Carpathia Hosting Acquires ServerVault

Carpathia Hosting has acquired its northern Virginia neighbor ServerVault, the companies said Wednesday, combining two providers with strong records in providing secure hosting and regulatory compliance for enterprise and government customers. Terms of the deal were not disclosed.

“We’re putting together two very strong, very profitable companies, which were already poised for success,” said Carpathia Hosting CEO Peter Weber. “The combination of five years of organic growth and this acquisition positions Carpathia Hosting as one of the fastest growing companies in the hosting industry.”

Carpathia is based in Ashburn, Va. and operates 10 data centers across the United States, while ServerVault has its headquarters and data center in Dulles. Both companies do about 40 percent of their business with government agencies, and focus on “high touch” managed hosting services.  The acquisition comes 15 months after Spire Capital acquired Carpathia Hosting and began expanding its data center footprint.

Focus on Compliance Expertise
Today’s acquisition provides additional expertise in regulatory compliance, an area where ServerVault has built a strong practice. “ServerVault is recognized as the leading provider of highly-secure and compliance-centric hosting services,” said Jon Greaves, the CTO of Carpathia. “We are very excited to build on this foundation and add Carpathia’s rich services portfolio and data center footprint.”

Medical Billing Firm to Build Data Center

Here’s an example of how growing demand for medical records management is boosting demand for data centers. Medical billing specialist Emdeon (EM) said this week that it has leased a 34,200 square foot property near the Nashville airport for a new data center. The company signed a 15-year lease with Solomon Airpark LLC for a shell building at Airpark Center East, which will be converted into a data center to replace Emdeon’s existing Nashville data center located at One Century Place. Emdeon will pay initial rent of $39,500 per month, and will have the option to extend the lease agreement through two five-year renewal terms. The lease agreement is described in an SEC filing.

Roundup: CoreSite, NaviSite, Verari, 3Com

Here’s a roundup of some of some of this week’s headlines from the data center and hosting industry:

• CoreSite plans 6 megawatt expansion in northern Virginia.  National data center and colocation provider CoreSite announced Tuesday that they are planning a six Megawatt expansion (PDF) of their northern Virginia data center.  Other initiatives planned for this site include water-side economization, variable speed fan air conditioning units, 95% efficient UPS units, Tier II generators and zoned lighting.  When completed later this year the site will offer a total power capacity of 12 Megawatts.
• NaviSite awarded GSA contract for Managed Hosting. NaviSite announced that it has received a General Services Administration (GSA) schedule contract allowing it to sell a full range of managed hosting and infrastructure services to U.S. federal government agencies and all branches of the military. NaviSite Chief Revenue Officer Brooks Borcherding said “the new GSA contract is a significant milestone for NaviSite as it allows us to extend the benefits of our enterprise class infrastructure solutions to government clients.”
• Verari Systems offers up to 26 Petabytes in 2nd generation FOREST container. Verari Systems announced two storage related items Tuesday by integration of a 2TB hard drive. The first was increasing the total storage capacity of a FOREST container, up to 26 Petabytes.  The second was supporting up to 1.3 Petabytes of storage per platform in Verari’s BladeRack 2 X-Series. The Verari FOREST recently won the 2009 Uptime Institute’s Energy Efficient Products: Facilities category.  The 2TB drives for the FOREST container and BladeRack 2 X-Series blade platforms are available immediately.
• 3Com’s H3C sets new performance standard. 3Com announced Tuesday their H3C S12500 large core/data center switching platform. Results from Tolly Group and Spirent TestCenter validate the unmatched performance of the platform. 3Com Senior vice president Saar Gillai said “3Com set out to develop an industry-leading large core/data center switch with its H3C S12500 platform that delivers on the reliability, security, scalability and performance required to meet the demands of today’s network operations.” Testing categories included performance and efficiency, advanced video support, ultra resiliency and reliability.

Study: Data Center Supply Near All-Time Low

Data center vacancy rates will reach an all-time low in 2010 as available space is absorbed and the credit crunch squeezes new construction projects, according to an analysis by commercial real estate specialist Grubb & Ellis.

The situation is becoming critical for companies with large requirements, according to Jim Kerrigan, the director of Grubb & Ellis’ National Data Center Group, who said he can currently identify only six options in the United States for data center users who need more than 7 megawatts of power or more than 50,000 square feet of contiguous space.

