LATISYS DEN2

Density, Diverse Services Drive Growth at Latisys

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View from above of a new Latisys data center in Denver.

As a data center service provider, Latisys has been on a journey in which it has expanded across the country and up the value chain. In 2013, it has arrived as an end-to-end provider of IT outsourcing, complete with a national footprint and a portfolio of high-end customers.

The offerings from Latisys span every aspect of the infrastructure stack, from colocation to managed services to managed hosting and cloud, delivered in high, density data centers with a high-touch, hybrid model.

The company now offers more than 350,000 square feet of data center capacity across four markets, and nearly everything they do is high density. “We saw early on that power densities would continue to change the dynamic,” said Jonathan Sharp, VP of Marketing for Latisys. “We invested so customers could go up, not out.”

Latisys uses a unified platform running atop enterprise equipment: Servers and blades from HP, storage from HP 3PAR storage, and networking gear from Juniper Networks, Palo Alto and F5. The company also offers different Quality of Service levels: One for testing and development, one for high performance infrastructure, and one intermediate QoS level.

Service Variety Boosts Cross-Selling

The company believes that it isn’t just about offering multiple services, but offering the right services in the right circumstances. Latisys emphasizes a high-touch approach to customer service, combined with building on a uniform platform. “Many providers built a separate (cloud) platform,” said Sharp. “For us cloud is an extension of managed hosting. We are utilizing the same back end. That standardization is very important.”

Latisys says it is benefiting from cross selling of its offerings. One managed hosting  customer turned into a colocation customer, and many colo customers are becoming managed services and cloud customers. Its high touch approach means that there isn’t always a standard setup, but rather very personalized configurations unique to a businesses needs.

In colocation, “we’re seeing a trend away from server hugging,” said Sharp. “I think you used to take a colocation customer, and 50 mile radius would be it. Now companies are getting more comfortable with 150 to 250 miles (between the customer office and the data center). It is just one element of what a customer looks at. We have plenty of colocation customers that are physically located farther away.”

Growth Through Acquisition

Latisys was founded in June of 2007 under the name Managed Data Holdings by three experienced industry executives – CEO Pete Stevenson, CFO Doug Butler and COO Evans Mullan – in conjunction with Great Hill Partners and Catalyst Investors. So out of the gate, it had experience and funding.  Latisys’ facilities have completed SOC 2 Type II and SOC 3 Audit Reports and are located in Irvine, Calif. (formerly InteleNet), Denver, Colo. (formerly Data393), Chicago (formerly Stargate).  The company recently expanded into the northern Virginia market with a 123,000 square foot data center campus in Ashburn, Va. (formerly Pryme Technologies).

So what’s the next act? “The answer today is all of the above,” said Sharp. “It’s not hybrid cloud, it’s hybrid IaaS – (customers) want it to be seamlessly federated, and the ability to work with vendors in that hybrid (configuration).”

Latisys is finding that many customers come to them wanting cloud, but aren’t exactly certain why. “You’d be amazed at how often the client comes to us and says we want to be on cloud, ” said Sharp.“You’ll spend more on the cloud if you put your non-burstable workloads on cloud.”

For Latisys, the answer is focusing on a company’s larger IT strategy, which is often undergoing a change. “The differentiator is that when people decide to adopt new services, you need to ensure they have the same performance they had internally,” Christian Teeft, VP of Engineering for Latisys. “We sit down with them; we try and solve their problems. We want to understand what they’re trying to do.”

The company has more than 1,100 customers, with some public examples being Opera Software, PDC Energy, eDocument Solutions, Printronix, PhoenixNAP, BlueCava, Horizon Technology and Photobucket. Latisys customer base is surprisingly diverse. “We don’t see verticals are driving that growth at all,” said Sharp. “In healthcare, IT, we have a bit of concentration . (But) we don’t have a single vertical that represents more than 5 to 6 percent (of revenue).”

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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