A provider of data storage for corporations is nearly tripling its space here.
Denver-based Latisys Corp. is set to add almost 100,000 square feet to its data center operations in Irvine, which now occupy about 55,000 square feet of industrial space at 17222 Von Karman Ave.
“We wouldn’t be investing another $15 million to $30 million if we didn’t think it was a good market,” said Tom Panarisi, Western regional vice president of sales for Latisys. “There are a lot of companies that want to outsource here. We feel like we haven’t even tapped the market. We are already almost at full capacity in Irvine.”
The company is taking space in a nearby 93,000-square-foot building on Von Karman in a 13-year lease. Latisys declined to give specifics about the deal. Officials said the company typically takes a long-term lease and then upgrades the building itself.
Latisys provides what’s called collocation and managed services for large corporations. It runs warehouses full of servers and other data storage gear and contracts with companies to store their databases and programs.
The company handles monitoring, cooling and security for the data centers, allowing companies to cut down on costs.
“Our core business is to allow customers to mitigate risks to their data storage,” Panarisi said. “They are not in the data center business. They need to focus on running their own businesses.”
Customers pay Latisys monthly fees based on levels of service. Some customers rent space for their own servers and other equipment. Their technology workers come to Latisys’ data center and work on their gear housed there.
Other companies outsource everything to Latisys.
“We will take on the capital expense and put it in our data center,” Panarisi said. “We rack it, stack it, manage and monitor it. And they pay us a premium for those support services.”
Latisys is part of a larger trend in which data center demands are getting more complex and companies are scrambling to cut fixed costs.
“More companies are looking offsite because they need a more reliable, more robust tenant facility for data storage, which is exactly the market we are in,” said Don Goodwin, the company’s chief revenue officer.
Latisys focuses on customers with fewer than 1,000 workers. They in-clude Standard Pacific Corp., Toshiba America Information Systems Inc. and Edison In- ternational’s Edison Mission Energy, all in Irvine.
Privately held Latisys doesn’t disclose financials. The Business Journal estimates it sees roughly $60 million in yearly revenue.
AT&T Inc. and Missouri’s Savvis Inc. are Latisys’ main local competition.
When Latisys’ new data center opens in February, the company boasts that it’s set to have more local space than rivals here, according to Goodwin.
“With the addition of the second property, we will have about 150,000 (square feet) of data space,” he said. “Our understanding is that (our) other competitors may be at or under 100,000.”
AT&T and Savvis declined to disclose how much space they have at their data centers in Orange County.
Publicly traded Savvis is the biggie in data centers—it sees about $870 million in yearly sales and had a recent market value of about $1 billion.
In the past two years, Latisys has hired two local executives from Savvis, including Panarisi.
Most recently, Robert Martin joined Latisys as the director of data center operations after 10 years as a facilities engineer for Savvis in Irvine.
History
Latisys started life in 2007 as Managed Data Holdings LLC.
A handful of seasoned technology executives backed by private equity money started the business with a plan to buy up data centers across the country.
They initially raised some $100 million from Boston’s Great Hill Partners and New York’s Catalyst Investors.
“We were founded on the prospect that improvements could be made in mid-market data center services,” Goodwin said. “We saw a big opportunity there.”
The holding company’s charge was to pick up small, independent providers of data center outsourcing services that could quickly be integrated.
It was looking for companies to roll up amid a market that was shaking out.
“The idea was that we would acquire some well-run, existing, efficient companies,” Goodwin said. “In addition to providing scale at multiple locations cross the country, we thought we could take on the established providers in the area.”
With each deal, Managed Data picked up seasoned workers and customers.
“We were looking for companies that provide high-quality customer service and have high-quality customer relationships,” Goodwin said. “They were in tune with local needs, they were well run and usually profitable.”
The company got its first data center with the acquisition of Irvine’s InteleNet Communica-tions Inc.
It later bought Denver’s Data393 Holdings LLC, Chicago’s Stargate Inc. and Pryme Technologies LLC in Ashburn, Va.
“Within a two-year period, we raced across the country and acquired a national footprint,” Goodwin said.
During that time, Latisys raised an additional $150 million in debt and other financing to fund the deals and make sure its data centers were up to speed.
The company now has 155 workers, with some 40 in Irvine.
“We are committed and we feel like the market will continue to grow here,” Panarisi said. “We feel like we are in a really good position.”
