telx to Acquire 56 Marietta

Interconnection provider telx says it will acquire Atlanta's best-known carrier hotel, 56 Marietta Street, as the first step in an ambitious program to expand its interconnection business across meet-me rooms of the nation's top carrier hotels.

The deal follows a period of strong growth for telx, which operates interconnection facilities at Manhattan's 60 Hudson Street carrier hotel. The company's experience in New York has laid the groundwork for expansion, according to CEO Rory Cutaia.

"We believe the time has come to unify and standardize the premier carrier hotel meet-me rooms across the country," Cutaia said. "Step one is to bring the premier carrier hotel meet-me rooms under common control and ownership and create, in essence, a unified grid of networks."

The deal is expected to close in mid-May. Financial terms were not announced.

56 Marietta is owned by Marietta Street Partners LLC, which bought the former Western Union office building in 1999 and redeveloped it for use as a telecom hotel. The 10-story, 160,000 square foot property has 56 tenants, all of which have a presence in the meet me room, nicknamed "The Vault."

Tenants include Level 3, XO, MCI, BellSouth, Global Crossing, Cogent, Qwest, Time Warner and WilTel. The building is also home to a Switch and Data PAIX interconnection facility, as well as the Atlanta Internet Exchange, a peering co-op operating within the meet-me room.

Last month, telx announced that MeridianTelesis founder David Taffett was joining the company to head its mergers and acquisitions activity. Taffett is also the founder and head of The Fossicker Fund, a $100 million buy-out fund. Telx, which was founded in 1997 as a service provider to calling card companies and then transformed into an interconnection business, is coming off a strong 2003 in which it expanded its presence at 60 Hudson to 45,000 square feet of data center space.

telx is not the first provider to pursue a strategy focused on carrier hotel meet-me rooms. In 2001, El Paso Global Networks bought Chicago's Lakeside Technology Center as part of a larger strategy to build an interconnection business. Cutaia says telx' strategy is very different.

"We're carrier neutral," said Cutaia. "El Paso was a network provider trying to sell transport services. We're not. We don't compete with our customers. We really work to promote their business.Their growth is our growth. Everyone's interests are aligned."

Inflow Exceeds Revenue Projections

Managed hosting provider Inflow Inc. this week said it had $5.14 million in revenue in March, capping a first quarter in which revenues were 9 percent higher than the previous quarter, well ahead of the company's internal projections.

As a result, the Denver-based provider said it expects to be hiring again before the end of the year. Inflow now has more than 900 customers, up from 830 at the close of 2003. To support its growth, Inflow projects to increase staff by 10 percent.

The hiring plans are significant because of Inflow's focus on running a lean operation. The company cut staff at the end of 2001, when it centralized some support operations at its 13 data centers in 12 second-tier markets around the country. By last summer, sales had rebounded and Inflow was talking about growth again.

Inflow has given no public indication of interest in an initial public stock offering. It was on course to become a public company in 2000, filing a registration statement with the Securities and Exchange Commission. In October of 2000, as the tech market crashed, Inflow postponed its planned IPO.

CEO Art Zeile has often noted that remaining private placed Inflow in a better posiiton to survive the data center downturn. The company has raised more than $300 million overall, including private equity financing from a group led by First Union Capital Partners. With a growing number of Internet-related companies announcing IPOs this spring, equity investors in rebounding tech firms are pondering exit strategies.

For now, Inflow is pleased to tout its accomplishments. "Based on current trends, we're confident our earnings will exceed our 2004 goals," said Mark Hughes, chief financial officer for Inflow. "We are extremely proud of this accomplishment. It signifies we are successfully providing high quality service to our existing customers and growing our base of new customers. Like the rebounding technology sector that we support, we have continued to grow and remain focused on achieving greater revenue goals."

