Hosted Solutions started life as a local provider focused on the Research Triangle area of North Carolina, with headquarters in Cary and a data center in Raleigh. The company expanded into Boston in 2006, and in 2009 was acquired by ABRY Partners, which invested in upgrades for five data centers located along the East Coast. Hosted Solutions is based in Raleigh, N.C., and has more than 600 customers and has approximately 125 employees

Deal Will ‘Transform’ Windstream
Windstream said the acquisition of Hosted Solutions will “transform” its data center business, adding data centers in Raleigh, Charlotte and Boston with a total of 68,000 square feet of data center capacity. That gives Windstream a combined total of 12 data centers across the country.

“Data center space is increasingly in demand among our existing business customers,” said Jeff Gardner, president and chief executive officer of Windstream. “Hosted Solutions is an excellent complement to our existing enterprise service portfolio. For the past decade, they have been delivering highly complex managed hosting solutions to customers of various sizes. In addition, they have a proven track record of growing revenue and generating significant free cash flow.”

Windstream expects to finance the transaction with existing liquidity through cash reserves and revolving credit capacity. Windstream estimates the transaction will be accretive to free cash flow in the first year following the closing after expected annual synergies of approximately $1.5 million in operating expense savings and excluding integration charges.

The boards of both companies have approved the transaction, which is expected to close in the fourth quarter of 2010, subject to certain conditions, including necessary regulatory approvals.

Hosted Solutions said it has installed a 2N power distribution design, which features dedicated redundant elements, including generators, utility feeds, and main electrical switchboards, and more. The system is designed so that maintenance can be performed on a component on one of the sides, without impacting the data center load; each side is capable of handling the full facility load when the other side fails.

“We cater to enterprise customers with high availability requirements,” said Kip Turco, Hosted Solutions’ Chief Operating Officer. “This facility delivers the kind of reliability that businesses in sectors like banking, retail, SaaS and healthcare require. Our ability to deliver consistent uptime is a key factor in our significant growth throughout the Charlotte market in the past several years. The improvements we are making to our Charlotte data center give us the added capacity we need to meet that demand.”

Hosted Solutions started life as a local provider focused on the Research Triangle area of North Carolina, with headquarters in Cary and a data center in Raleigh. The company expanded into Boston in 2006, and was acquired by ABRY Partners last year. The new ownership has helped Hosted Solutions expand or upgrade its  five SAS 70 Type II certified centers located along the East Coast.

“Our clients depend upon us more than ever to deliver consistent uptime for their operational infrastructure,” said Turco. “Our constant vigilance in improving our systems helps ensure that our customers’ data will be there every hour of every day.”

PEER 1 Ontario Data Center Completed.  PEER 1 announced that the company’s new 40,000 square foot, $40 million data center located in Toronto, Ontario is officially up and running. The new facility is the first to offer all three services – colocation, managed hosting and dedicated hosting.  The first of four $10 million PODs was built out and will hold approximately 270 cabinets in the 7,500 square feet of data center space.  This is the third Toronto facility for PEER 1 and 17th worldwide.

CoreSite adds to management team.  CoreSite announced the addition of three key members to its executive management team. Chuck Price was appointed as senior vice president of information technology and is responsible for the overall technology strategy at CoreSite. Prior to joining CoreSite Price was the head of technology for TD Ameritrade.  Chris Bair was appointed as vice president of sales and is responsible for the sales and revenue growth of all CoreSite products. Rob Sistek is the new senior vice president of capital markets and is responsible for structuring and executing the company’s debt and equity capital markets transactions and oversees the company’s treasury functions.

Escher, Nordberg Join Horizon Data: Horizon Data Center Solutions said Tuesday that it has added Tom Escher and Richard Nordberg, Jr. to its executive team. As Director of Channel Sales, Escher will develop and grow Horizon’s sales channel. Nordberg steps into the role of general manager – eastern region and will guide the business development, operations and service delivery for Horizon’s East coast expansion efforts out of its newest facility in Manassas, Va.

Akamai selected for Cannes Film Festival. Akamai (AKAM) announced that online video coverage of the 63rd Cannes International Film Festival will be delivered on the official Cannes website using the Akamai HD Network. The award presentations and proceedings will be streamed with the help of partner Inlet Technologies. Both on-demand coverage and trailers will utilize the Akamai HD Network for Adobe Flash Platform and be delivered in full HD resolution. Inlet’s Fathom advanced encoding platform will be used to prepare all content being streamed from the event. Akamai also announced plans to integrate support for Adobe HTTP Dynamic Streaming and Adobe Flash Access 2.0 into the Akamai HD network.

