Data centers rising to meet demand
Houston Business Journal - by Jennifer Darwin Houston Business Journal
CyrusOne opened for business this month, the latest in a string of new data centers that have popped up around Houston to take advantage of a growing demand for off-site information technology services.
As technology becomes more complicated and expensive, a number of Houston companies are moving more computer functions out of their offices and into hosted facilities. Data centers also are gaining in popularity because hiring and retaining skilled IT people has become such a challenge.
"This work force is so incredibly mobile that you can't keep any talent for any duration of time," says Joe Trahan, president of DNScorp. "What you do to solve the problem is you give it to somebody else, like one of these data centers."
DNScorp, a technology consulting firm, provides data center services from space leased inside various other data centers. Trahan says his firm is the outsourced IT department for LJM, Enron Corp.'s $1.4 billion mutual fund company.
"They decided they didn't want any part of that game," Trahan says of LJM. "They would have never kept any employees in there. The tech guys would have been bored in a minute."
The latest wave of new data centers provides a variety of services. In addition to hosting servers, routers and firewalls, they host Web applications and are often staffed with IT professionals who monitor equipment around the clock.
Data centers also provide security, backup and disaster recovery services. And several facilities have mirrored operations in other cities, as a back-up for mission critical applications.
But the jury is still out on whether these managed facilities will fare better than their cousin -- the telecom hotel. (See "Vacancy signs at telecom hotels" Feb. 16.) Also known as carrier hotels, these facilities offer custom-made infrastructure to telecommunications, Internet and data management companies, but the customers are simply co-locating their equipment in the facility and maintaining it themselves.
NEW TO MARKET
CyrusOne has built out 15,000 square feet of its enterprise data center at an Inner-Loop location not disclosed for security reasons. Officials say most of the 65,000-square-foot structure could be built out as demand warrants.
The data center has two sources of power, dual battery backups and two diesel generators to sustain power under any adverse condition. The facility also features a sophisticated network operating center, where CyrusOne employees can monitor all of their clients' equipment. That function is duplicated at a facility in Austin.
"The guts of our business is power," says David Ferdman, the CEO and president who lives in Austin. "We have two of everything. Everything is redundant."
Andy Bursten, CyrusOne's chairman, says suites are available for clients to rent so their own employees can monitor their equipment. But, he points out, that if that function is outsourced to CyrusOne, none of the clients' IT employees would ever get paged in the middle of the night to come fix a problem.
"We want those people to be able to go home at night and sleep, and not worry about their IT infrastructure," Bursten says.
CyrusOne is an Austin-based company, but the majority of the company's 38 employees are in Houston. The company was founded in July 2000 by Ferdman and Larry Bursten, a board member who lives in Houston.
The two men met several years ago when their companies were acquired by Austin-based IXC Communications, now Broadwing Communications.
Ferdman was co-founder and chief operating officer of Eclipse Telecommunications, a $100 million facilities based telecommunications service provider in Newport News, Va.
Bursten was co-founder and chairman of Coastal Telephone Co., a $100 million long distance service provider in Houston.
Solid Systems Inc. is another newcomer to the data center industry, but not to the field of technology. The company has been in the computer systems integration business for the past 18 years, posting $30 million in revenue last year.
Solid Systems -- founded by brothers Ken and Bill Cruise -- opened a 20,000-square-foot data center in Houston in May, and another 20,000-square-foot facility in Baton Rouge, La., the month before.
Tim Tindle, senior vice president of strategic planning, joined Solid Systems in November 2000 after the Cruises raised $20 million to launch their data center dream. Tindle was employee No. 8 at Compaq, and has 25 years of experience in the computer industry.
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