Tag Archives: data centers

IO President Anthony Wanger.

Tech-friendly scene makes Arizona a data center hot spot

Phoenix has its head in the clouds.

Digital information—everything from financial and medical accounts to media entertainment and social networks—is now being stored in about 60 high-tech data centers throughout the Phoenix metro area, adding to the state’s growing reputation in the technology industry.

Renewable energy, geo-stability and tech-friendly legislation are a few of the reasons why Arizona has one of the highest concentrations of data centers in the United States, second only to Virginia.

Chris Camacho, president and CEO of the Greater Phoenix Economic Council, says one of the reasons Phoenix has seen a significant level of data center activity is power availability and competitive pricing.   

“We have very affordable power costs,” Camacho says. “Our utilities have been very flexible in supporting this industry to ensure we have dual feeds from the electrical standpoint. Having affordable power rates has been critical. The other attributes that are important to this industry as to why we have been successful are the level of infrastructure, that’s generally fiber infrastructure, and latency. We’re very favorable to the West Coast in that regard.  So our communities, as well as Cox, Century Link and others, have done a great job extending infrastructure to support this industry.”

Demand for renewable energy

As data centers continue to propagate, the demand for power increases.

A recent survey by Mortenson Construction, one of the leading data center contractors in the U.S., reported 84 percent of responding data center executives, developers and operators believe there is a need to consider renewable energy. Energy efficiency is a top concern and nearly half the survey participants believe improved technology can increase energy efficiency.

“Technology companies like Apple, eBay, Amazon and Google, all of the organizations that store massive amounts of information, tend to have leaders who are highly environmentally conscious,” explains Steven G. Zylstra, president and CEO of the Arizona Technology Council,  “They would much prefer to use renewable energy to power these data centers rather than power coming from a coal-burning plant. It’s less about the economics and more about doing the right thing.”

IO president Anthony Wanger agrees. IO, one of the largest colocation data centers in North America, has created and patented energy efficient data storage modules and operating software. In 2013, APS evaluated IO’s Power Usage Effectiveness ratings and determined the modules were more efficient than the traditional raised-floor data center environment.

In February, IO announced an agreement the company made with APS to be able to offer renewable energy to its customers.   

“We had a break through,” Wanger said. “We were able to negotiate a rate with APS that allows us to buy renewable energy. We were able to get a rate that reflects the scale of our use, and the option for our customers to simply choose to go green. For about a cent and a half more per kilowatt hour they can buy energy that is 100 percent renewable. It’s solar and wind. We have had terrific customer feedback about it.

“It’s important for us,” Wanger continues. “We want to be leaders in dematerialization and we want to be leaders in giving our customers the tools and the choices they need to manage their energy needs. Our very largest customer, Goldman Sachs, is committed to zero carbon.

“We have taken great strides in moving our energy over to renewables. I’m not going to tell 1,000 customers what they have to do,” he explains, adding that if he puts it on the menu and incentivizes it, he believes they will choose it. “We are committed to renewables, we are leaders in energy efficiency, by putting it out there, it’s going to be a needle mover.”

Making it happen

IO began with three businessmen and a foldup table from Costco, Wanger said. The table, signed by the co-founders Wanger, George Slessman and William Slessman, is somewhere in the Phoenix facility as a reminder of how they began.

“I always liked to build things. I have always been fascinated by buildings and real estate and systems and machines,” says Wanger, who comes from several generations of entrepreneurs. “I was brought up in the ‘you make your job, you don’t get a job’ mentality. Sit down. Figure it out. Make it happen. That’s the only thing that works for me.

“We’ve been really fortunate we have a really solid business with terrific institutional backers and terrific institutional customers. We’ve been able to attract some terrific talent. The way we got here is people. When I say make it happen, it isn’t just the three of us, it’s the entire team.

“Make it happen. That really is the moral of our whole story here. These data centers didn’t build themselves. These folks didn’t employ themselves. The capital didn’t raise itself. The customers didn’t identify and sign themselves. This is hard work.