Collocation Solutions Expands DR Offerings

DALLAS -- Collocation Solutions LLC, a leading carrier-neutral, outsourced data center infrastructure service provider, today announced that they have added COMDEPOT's Virtual Core to their Disaster Recovery and Business Continuity service offering. COMDEPOT will now deliver a new set of managed services to Collocation Solutions customers, including firewall, VPN, intrusion detection and prevention, and routing services, from a single cost-effective platform. Collocation Solutions acquired COMDEPOT in February of 2004. The acquisition was part of Collocation Solutions' strategy to provide superior end-to-end business management solutions for their enterprise clients. The Virtualized Business Continuity Service, including security, network access
and carrier options, allow their enterprise clients to seamlessly connect
corporate headquarters, branch offices, remote users and business partners in
a secure, highly scalable and cost effective manner. Read the full release ...

Data393 Adopts Plesk7 as Standard Panel

HERNDON, Va. -- Data393, a locally owned co-location and managed Web hosting services company, today announced that it has adopted Plesk from SWsoft, the world's leading provider of hosting software, as its standard control panel for new dedicated server, shared and bulk reseller server customers. The decision follows Data393's January merger with Denver hosting companies Huge Hosting and Ventures Online, which brought more than 10,000 customers to its high-end, 6,200-square-foot facility. Located in south Denver, Data393 has connections from eight separate Tier-1 Internet service providers, enabling the company to host even the most complex applications and data-rich Web sites. Read the full release ...

Lexington Acquires Equant Facility

Real estate investment trust Lexington Corporate Properties has bought a Herndon, Va. data center occupied by Equant Inc. as an investment property, the company said last week.

Lexington paid $20.8 million for the two-story, 125,293 square foot building, which includes office space as well as a finished data center. The property, which includes 8.65 acres of land, is net leased to Equant, Inc. through April 30, 2015. The obligations of the tenant under the lease are guaranteed by Equant N.V., which is majority owned by France Telecom S.A.

The property is the twelfth acquired by Lexington and its affiliated joint venture investment programs this year and raises acquisition volume to $291.9 million for 2004.

Lexington Corporate Properties Trust is a real estate investment trust which invests in single-tenant net-lease properties throughout the United States. The Company currently owns and/or manages 125 properties located in 34 states totaling approximately 24.9 million square feet.

Opsware Plans $150M stock Sale

Opsware Inc. is going back to the markets. The Sunnyvale, Calif. maker of data center automation software this morning filed plans with the Securities and Exchange Commission to sell up to $150 million of stock to the public.

In its earlier incarnation as Loudcloud, Opsware filed the last major IPO of the dot-com era. In August 2002 it shifted its focus from managed hosting to software, selling its hosting business to EDS. Opsware's chairman and co-founder is Internet pioneer Marc Andreessen, who helped write the Mosaic browser and was a founder of Netscape. The company's software enables data center operators to more easily provision services and manage patches.

Opsware shares have risen from $4 a year ago to $8.08 in trading late Friday. It becomes the latest in a series of Internet-related companies to announce plans to sell shares, as the technology turnaround makes Wall Street financing more accessible.

The company's filing of Form S-3 with the SEC says Opsware may "issue common stock from time to time, up to an aggregate $150 million. Proceeds will be utilized for general corporate purposes."

Equinix Expands In Ashburn

Equinix has signed a long-term lease for 95,000 square feet of space to expand its data center in Ashburn, Va., the company said today.

The space is adjacent to the company's existing 180,000 square foot facility in Ashburn, and the addition will make the Equinix site one of the largest data facilities in the Northern Virginia Internet corridor.

The expansion is the latest in a series of industry announcements reflecting resurgent interest in data center services, including expansions by IBM and Qwest.

"We are seeing a tremendous amount of customer demand for our Internet hubs and exchange services in the Washington D.C. market," said Peter Van Camp, CEO of Equinix. "With our existing D.C. center approaching 60 percent utilization, this new expansion gives us additional capacity to take advantage of this momentum with minimal capital investment."

Equinix intends to begin placing customers in the center by November 1. The Foster City, Calif. provider said it will invest approximately $5.0 million to make additional infrastructure enhancements to the new space.

In addition to its expanded Washington D.C. area facility, Equinix also operates IBX centers in the New York, Silicon Valley, Los Angeles, Chicago, Dallas, Honolulu, Singapore, Sydney, Hong Kong and Tokyo areas. Today's announcement expands Equinix's global footprint to more than 1.3 million square feet in five countries.