The Stratus hybrid cloud option allows customers to cross-connect their existing back-end resources such as databases and other supporting applications to the Stratus Trusted Cloud, where they can host front-end computing power and other resources like network, firewall, load balancing and web servers. Customers can also cross connect Stratus cloud computing resources directly into their environment to handle overflow situations such as seasonal spikes that require excess compute capacity.

Multiple companies have already begun taking advantage of the hybrid cloud, including BrandPort, Belk, Rollover Systems, VMware, Knowledge Point 360, Cleveland Cavaliers, Baylor School and NRCCUA. Companies can use the hybrid version of the Stratus Trusted Cloud to take advantage of rapid and elastic deployment and usage, with the ability to add or subtract resources depending on changing requirements.

“We’ve seen tremendous interest in the hybrid approach,”” said Christopher “Kip” Turco, Hosted Solutions’ Chief Operating Officer. “Many customers want to take advantage of the benefits of cloud, but they are not ready to move their entire environment to the cloud. The Stratus hybrid option enables them to do just that – leveraging the benefits of cloud without reconfiguring their entire environment.”

Hosted Solutions, which provides data center and managed hosting services, is expanding its 10,000 square foot facility by an additional 5,000 square feet to make room for future growth, and is also upgrading the facility’s power capacity.

“After working with Lee Technologies on the strategic build out of our Raleigh facility, we were fully confident their team was ideally suited to manage, execute and deliver the expansion and re-design of Hosted Solutions’ Charlotte Metro facility on time and on budget,” said Rich Lee, Founder and CEO, Hosted Solutions. “Our customers demand data centers engineered for maximum security and 100% uptime, and Lee Technologies enables us to deliver uninterrupted services and availability.”

“Lee Technologies is once again pleased to partner with Hosted Solutions, and looks forward to working together on additional projects in the future,” said John C. Lee, IV, Chairman and CEO, Lee Technologies.

Founded in 1983, Lee Technologies has commissioned critical power equipment for more than 5 million square feet of mission-critical space and currently maintains critical equipment that supports over 3 million square feet throughout the U.S. The company is headquartered in the Washington, DC metroplex and has offices in Atlanta, Houston, Los Angeles, San Francisco, Seattle and Dublin, Ireland.

“By moving deeper into the stack and providing a greater range of services, such as applications hosting and support, we deliver greater value to our clients,” said Christopher “Kip” Turco, Hosted Solutions’ Chief Operating Officer. “They, in turn, are far more likely to regard us as their trusted partner, ready to help them solve a full scale of business challenges. We’ve seen a significant level of interest in this offering from our customers.”

One of the early adopters of Hosted Solutions’ new offerings is Motricity, which provides data solutions to mobile operators and content providers. Those services include functions in key areas needed to ensure consistent uptime, featuring more than 100 terabytes (TB) of backup and storage, Oracle RAC administration, dedicated account management and security to meet PCI compliance standards.

“There has been a notable trend in hosting providers looking up the stack and trying to determine how to evolve their hosted solutions in concert with the increasing demands of the new breed of SaaS and complex customers,” said Antonio Piraino, Research Director -Hosting & Cloud Computing, Tier1 Research. 

“Those service providers that are able to provide service levels around these core applications are quickly gaining a greater level of trust by their customers,” he added. “This represents a huge opportunity as the comfort level grows as users understand the reliability and range of services that can be deployed with greater speed, efficiency and at a lower price point than doing it themselves; allowing these firms to devote more of their attention to their core competencies.”

Hosted Solutions, based in Raleigh, North Carolina, was acquired last year by private equity firm, ABRY Partners for $140 million dollars.

Hosted Solutions started life as a local provider focused on the Research Triangle area of North Carolina, with headquarters in Cary and a data center in Raleigh. The company expanded into Boston in 2006, and was acquired by ABRY Partners last year. The new ownership has helped Hosted Solutions expand or upgrade its five data centers, setting the stage for today’s announcement of a cloud computing service.

“We believe this is a product that helps us expand beyond the typical data center managed hosting offering,” said Kip Turco, the Chief Operating Officer for Hosted Solutions, who said he expected the Stratus Trusted Cloud to expand the company’s customer footprint. “This makes it much easier for us to sell at a national level.”

The Stratus Trusted Cloud features a “massively scalable, multi-tenant infrastructure … with built-in high availability and automated resource balancing,” the company says. The platform will be supported by Cisco’s new Nexus switches as well as hardware and software from VMware, Sun, EMC, F5 and Juniper.