He suggests that in order for Arizona to continue growing its reputation in the technology arena, it, too, will take hard work.

“If Arizona wants to continue its fantastic growth it’s going to be because it chooses to, not because it happens automatically. I feel very positive about Phoenix and Arizona’s prospects, but I think we have to be careful not to take things for granted,” Wanger says. “It’s a very competitive economy. I think we would be well advised to be purposeful in our recruiting and the way in which we create a climate where risk takers can take risks.”

Trending

Wanger and his partners at IO, which now has six locations around the globe, were among some of the early risk takers in the data center industry.

“We grew up with the GoDaddy guys. If you go back 10 or 15 years ago, they were in data centers. We were in data centers. There was another guy in data centers and that’s about it,” Wanger says.

According to a market overview analysis by CBRE, today there are about 60 data centers in the Phoenix metro area, including colocation operations and those used by individual companies. An additional 21 greenfield sites have been identified mostly in the East Valley for build-to-suit data centers.

Even with the explosion of data centers in Phoenix, Wanger says he is seeing a trend toward consolidation.

“We are moving away from square footage to more power in less space with shared highly utilized banks of computers,” he says. “I think that the Internet went from 400 markets globally to 200 to 50 markets. I think it’s on its way to being in 12 markets globally. That’s mega consolidation. We are doing everything we can do in our power to make sure Phoenix is on the winner side of that equation.”

Tech magnet

Energy affordability, access and renewable options are sited as reasons for locating power-intensive data centers in Phoenix, but there are more.

Geo-stability is an important factor when deciding a data center’s location. Arizona is free of natural disasters, making it an appealing locale.

“We don’t have hurricanes, or earthquakes or tornadoes or floods or any of those things that jeopardize a data center. We are a very sound place from that standpoint,” Zylstra says.

Moderately priced real estate with relatively low property taxes and legislative incentives sweeten the pot.

“A lot of economic policies in the legislature have supported both enterprise use and colocation centers,” Camacho says. “More recently there was legislation in the last few years that provided a sales tax exemption on server and IT equipment. That was one of the last pieces of the puzzle of being a great market in terms of allowing this market to grow and making it competitive against California and these other states.”

According to CBRE, “The financial impact of this law to a 1 MW tenant’s bottom line could be as much as $6 million to $7 million in tax credit savings over a 10-year period.”

Camacho continues, “There are tax credits available for companies of a certain investment scale, so, in a certain investment threshold, when they meet that level of capital investment, they are eligible, assuming they are going to use significant renewable energy resources, to obtain a corporate income tax credit.”

(subhead)The future

Locating data centers here is often an introductory step for some of the larger companies to test the business waters and learn about the Phoenix area.

“We’ve spent a lot of time working to support colocation operations in the market that are already here,” Camacho says. “And we are working as diligently as we can as we travel outside this market and showcase Arizona marketplace to prospective users. We’ll showcase IO data centers and Digital Realty Trust and others that are in this region with the goal of inducing these tenants to come and utilize colocation space and drive new investment and job creation at the same time.

Proximity to California has made it convenient for companies with corporate headquarters on the West Coast to locate their data centers here. “It encourages them to visit and to learn more about the operating environment. Then our goal is to talk further with them about future operational expansion. It could be back office, IT, or technology centers. Data centers and data storage are generally their first foray into evaluating this market on the office side.

“Once you become a nerve center where companies store data, then you start seeing a lot of these colocation tenants that are in these major facilities evaluating opportunities for back office expansion which generally comes with more job creation,” Camacho says.

CBRE reports a high quality of life and low cost of living have encouraged back shop operations for companies such as Wells Fargo, American Express, PayPal, Yelp and others to locate here.

“Companies tend to aggregate around each other,” Zylstra says. “At some point you get to a critical mass that people recognize and they want to be affiliated with it, connected to it.

“The recent Apple announcement is a watershed moment for us,” Zylstra says, referring to Apple’s plans to locate a data center in Mesa. “Apple is the most innovative company on Earth today. It’s the most successful company on Earth. When that kind of company makes a commitment here in Arizona it suggests that we have come into our own. I believe it is an important milestone in becoming known for technology.”