Buyer Sought for Austin Facility

AUSTIN, Texas – The BRS Group Inc. is seeking a buyer for its mission-critical data center at 501 Waller Street in Austin, and has retained Node Com, Inc. to market the property.

The 35,227 square foot facility was engineered to the highest standards by Level 3/Genuity and used until December, 2003 as a Telco POP for downtown Austin. The property includes 6,200 square feet of 18-inch Telco grade raised floor area, 6,600 SF of hardened data center space, 6,600 to 9,500 square feet expansion space and 4,500 square feet of finished and furnished desk space.

The facility can be acquired in whole as a production data center or disaster recovery site. It is equipped to meet the needs of colocation providers and firms requiring space for secure technical operations with support office space, and is attractively finished. Time Warner and SBC have diverse entry OC-48 fiber in the building, with 24 strands of unlit fiber connecting to Level 3 in the telco space.

Interested parties may contact Joe Suppers at Node Com.

Node Com Inc. specializes in mission-critical facilities, and can leverage industry relationships and a powerful network of web sites to locate buyers for data center assets. In 2003, Node Com participated in the marketing and sale of more than $110 million worth of data center facilities through its role as a real estate adviser to WorldCom/MCI and Metromedia Fiber Networks (AboveNet).

Node Com has also accumulated an extensive database of data center and carrier hotels sales, with information about more than $2 billion in property sales affecting more than 14 million square feet of mission-critical facilities. This information offers Node Com clients unmatched insight into recent comparable sales and the factors and trends that influence the value of data centers and carrier hotels in the current market.

Node Com Inc. provides a complete range of services to the data center industry, including facility marketing, real estate brokerage, construction management, colocation services, site decommissioning, equipment disposition and Internet publishing. Node Com was part of the team restructuring real estate assets for WorldCom Inc., and publishes the CarrierHotels.com web site.

The BRS Group was founded in Austin, Texas, in June 2002 as a privately-owned corporation and operates a fully hardened 24x7 collocation and disaster recovery facility on the edge of Austin's vibrant downtown business district. Within this 35,000 sq ft facility BRS offers DataSuites, Recovery-Suites, and SecurOffice™ Suites. The BRS Group's mission is to support leading, Texas-based corporations and government entities by providing high quality, low cost hardened data center and disaster recovery space.

MCI Emerges From Bankruptcy

The largest bankruptcy in U.S. history ended today as the former WorldCom emerged from Chapter 11, rebranded MCI.

The emergence of the huge telecom provider comes 21 months after it sought protection, crippled by an accounting scandal that allowed the company to report billions in bogus earnings. The company, which had more than $103 billion in assets when it filed for bankruptcy, will emerge from bankruptcy with about $5 billion in debt and more than $6 billion in cash.

"MCI's turnaround is a tribute to the human spirit and the amazing will of our 50,000 dedicated employees," said Michael D. Capellas, MCI president and CEO. "This is a symbolic day for MCI employees, who have remained committed to serving our customers. I feel a great sense of pride for all we've accomplished together.

"We are emerging with a new Board and management team, a sound financial position, unmatched global assets, a strong customer base and industry-leading service quality."

WorldCom underwent an enormous restructuring of its real estate assets during its bankruptcy, a process that was managed by a partnership including Node Com Inc., Hilco Real Estate and NAI. CarrierHotels.com, an affiliate of Node Com, participated in the marketing and sale of surplus WorldCom Internet data centers that raised $87 million in three transactions:

• May 23: The 108,336 square foot WorldCom Internet data center in Bridgeton, Mo. is sold at auction for $15.7 million. The buyer is DST Systems of Kansas City, which provides support services for the financial services industry.
  
  
• July 16: The WorldCom center in Somerset, NJ is sold at auction to Wachovia Development for $38.3 million after an auction in which 20 suitors went through 11 rounds of bidding. During the marketing process the facility was leased in its entirety by The Bank of New York, and then sold as an investment property with the lease in place.



• Aug. 5: A unit of MBNA America buys the WorldCom Internet data center in Richardson, Texas (greater Dallas market) at auction for $33 million. MBNA outbid Citigroup, which had been the lead “stalking horse” bidder at $20 million.

