i/o Data Centers Lines Up Generators

i/o Data Centers said today that it has reached an agreement with Empire Power Systems, the Caterpillar distributor for Arizona and Southeast California to ensure that it will have backup power for the build-out of its data centers. That will include 16 megawatts of backup power for i/o Data Centers’ Scottsdale ONE facility, all supplied by Caterpillar.

“The Caterpillar name implies quality,” said Tony Wanger, Senior Managing Director of i/o Data Centers. “Cat has a reputation as being a premium product in this market, and that matches up well with our desire to create a high level of confidence in our ability to host our client’s most important information. In the arrangement with Empire, we get the highest quality of product and we also have access to the capabilities of a very large Caterpillar distributor.”

Strong demand for diesel generators from data center builders and growing economies in China and India have contributed to a delivery backlog for large generators, with backlogs approaching a year for some larger models. Many new data centers are arranging for large volumes of power, which places additional pressure on manufacturing capacity. DuPont Fabros has 32 generators at its new facility in Ashburn, Virginia, while Google has received permits for up to 38 generators for its new data center in Council Bluffs, Iowa. With that level of demand, procuring generators becomes a key element of the data center construction timetable.

i/o Eliminates Cross Connect Fees

i/o Data Centers will eliminate cross connect fees for colocation customers, the company said this week. Phoenix-based i/o, which is in the process of completing a data center in Scottsdale, is planning to operate more than 1 million square feet of premium data center space in up to 10 markets.

“In an i/o building, you don’t pay for a cross connect,” said Tony Wanger, Senior Managing Director of i/o Data Centers. “When you colocate your IT equipment at i/o Data Centers, you pay one fee, and we worry about the rest. Every single cabinet comes with six cross connects, and every cage comes with a patch panel. We think it’s the next logical migration for this industry.”

Physical connections between networks are an important function of carrier-neutral data centers and multi-tenant carrier hotels (also known as Internet gateways), usually taking place in a central “meet-me room” (MMR). Facility owners typically charge fees for supplying these interconnections.

Connection fees became standard in the late 1990s, when telecom companies and network providers were the primary users of meet-me room and Internet exchange services. In recent years the customer base in many carrier-neutral data centers has shifted toward enterprise companies, Wanger said.

i/o Data Centers Reports Strong Leasing

i/o Data Centers says it already has commitments for more than half the space in its 100,000 square foot facility in Scottsdale, Ariz.

CIBER Announces Phoenix Data Center

Systems integrator CIBER, Inc. (CBR) has established a dedicated managed services data center in Phoenix, Ariz. in a building owned and managed by Digital Realty Trust (DLR). The facility will be the fourth CIBER data center in the U.S.

“Our data center in Phoenix is housed in an elite facility, with a vast array of carrier options and connectivity,” said Mark Perlstein, Vice President of CIBER’s Edison, New Jersey-based IT Operations practice. “This facility nicely complements our East Coast data centers and gracefully expands our hosted and managed services solution offerings to companies located in high-risk cities or at-risk facilities.”

Three Projects in Works for i/o Data Centers

Phoenix-based data center operator i/o Data Centers, which announced its first data center today, has two other projects in the works as it begins assembling a planned regional network of enterprise facilities. In addition to i/o’s initial project in Scottsdale, the company also plans a second data center in the Phoenix area and is evaluating sites in the Denver market, according to Tony Wanger, Senior Managing Director of i/o.

Wanger emphasized that while i/o Data Centers is a new company, it’s not new to the data center business. The operations team behind i/o previously operated the Downtown Phoenix Technology Exchange (DPTE), the leading carrier hotel in the Phoenix market. “We’ve attracted significant financing,” said Wanger. The company is backed by IO Capital, LLC, which includes many of the backers of the DPTE facility (including Sterling Capital) and has $100 million in assets.

The first project is a 100,000 square foot data center facility in the Perimeter Business Center in Scottsdale, with an adjoining 22,00 square foot office building that will serve as i/o’s headquarters. Built in 2000 as a manufacturing site for DVDs, the site has two separate 12-megawatt electricity feeds. “We’ve literally got 2N power from our utility,” said Wanger. “We’ve already got the generators and the power. It’s a wonderful building, and the city of Scottsdale has been working with us.”

i/o Data Centers Plans National Network

A new entry in the data center industry is planning to build more than 1 million square feet of premium data center space in up to 10 markets, starting with a new facility in the Phoenix market. i/o Data Centers is the data center operations affiliate of private equity firm IO Capital, LLC with $100 million in assets. i/o’s management team developed and operated the Downtown Phoenix Technology Exchange before selling it to Digital Realty Trust in a 2006 transaction valued at $175 million.