As the technology sector continues to grow, it is important to attract quality talent, he says.“ The greater the reputation the easier it is to attract and retain talent and that’s your competitive asset in a digital economy,” he says.

Drawing in talent is important, Camacho agrees, but he also says it is important to provide a continuing pipeline of trained talent in IT and technical services through our local educational system.

“That’s what is going to make this industry successful,” Camacho says. “We can see that pipeline coming through our Maricopa Community Colleges and the four-year systems that can meet the demand.

“Even though they are not large employers, there’s a very significant level of indirect technology job creation associated with these data centers. On average, you can provide anywhere from two to four indirect jobs for each of the jobs created within the companies themselves.”

technology

SRP prepares grid to support new technology systems

A unique partnership between Salt River Project and BASELAYER, the advanced data center hardware and software company born within IO, will provide an innovative approach to supporting the addition of critical data centers in the Valley.

Data centers support modern computer technology information systems such as the Internet.  They are also large consumers of power, and require an extremely reliable power source.  Through advanced technology solutions, data centers are now being built to support the industrial Internet and fuel the success in the new Internet of things.

SRP intends to deploy BASELAYER’s modular data center technology in locations near its existing electrical infrastructure where they can be connected directly to the energy grid.   SRP sees the new concept, to be named SRP DataStations, as a solution that would allow for data center growth with minimal impact to the community in relation to new power line construction.

“SRP has a long and rich history of forecasting future community needs while planning for them today,” said Mark Bonsall, SRP’s general manager and chief executive officer. “Investments and partnerships made by SRP over the past century in infrastructure such as dams, reservoirs and canals, as well as the electrical grid, have resulted in low-cost and reliable supplies of water and energy.

“Like the need for water and power, the future need for information could have a similar economic impact on the Valley and, as such, is worth evaluating and planning for.”

Similar to power stations on the power grid, Bonsall said SRP DataStations will play a critical role as a hub on the computing grid of the future. By leveraging these assets, SRP could build its DataStations where highly reliable power and telecommunications intersect – such as near power stations.  These SRP DataStations would then be populated with modular data centers, which will provide a quick and modular growth model for data center expansion.

“That will also reduce the cost for the operators and reduce the impact to the community since few additional power lines, if any, will need to be built as power stations have enough electricity to support existing growth at that location,” said Michael Lowe, assistant general manager and SRP’s chief customer executive.

SRP is working with BASELAYER to deploy the first DataStation in 2015.  The SRP DataStation will reside in close proximity to an existing power station with redundant, high-voltage power feeds and fiber optic cables.  The SRP DataStation will contain BASELAYER’s latest modular data center, specifically designed for this grid-integrated application.

By connecting these redundant power feeds directly to the modular data center, the data center will receive such a high level of power reliability that backup power infrastructure may not be required.  If the prototype performs as planned, Lowe said SRP DataStations could be available for commercial placement of modular data centers in the near future.

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IO Expands into Asia Pacific Markets

IO, the Phoenix-based global leader in software-defined data centers, today launched its Asia Pacific operations with Singapore as regional headquarters. This initiative advances the company’s committed expansion strategy to serve its global customers in one of the fastest growing markets in the world.

IO chose Singapore to address customer demand for software-defined data centre technology in the Asia Pacific region. The Republic provides a robust partner ecosystem, business-friendly environment, global talent and advanced technology infrastructure that strongly position IO to meet the needs of the world’s most demanding clients.

At launch, IO has in place all the facets of the business – customers, technology innovation, ecosystem partners and talent – to position the company for regional success. As part of its long-term, strategic technology partnership with IO, Goldman Sachs is utilising the IO Intelligent Control platform at IO Singapore, the company’s first modular software-defined data centre outside North America.

