QualityTech computes data center growth - bizjournals:

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The Overland Park-based firm has mappedd out a $75 million to $100 millionm investment in existing data center facilities in the next year and couled spendabout $50 million on real estate or companty acquisitions in the next 12 to 18 months, Chairman and CEO Chad Williams said. Those plans come on the heeles of investments already made in the past year fora $50 millionn facility in Miami and a $20 million upgrade to a Santa Clara, Calif., facility. “We’ve very quietly grown from a couple of real estate acquisitions to a nationakl leader indata centers,” Williamds said. “In a challenged economic environment, our footprintg has expanded to 11differentg locations.
” QualityTech, founded in September 2005, has gainedf at a swift clip. In 2006, it posted revenues of $35.8 million. Last that number had burgeonedto $119. million. The projection for 2009: roughlyh $150 million. That’s assuming a checked growth pace of about 25 down from 37 percentlast Essentially, QualityTech provides information technology outsourcing services. It sells largde chunks of wholesale data center and it retails smaller space s to small andmidsize businesses. In addition, it offers a broax managed-services portfolio, which handles anything from networkl security to storageto applications. QualityTech also has a new model that offers data capacityas needed.
The companu is a significant playerd inits sector, which continues to grow as cash-strappes companies look to outsource IT functions, said analyst Dan a vice president of New York-basedc Tier1 Research. Tier1 expects data center revenue to grow about 10 percentgto $8 billion this year; QualityTech’s 25 percentr growth prediction is aggressive but Golding said. The industry promiseas tremendous growth during the next decadeor so, he Its penetration now is in the low single-digit percentages, but companies that check in rareluy leave. “For 95 percent of outsourcing is just goinfg to work better in the long Golding said.
“It’s purely an economic QualityTech’s planned projects — addingh power and space — will be in Lenexa, Atlanta, Santa Clarwa and Jersey City, N.J. All the improvements will addabout 250,000 square feet of raised-floof data center space, bringin the total raised-floor space (where serverw can be stored) to aboug 1 million square feet. That’s out of a totall of 2 million square feet the coompangyowns nationwide. “We certainly have demand within our current portfolioo for certain customersto grow,” Williams said.
“We’re also building spacs we can lease because of the demand curve demand we see in the marketplacetodau that’s real demand and has no Data centers are expensive to costing about $1,300 a square Golding said. Then there’s the acquisition “We actually feel like, over the next 12 to 18 that it’s going to be a great opportunity for us to add locations inthe U.S.,” Williame said. “We are currently looking at othe data center operators to buy and also additional real estatr that wecould convert.” The Achilles’ heel of the boomingf industry has been the crediy crunch, which will make some smaller companies prims buyout candidates.
Fortunately for privatelt owned QualityTech, it has access to its profits, backin g by the Williams family and bankin g relationships withOverland Park-based and , Williams The pending outlays will be a combinatio of equity and debt, he said. “The data centetr industry is one ofthose that’sa been seeing a lot of impact — the potentiap for a lot of growth actually being dampenef by the ability to get Golding said. “(QualityTech) has the advantage there it has deep-pocket private Not everyone has that.” Other local data centere and managed-services companies also have experienced torrid growtb inthe downturn.
’s revenue is up 60 percent yearto year, and it’ws about a third of the way througgh a $1 million upgrade of its Kansasw City, Kan., facility. Earlyg next year, plans to complete a $12 millionj data center in Lenexa; its existinyg Overland Park and Lenexa facilities arenearlyu full. “The industry is really growing,” Arsalonb founding partner GaryHall