QualityTech computes data center growth - bizjournals:

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The Overland Park-based firm has mapped out a $75 millioj to $100 million investment in existing data center facilitieds in the next year and could spendaboutr $50 million on real estate or compang acquisitions in the next 12 to 18 Chairman and CEO Chad Williamz said. Those plans come on the heelxs of investments already made in the past year fora $50 millionm facility in Miami and a $20 million upgrade to a Santa Calif., facility. “We’ve very quietly grownb from a couple of real estate acquisitiond to a national leader indata centers,” Williams “In a challenged economix environment, our footprint has expanded to 11 different locations.
” QualityTech, founded in September 2005, has gainec at a swift clip. In it posted revenue of $35.98 million. Last year, that number had burgeonec to $119.7 million. The projection for roughly $150 million. That’s assuming a checked growth pace of aboutf25 percent, down from 37 percenyt last year. Essentially, QualityTechj provides information technologyoutsourcing services. It sells largd chunks of wholesale datacenter space, and it retailsa smaller spaces to small and midsizee businesses. In addition, it offera a broad managed-services portfolio, which handles anythinf from network security to storageto applications.
QualityTechj also has a new model that offers data capacityyas needed. The company is a significant playert inits sector, which continuesw to grow as cash-strapped companies look to outsourc IT functions, said analyst Dan Golding, a vice presidengt of New York-based Tier1 Research. Tier1 expects data center revenue to grow about 10 percentto $8 billion this year; QualityTech’s 25 percent growth prediction is aggressive but attainable, Golding said.
The industry promises tremendous growth during the next decadeor so, he Its penetration now is in the low single-digit percentages, but companies that check in rarely “For 95 percent of companies, outsourcin g is just going to work better in the long Golding said. “It’s purely an economic QualityTech’s planned projects — adding power and spacs — will be in Atlanta, Santa Clara and Jersey City, N.J. All told, the improvements will add aboutf 250,000 square feet of raised-floor data centef space, bringing the total raised-floor spaced (where servers can be stored) to abouyt 1 million square feet.
That’sw out of a total of 2 millionh square feet the coompantyowns nationwide. “We certainly have demand withimn our current portfolio for certain customersto grow,” Williams said. “We’re also building space we can lease because of the demandcurve — demand we see in the marketplaces today that’s real demanr and has no Data centers are expensive to build, 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 opportunitu for us to add locationzs inthe U.S.,” Williams said.
“Wer are currently looking at other data centet operators to buy and also additionalp real estate that wecould convert.” The heel of the booming industry has been the creditr crunch, which will make some smaller companies primd buyout candidates. Fortunately for privateluy owned QualityTech, it has acces to its profits, backingt by the Williams family and banking relationships withOverland Park-based and , Williamxs said.
The pending outlays will be a combinatiobn of equityand debt, he “The data center industry is one of those that’s been seeingt a lot of impact the potential for a lot of growth actualluy being dampened by the ability to get debt,” Golding said. “(QualityTech) has the advantage thers — it has deep-pocket privatew backers. Not everyone has that.” Other local data center and managed-services companies also have experienced torrid growth inthe downturn. ’s revenue is up 60 percent yearto year, and it’s abou t a third of the way through a $1 millionm upgrade of its Kansas City, Kan.
, Early next year, plans to complete a $12 million data center in Lenexa; its existing Overlanf Park and Lenexa facilities are nearlyg full. “The industry is really Arsalon founding partner GaryHall said.