“The problem is that we have too many large tenants chasing that space,” said Kerrigan. He doesn’t quantify the supply/demand imbalance in terms of square footage, but says the looming shortage is as acute as he’s seen. Kerrigan is an industry veteran who has specialized in data center real estate since 1999, and been involved in millions of square feet  of leases involving the industry’s leading players. 

Kerrigan said several traditional data center hubs are facing acute shortages of space that can accommodate large users in a short time frame. “Northern Virginia has some issues because there’s major demand there,” said Kerrigan, nopting a recent series of large leases. “We still don’t know about the government requirements coming out of the stimulus package, which could have a big impact on supply. Santa Clara (Calif.) also has a big supply issue right now.”  

Healthcare Firm Expands with DataChambers

Here’s an example of a provider benefiting from data center demand in the healthcare industry: DataChambers said this week that the Premier healthcare alliance has expanded its multi-year contract for disaster recovery and business continuity services in DataChambers’ facility in Winston-Salem, N.C. The expansion doubles the amount of space Premier occupies in the Winston-Salem data center, as well as the number of servers.

“After an internal review, we determined that many more of our systems were critical to our day-to-day operations and needed to be part of our disaster recovery plan,” said John Huddle, senior director of infrastructure at Premier. “In addition, we’ve recently acquired new products that demand real-time processing.”

That includes SafetySurveillor, a solution used by hospitals to track infection trends and to detect potential problems before they impact patient care. The effectiveness of the service depends on continuous, around-the-clock availability to physicians.

Stimulus Includes $3.4B for IT Infrastructure

The Obama administration’s economic stimulus package includes approximately $3.4 billion in spending for IT projects, including heavy investment in electronic health records and infrastructure upgrades for the departments of Homeland Security, State, Veterans Affairs, and Health and Human Services.  

The stimulus plan includes $50 million earmarked for Department of Energy research into energy efficiency and renewable energy in IT and communications. The appropriation for the Office of Efficiency and Renewable Energy (EERE) is part of $16.8 billion in funding the DOE received in the American Recovery and Reinvestment Act, which President Obama signed into law on Tuesday.

The EERE funding is among the most direct benefits for the data center industry, along with $500 million earmarked for a new data center for the Social Security Administration. But the 400-page stimulus package dedicates an additional $2.8 billion to a broad range of investments in IT equipment, infrastructure and security. 

Are Colocation Prices Heading Higher?

Will the credit crunch lead to higher colocation prices in the busiest Internet markets? With projections of IT budget cuts and weaker demand for many products and services, why would colo prices go higher?

The talk of rising colocation prices has been stoked by a recent report from Tier 1 Research that sees the credit crunch creating a tight market for data center space. Some of the report’s key findings have been discussed this week at Nortia Research and Telecom Ramblings.  

“The recovery of the economy from the current slowdown will likely result in a temporary exacerbation of price increases, as demand will grow significantly faster than supply during the first 12 months of a recovery,” said Jeff Paschke of Tier 1. “This is due to the datacenter construction cycle, which varies from nine months (for a phased expansion) to 18 months (for a greenfield build). Demand, of course, has no built-in delay, which will likely cause the sort of cross-market price increases seen during 2005.” 

Domain Buying Slows as Parking Payouts Falter

If you’re one of those people that’s annoyed by all those ad-packed domain “parking pages,” you may be seeing fewer of them in the future. Domain monetization is becoming more difficult as ad payouts decline, which is translating into a slowdown in new domain registration.

VeriSign said yesterday that 11.5 million new domains were registered in the third quarter of 2008, a decline of 2 percent from the previous quarter and well off the high of 14 million in the first quarter of 2008. The renewal rate for existing domains slipped to 72 percent, down 1 percent from the second quarter and down from the high-water mark of 77 percent seen in late 2006.

AT&T to Cut 12,000 Jobs, Capital Spending

AT&T said today that it will lay off 12,000 employees and reduce capital spending as it seeks to adapt to a tough economy and the shift to wireless technologies. The telecom giant said it plans to reduce its capital expenditures from 2008 levels, and will detail its 2009 spending plans in January.

It’s not immediately clear how the cuts in staff and capital spending will affect AT&T’s huge data center network, which includes 38 facilities around the world with more than 2.3 million square feet of data center space. Larry Dignan notes that the company’s 2008 capital spending is likely to reach $20 billion.