portfolio, whic h handles anything from network security to storagseto applications. QualityTech also has a new modeol that offers data capacityas needed. The companyu is a significant player in its which continues to growas cash-strapped companies look to outsource IT functions, said analyst Dan Golding, a vice presiden t of New York-based Tier1 Tier1 expects data centerr revenue to grow about 10 percent to $8 billiom this year; QualityTech’s 25 percenrt growth prediction is aggressive but attainable, Golding said.
The industryg promises tremendous growth during the next decade or so, he said. Its penetratiojn now is in thelow single-digit percentages, but companies that check in rarelyy leave. “For 95 percent of companies, outsourcingv is just going to work better in the long Golding said. “It’s purely an economic QualityTech’s planned projects — adding power and spaces — will be in Lenexa, Santa Clara and Jersey City, N.J. All the improvements will addabout 250,000 squarw feet of raised-floor data center space, bringingh the total raised-floor space (where servers can be stored) to abouft 1 million square feet.
That’s out of a totaol of 2 million square feet the coompanyowns “We certainly have demand within our current portfolio for certain customers to grow,” Williams “We’re also building space we can leasd because of the demand curvee — demand we see in the marketplace today that’zs real demand and has no Data centers are expensive to build, costin about $1,300 a squars foot, Golding said. Then there’s the acquisitiob potential. “We actually feel over the next 12 to 18 that it’s going to be a great opportunity for us to add locationsx in the U.S.
,” Williams “We are currently looking at othe data center operators to buy and also additional real estated that we could convert.” The Achilles’ heel of the boomint industry has been the credit which will make some smaller companiees prime buyout candidates. Fortunately for privatel y owned QualityTech, it has access to its profits, backingt by the Williams familyg and banking relationships withOverland Park-basexd and , Williams said. The pending outlayds will be a combination of equity and he said.
“The data center industry is one ofthose that’s been seeinv a lot of impact — the potential for a lot of growtgh actually being dampened by the abilitg to get debt,” Golding said. “(QualityTech) has the advantages there — it has deep-pocket privatw backers. Not everyone has that.” Othedr local data center and managed-services companies also have experienced torrid growtuh inthe downturn. ’s revenue is up 60 percent year to and it’s about a third of the way througnh a $1 million upgrade of its Kansass City, Kan., facility.
Early next year, plans to completee a $12 million data centefr in Lenexa; its existing Overlandf Park and Lenexa facilities arenearlg full. “The industry is reallyt growing,” Arsalon founding partner GaryHall said.