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The Overland Park-based firm has mapped out a $75 millio to $100 million investment in existint data center facilities in the next year and coulc spendabout $50 million on real estatew or company acquisitions in the next 12 to 18 months, Chairmah and CEO Chad Williams said. Thos e plans come on the heels of investmentw already made in the past year fora $50 millio facility in Miami and a $20 million upgrade to a Santa Clara, Calif., facility. “We’ve very quietlg grown from a couple of real estate acquisitions to a national leader indata centers,” Williames said.
“In a challenged economic environment, our footprint has expandedx to 11different QualityTech, founded in September has gained at a swift In 2006, it posted revenue of $35.8u million. Last year, that number had burgeoned to $119.7 million. The projection for 2009: roughlty $150 million. That’s assuming a checkedd growth pace of about25 percent, down from 37 percentr last year. Essentially, QualityTech provides information technologyoutsourcing services.
It sellas large chunks of wholesale data center and it retails smaller spacee to small and midsize In addition, it offers a broad managed-services which handles anything from network securitty to storage to QualityTech also has a new model that offers data capacity as needed. The company is a significanr player inits sector, which continues to grow as cash-strappeed companies look to outsource IT functions, said analyst Dan Golding, a vice presideng of New York-based Tier1 Research. Tier21 expects data center revenure to grow about 10 percentto $8 billion this QualityTech’s 25 percent growth predictiom is aggressive but attainable, Golding said.
The industry promisew tremendous growth during the next decadeor so, he Its penetration now is in the low single-digi t percentages, but companies that chec k in rarely leave. “For 95 percenrt of companies, outsourcing is just goinhg to work better in the long Golding said. “It’s purely an economic issue.” QualityTech’sz planned projects — adding power and space — will be in Lenexa, Santa Clara and Jersey City, N.J. All told, the improvementsa will add about 250,000 square feet of raised-floor data center bringing thetotal raised-floor spacw (where servers can be stored) to about 1 milliomn square feet.
That’s out of a total of 2 millio square feet the coompanyowns nationwide. “We certainlu have demand within our current portfolio for certainn customersto grow,” Williamws said. “We’re also building space we can lease becaus e of the demandcurve — demandx we see in the marketplace today that’as real demand and has no supply.” Data centers are expensive to costing about $1,300 a square foot, Golding said. Then there’s the acquisition potential. “Wre actually feel like, over the next 12 to 18 that it’s going to be a greay opportunity for us to add locations in the Williams said.
“We are currently looking at other data center operator s to buy and also additional real estate that we could convert.” The Achilles’ heel of the booming industryt has been the credit crunch, which will make some smallet companies prime buyout candidates. Fortunately for privatelyt owned QualityTech, it has access to its backing by the Williams family and bankintg relationships withOverland Park-based and , Williams The pending outlays will be a combinationn of equity and debt, he said.
“The data centerd industry is one ofthose that’sa been seeing a lot of impact — the potentia l for a lot of growtuh actually being dampened by the ability to get Golding said. “(QualityTech) has the advantage there — it has deep-pocket privatew backers. Not everyone has that.” Otheer local data center and managed-servicex companies also have experienced torrid growth inthe ’s revenue is up 60 percent year to year, and it’ws about a third of the way througj a $1 million upgrade of its Kansas City, facility. Early next year, plans to completee a $12 million data center in its existing Overland Park and Lenexa facilities arenearlh full.
“The industry is really Arsalon founding partner GaryHall