Internap Network Services (INAP) will expand its data center space in Silicon Valley and Houston, the company said today. The moves will help Internap continue a transition of its colocation footprint from partner facilities to company-controlled data center space.
Internap said it will add 27,000 square feet of new space in Silicon Valley, where the company operates four data centers in San Jose, Calif. The company will spend $23 million to build the new space in two phases, with the 14,000 square foot first phase scheduled to come online in the third quarter of 2010.
CEO Eric Cooney said the Silicon Valley market offers a "compelling opportunity for Internap" due to strong demand for space and an experienced local sales force.
Internap will spend $5 million to add 5,000 square feet of space in its existing data center in Houston, which is nearing capacity. The company also provided an update on the Seattle expansion announced in November. The first phase of 7,500 square feet will open for customers in the third quarter of 2010.
Internap said its move to focus on company-controlled colocation space has already helped its profit margin in its colocation business, which has improved from, 25 percent in the second quarter of 2008 to 30 percent in the fourth quarter. Seasonal variations in power pricing also helped the company's margins.
"Our data center value proposition is built on our ability to offer premium data center space and IP services," said Cooney. "We're well-equipped to compete, and our track record in company-controlled colo space reflects our capacity for growth."