Colocation provider 365 Main says it has space available in its flagship data center in San Francisco for the first time since late 2006. The new capacity is a result of several large customers "graduating" to the company's new facility across the bay in Oakland, and energy savings created by server consolidations by several customers.
San Francisco has historically been one of the strongest markets for colocation space, according to 365 Main VP of marketing Miles Kelly. "We're in deep conversations with existing customers to take some of that capacity," said Kelly. "We expect it to go quickly. San Francisco is a tight data center market."
Two large customers have relocated to 365 Main's Oakland data center, which opened in early 2007 and has more than 80,000 square feet of raised-floor technical space. Kelly wouldn't say which customers, but previous announcements identify blog hosting provider Six Apart and social network Hi5 as customers that have migrated from San Francisco to Oakland.
Those migrations took place some months ago. But data center capacity is guided by power as well as space, and the recent consolidations have freed up power capacity for additional customers. 365 Main has encouraged its San Francisco customers to take advantage of incentives from PG&E that offer up to $200 per server for consolidations that lower overall server counts. Kelly said one of the customers has reduced its total power usage by 20 percent.
"Usually what tenants will do when they save space (through a consolidation) is consider it additional headroom to fail before they grow and have to look for a new facility," said Kelly.
Kelly said the space available at the San Francisco data center wasn't a sign of weakening demand in the local colocation market, noting recent projections from Tier 1 Research. In a November report, Tier 1 predicted that colocation demand in Silicon Valley and the Bay Area will continue to outpace supply, boosting data center utilization from the current 70 percent to 95 percent by 2012.
"The demand side of the equation continues to be healthy," said Kelly. "Our executives were part of the first Internet building boom in the 1990s. What we found is that in tight times, an investment in technology is an investment in productivity."
The San Francisco facility was the first data center for 365 Main, which bought the building from AboveNet in a Chapter 11 sale. Its business model also differs from the rest of 365 Main's portfolio, which includes properties in El Segundo, Calif.; Chandler, Ariz.; and Chantilly, Va. in addition to San Francisco and Oakland.
"365 Main has always been a traditional colo model in San Francisco, where you can lease a a half-rack or a rack or server," said Kelly. "A cage was really the upper extent for most customers here. Every other facility in our portfolio is a wholesale colocation model, where we lease 2,000 to 25,000 square feet of space. That's why in San Francisco, we have 200 customers in the facility, where we have just eight in an equal amount of space in El Segundo."