Earlier this year, IO established a distribution partnership with Tractors Machinery International Pte. Ltd in Singapore, Malaysia and Brunei, and at the Singapore Innovation Forum in June, the company announced an engineering partnership with McLaren Applied Technology. IO has attracted top-caliber executive talent for its Asia Pacific operations, led by Adil Attlassy, Executive Leader, Global Operations of IO and Peter Goh, Group Leader, APAC of IO.

From its base in Singapore, IO will deliver Data Centre as a Service (DCaaS™), using the company’s software-defined data centre technology: IO.Anywhere® and IO.OS®. The IO Intelligent Control platform improves data centre agility, reliability, security and sustainability. It has achieved MAS Certified Green® certification, demonstrating ability to provide customers with highly-energy efficient and sustainable data centre infrastructure. IO DCaaS enables software-defined cloud deployments at any scale so customers deployonly the data centre capacity needed to support their business applications, while also having the agility to add more capacity quickly and without interruption to operations.

“We warmly welcome IO’s decision to expand its software-defined modular data centre business in Singapore. IO’s data centre and technology will add to the vibrancy of the infocomms ecosystem here, and reinforce Singapore’s position as a data management hub,” said Mr. Jayson Goh, Executive Director of Infocomms and Media of the Singapore Economic Development Board (EDB). “We are confident that IO will be able to leverage Singapore’s market connectivity, global talent and business-friendly environment to enhance the delivery of technology to its clients.”

“IO’s long-term commitment to the Asia Pacific markets and to Singapore is demonstrable by the significance of our presence in Singapore. In preparation for our launch, IO has developed a world-class team of people, critical regional ECOSYSTEM partnerships, a centre of excellence for innovation in sustainability and most significantly, the deployment of the IO Singapore software-defined data centre,” said George Slessman, IO Chief Executive Officer and Product Architect. “The incredible growth of Singapore and the region is awe-inspiring, and we are proud to be a part of this extraordinary opportunity and community.”

According to Forrester Research, clients in Asia Pacific face increased pressure to build and run their IT systems in a sustainable and green manner. Forrester has forecasted that data centre services growth in the region would more than double GDP growth from 2010 to 2015, at 23% CAGR, with demand fueled by a need for reliable and cleaner power, escalating real estate costs, and a desire to move from fixed to circulating capital operating models. Forrester’s research shows that more than half of Asia Pacific firms want to move from capital expenditures (capex) to an operational expenses model (opex), and that third-party data centre providers are able to provide cost savings to both the CIO (in terms of immediate savings in the IT budget) and the CEO/CFO of the business (in terms of decreased risk of downtime).

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Established CFO Brings Tech Experience to IO

IO, a global leader in software-defined data centers, today announced Michael Berry has joined the company as Chief Financial Officer. Mr. Berry will be responsible for financial planning and analysis, accounting, operations, treasury activities and investor relations, and will report to CEO and Product Architect, George Slessman.

“I am very happy to have Mike join IO,” said Slessman. “His experience as a proven operational leader and technology executive will support IO’s growth and provide a solid financial and operational foundation for the organization.”

Berry joins IO from SolarWinds, a publicly held international provider of IT management software with approximately $300 million in annual revenue and over $3.5 billion in market capitalization where he was Executive Vice President and CFO.  He overhauled the company’s financial planning process and was instrumental in completing ten acquisitions and leading the maintenance renewal team to strong and consistent revenue growth. From a financial perspective, during Mr. Berry’s tenure the company achieved non-GAAP operating profit of greater than 50 percent for eleven straight quarters, and increased operating cash flow by 33% while growing total revenue by 28% on an annualized basis. Prior to SolarWinds, Berry was CFO at i2 (NASDAQ: ITWO), a publicly held, international provider of supply chain software and services. At i2, he rebuilt and scaled the finance and investor relations organizations, led the implementation of several financial planning systems, and played a key role in several strategic initiatives including the acquisition of i2 in January 2010 by JDA Software.

“I could not be more excited about joining IO,” said Michael Berry, IO’s new CFO. “Our leadership position in the foundation technology of the cloud, visionary leadership, marquis enterprise customers and disruptive technology, combined with my experience building the financial and operational foundation for proven technology companies, is a once in a lifetime opportunity.  It is truly a great fit that aligns very well with my personal and professional goals and objectives.”