99.99 Percent Uptime SLA
“This environment is very robust,” said Turco. “For our cloud, the differentiator is a four nines (99.99 percent) SLA. This is not a developer cloud. We are an infrastructure as a service provider and are used to dealing with production systems. That’s what we do well.”

The Stratus Trusted Cloud will allow customers to scale their resources up and down and bill customers based on resource usage. The platform will run in Hosted Solutions’ Raleigh data center, with additional sites to be added later. But it won’t be fully “self-serve,” with instant management through a web portal, as seen in many new cloud services.

“We actually go through a process where we require customers to interact with our staff,” said Turco, who said the company chose this approach to address enterprise customers’ concerns about staffers making mistakes with online management tools.

The first customer using the Stratus Cloud is Digitalsmiths, which helps content companies monetize video. “Working with major Hollywood studios, media companies and advertisers requires us to work with large amounts of video data,” said Matt Berry, Chief Technology Officer and co-founder of DigitalSmiths. “As part of our work, we need to be able to rapidly scale up our access to more storage space and processing capability. Trying to do all this in house can take time, money and detract us from focusing on our core capability. By introducing the Stratus Trusted Cloud, Hosted Solutions will enable us to simply and automatically get the resources we need in less time and at a fraction of the cost.”

Specialized Clouds for Vertical Markets
Turco said he expects cloud computing will soon focus on developing specialized clouds for vertical markets. “A production-level cloud will need to be based around compliance requirements, such as a PCI-compliant cloud, or a pharma or biotech cloud that would be HIPAA compliant,” he said. “I don’t think a lot of enterprises are going to jump into the cloud until there’s been a switch from the developer cloud to a production cloud.”

Turco compares the development of cloud computing to the evolution of virtualiztion, which got its foothold in the enterprise in test environments and was later adopted in production. Hosted Solutions is leveraging its experience hosting production environments for customers such as the Atlanta Falcons, Channel Advisor, Lowe’s Motor Speedway, Sony Ericsson, Motricity and and more.

More Growth Ahead
“For nearly a decade, we have built our business around delivering best-in-class service at every level for our customers,” said Rich Lee, Hosted Solutions’ founder and Chief Executive Officer. “The Stratus Trusted Cloud continues that tradition. It is a cloud platform that provides the benefits of strategic IT infrastructure support – enabling our SME customers to run their production environments, even as they realize the cost, time and efficiency advantages that are increasingly associated with cloud computing.”

While the Stratus Trusted Cloud may allow Hosted Solutions to expand its virtual geography, it’s thinking about physical expansion as well. “The company is really positioned well to expand and grow,” said Turco. “We’ve been very methodical when it comes to expanding. We’ve been actively looking at companies and markets to look to expand the company beyond its current three markets.”

“We have seen tremendous momentum with our customer growth throughout New England,” said Mike Lee, Regional Manager for Hosted Solutions. “Given current market conditions, companies today require a trusted partner who can provide them with services across all areas of IT, rather than simply providing data center space or point solutions. Increasingly, companies recognize both the immediate and ongoing value of having a trusted partner provide them with the full range of outsourced technology services.

Lee said Hosted Solutions’ expansion in New England is part of the strategic direction the company has embarked upon, as part of its acquisition last year by ABRY Partners. The company also has four other high-capacity data centers in North Carolina, serving markets up and down the East Coast. ABRY Partner also owns Houston-based colocation provider CyrusOne, and has invested in significant data center expansions and upgrades at both providers.

This is the second series of upgrades to the company’s Boston operations. Hosted Solutions invested $1 million in upgrades after its acquisition of Boston Datacenters in 2006. Upgrades include a redesign of the interior layout to promote better cooling, an improved data backup system, and additional UPS power support.

“TTS has truly developed an industry changing solution that enables large enterprises with multi state operations to easily digitize and store tax related certificates that have been fully vetted by qualified tax professionals without investing in software, hardware or IT support,” said Brian Baker, Vice President of Sales with Hosted Solutions.

“It is critical for CertCapture to be available, scalable, and perform at a high level and with the latest security protections built in.” said Silvia Aguirre, TTS President and co-founder. “With Hosted Solutions, we’ve found a partner who maximizes our IT infrastructure so we can focus on our core competency of helping organizations comply with State Tax Regulations.”

Hosted Solutions, based in Raleigh, North Carolina, was acquired last month by private equity firm, ABRY Partners for $140 million dollars.

For additional background and details, see our story about ABRY’s acquisition of Hosted Solutions, as well as the recent expansion of ABRY portfolio company CyrusOne, which has added a Dallas data center.