Not surprisingly, i/o Data Centers is starting in the Phoenix market with a Tier 4 managed data center located in the Perimeter Business Center business park in North Scottsdale, Ariz. which is expected to be fully operational by July 1. The site features 12 Mw of power, standby diesel generators, and highly robust mechanical systems supporting in excess of two acres of raised floor data center space.

Digital Realty Takes Stake in Westin Building

Digital Realty Trust, Inc. (DLR) has acquired a “partial interest” in the Westin Building in Seattle, the leading Internet gateway in the Pacific Northwest. The investment was one of four deals announced today by Digital Realty, which also acquired data center facilities in the Boston and Miami markets and a warehouse in Tempe, Arizona for conversion to telecom use.

The release from Digital Realty doesn’t indicate the exact dollar value of its investment in the Westin Building, or the size of its partial ownership stake. The total price paid for the four transactions was $79.1 million, according to Digital Realty. Given the size and value of the Westin Building, and the inclusion of three other properties, that price suggests a minority ownership position.

The Westin Building (2001 Sixth Avenue) is a 34-story, 389,000 square foot tower that is 90% leased. Approximately 185,000 square feet is built out as technical space and supports a variety of telecom functions including colocation space and meet-me rooms.

“The addition to our portfolio of the Seattle Internet gateway facility, locally known as the Westin Building, represents a very strategic initial acquisition for us in this tier one market,” said Michael F. Foust, Chief Executive Officer of Digital Realty Trust. “It not only expands our national footprint into the Pacific Northwest, it also adds to our existing portfolio of mission critical Internet gateway facilities in Chicago, Dallas, San Francisco, Los Angeles, Miami, Phoenix and Charlotte.”

Guitar Center Moves Data Center to Phoenix

The Phoenix market is hot, and continues to attract companies relocating from other cities. One of the latest migrations is by the Guitar Center Inc., which is moving its data center from Woodhills, Calif., to central Phoenix. The company has leased 7,014 square feet in Phoenix’s 2600 Tower for its data center. The Arizona Republic said the deal is valued at $1.41 million.

The Guitar Center operates an online store selling a wide variety of guitars and merchandise, and has retail stores in more than 100 locations throughout the country.

iPower Leases Phoenix Data Center

Growing web hosting provider IPOWER, Inc. today announced the leasing of a brand-new data center facility in central Phoenix, which will be the company’s fourth data center. The 32,000 square foot facility is equipped with $7 million in technology investment, including amenities like video intercom system and handkey biometric hand scanners for security, 5 carriers on-site, operations control center, and VESDA laser system, the company said.

“We are very pleased to add this data center to our group of centers,” said Thomas Gorny, CEO of IPOWER. “Its state-of-the-art capabilities will bring an even higher level of service to our customers than ever before.”

365 Main Expands Into Phoenix, Northern Virginia

365 Main has acquired data centers in Phoenix and northern Virginia as it continues to expand, citing strong customer demand for top-quality mission-critical facilities. The Phoenix property is a fully operational 315,000 square feet center in the Price Road tech corridor in Chandler, which the company purchased last December. The northern Virginia data center is a 145,000 square foot site on Lafayette Center Drive in Chantilly, which is expected to open for business in September.

365 Main said its choice of expansion cities was guided by customer demand and affordable power. “The demand we’re seeing is consistently coming from the enterprise sector,” said VP of marketing Miles Kelly, who said many of 365 Main’s customers at its San Francisco facility are interested in expansion space in one of the two new markets. “Phoenix has become well-recognized as a prime disaster recovery market, so our pipeline is pretty fresh,” he said.

365 Main, which also had a grand opening for its new Los Angeles data center yesterday, focused on “power-sensitive” geographic markets. Customers will pay about 4 cents a kilowatt for power at the new sites in Northern Virginia (Dominion Power) and Phoenix (Salt River Project). That’s a third of the rates at the company’s San Francisco and Los Angeles centers, said company president Chris Dolan.

“Power is the first thing everyone asks about now,” said Dolan. “It’s a major concern, so we developed a billing model that only charges customers for exactly what they use. Most companies charge a flat rate per month in a ‘use it or lose it’ structure, which usually means that the customer loses. But that’s not the way we like to do business, so we came up with a different model that is more fair to the customer.”