Prior to his CFO experience, Berry served in various executive roles at The Reynolds and Reynolds Company, a provider of software and services to the retail automotive industry, most recently as Senior Vice President of Solutions Management, Development and Operations. He has also held executive management positions at Comdata Corporation and Travelers Express Co. (now MoneyGram International). Berry is currently a Member of the Board of Directors and Audit Committee Chairman for Rapid7, a privately-held security software company based in Boston, Mass.

ade statewide data system

IO Raises $260 Million in Financing

IO, the global leader in software-defined data centers, today announced the closing of a new $260,000,000 multi-year credit facility led by Wells Fargo. IO’s existing bank group, consisting of Wells Fargo and Mutual Bank of Omaha, has been expanded to include Bank of America, Bank of Montreal, JPMorgan Chase Bank, Royal Bank of Canada, National Bank of Arizona, Goldman Sachs Lending Partners and Morgan Stanley Bank.

“We are pleased to have led the charge in this financing for IO, and we look forward to IO’s continued success and growth,” said Frank Pizzo, managing director and head of the Loan Syndications and High Yield Debt Capital Markets group at Wells Fargo Securities.

“This new credit facility will help IO to continue to design, engineer and deliver the world’s leading software-defined data center technology,” said George D. Slessman, IO CEO and Product Architect. “Our IO Intelligent Control® platform solves the data center needs of our customers in an efficient, scalable and cost-effective manner. We are pleased to continue our relationship with Wells Fargo and Mutual of Omaha, and welcome the new members of the bank group to IO.”

Wells Fargo Securities, BMO Capital Markets, J.P. Morgan Securities, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets served as joint lead arrangers.

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IO Closes $90 Million In Funding Led By New World Ventures

Phoenix-based IO, the leading provider of next-generation modular data center technology and services, today announced it has raised $90 million in equity from a group led by New World Ventures, a Chicago-based venture capital firm focused on technology innovations that fundamentally change markets. Existing IO investors also participated in the funding.

“From the moment we saw this product, we knew it would revolutionize the industry,” said Chris Girgenti, New World Ventures managing partner and newly appointed member of IO’s Board of Directors. Girgenti added: “Designed from the ground up, IO delivers world class data center infrastructure capacity at substantially lower capital cost, with significantly shorter lead times, while providing industry leading energy efficiency. Led by a terrific and deep team, IO is set to make some big waves.” The New World Ventures investment of $50 million is the largest single transaction in the fund’s 15-year history.

IO delivers Data Center 2.0 technology to the world’s largest enterprises, governments and service providers. Data Center 2.0 solutions enable organizations to shift from real estate-embedded infrastructure to efficient, sustainable, and software-driven modular installations. IO’s Data Center 2.0 products and services allow companies to implement only the data center capacity they need to support business requirements, while also providing the ability to add more capacity quickly without IT downtime. IO’s integrated hardware and software technology enables significant operating and capital expense savings and supports energy conservation initiatives.

“We are very excited to have New World Ventures as an investor and partner,” said George D. Slessman, IO chief executive officer. “With this round of capital investment, we will expand our sales footprint globally and position IO as the global leader in Data Center 2.0 technology.”

data centers

Data Centers Flock To Metro Phoenix

More developers of data centers where companies store equipment for online communications are choosing Phoenix for their real-world destination.

The Arizona Republic reports analysts say geographic and economic factors are making metropolitan Phoenix a top-10 market for data centers.

Analysts speaking at a seminar in Chandler on Friday say the area offers low taxes, cheap energy and is close to West Coast markets. They also say Phoenix is considered a city that has low risk of natural disasters.

Cincinnati Bell Inc. began construction in May on what is slated to be the largest data center in metro Phoenix. The 1-million-square-foot facility in Chandler will provide information-technology needs to large companies in the West.

Analysts say there are 32 major data centers in total in Phoenix.