Former WorldCom CEO Bernard Ebbers was indicted early last month on conspiracy and securities fraud charges for his alleged role in inflating the value of the company's stock. The charges came shortly after the company's former chief financial officer, Scott Sullivan, pleaded guilty to related criminal charges.

"Our emergence is not the finish line, it's the beginning of a new race," said Capellas. "Somewhere between telecommunications and computing there's a new kind of company, and that's what MCI will be."

LINX Hooks Up With telx

A deal between Internet connection facilities in New York and London will make using the Internet faster and more reliable, the operators of those sites said Friday. Network providers that connect with other carriers at Telx, a major interconnection site in New York, now can hook up with networks in Europe as if they had their own connection at the London Internet Exchange Ltd. (LINX), the organizations said in a statement. Using the transatlantic connections of other carriers operating in London and New York, smaller service providers will be able to set up secure, "tunneled" connections between the two points, the statement said. Read more ...

Blades Present Cooling Challenges

LAS VEGAS - Mark Evanko sometimes has to be the bearer of bad news about data centers. Evanko, principal engineer for facility designer Bruns Pak Inc., has a client who finished a new data center just two years ago. Now they wanted to install ultra-thin blade servers, which can be packed into cabinets by the dozens - or even the hundreds, providing more computing power per square foot of floor space.

The problem: each of those blades generates heat, and the data center can't properly cool the blade-filled cabinets without major design changes. "They have millions of dollars of costs to retrofit that facility," Evanko said at last week's Data Center World conference in Las Vegas.

Blade servers have a reputation for generating more buzz than sales. Vendors have been touting the world-changing potential of blades for at least three years, but the revolution has been slow in arriving. "The fact is, today there's very little (blade deployment)," said Dominic Alcaro, director of Availability Consulting Services at APC, one of the largest vendors of data center cooling equipment.

That's starting to change, driven by enterprise companies' ambitions to consolidate their servers and data centers. And where the enterprise money goes, data center providers follow.

With the focus on blade servers shifting from "if" to "when," retooling data centers to manage higher heat loads was a hot topic at Data Center World, a conference and trade show presented by AFCOM, with numerous panels addressing the design and management issues presented by high-density computing.

The cooling dilemma is a major stumbling block. "I've got customers who won't buy a blade server because they can't cool it," said Gerry Becker, managing director of global services for Aperture Technologies, which makes data center management software. "I don't think people understand the critical nature of this issue."

In some cases, fine-tuning is all that's needed to cool high-density cabinets. For other companies, such as Evanko's client, a retrofit will do the trick.

But others will confront what Ed Koplin calls "irreversibility" - data center design problems that can't be corrected in the physical space available. "High-density configurations leave less margin of error for design errrors, misunderstandings and design flaws," said Koplin, a principal in the Baltimore design firm Jack Dale Associates, which specializes in technical facilites.

The primary issue is targeting the cooling on a small area within a large data center. "The trouble with hot spots is distribution," Alcaro said. "You can make the air as cold as you like, and it doesn't matter if it doesn't get to the servers."

Many data centers are designed with "hot aisles" and "cold aisles" on either side of a bank of equipment cabinets. Chilled air from underneath the data center's raised floor is vented through tiles into the "cold aisle" and through the cabinets containing server equipment. The air emerges from the back of the cabinet into the "hot aisle" and rises to the ceiling, where it is collected and recirculated through the computer room air conditioner (CRAC) units.

That design works fine with traditional cabinets, which contain equipment using about 1.4 kilowatts of power, on average. But that changes once the load exceeds 3 kilowatts, according to Koplin.

Using air flow and fluid dynamics modeling of client facilities, Koplin found that air exiting into the hot aisle from the top of a cabinet often gets recirculated back into the cool aisle, where it re-enters the upper rows of the cabinet.

Evanko has seen the same pattern, with a center's ceiling height being the key factor. "Sixteen-foot ceiling heights allow much better cooling than an identical setup than a lower ceiling height," he said. Evanko cites ceiling height as a key differentiator between the data centers that will be able to handle high-density computing, and those that won't.

It's not just head room above the servers, either, as both raised floors and cabinets are getting higher. The enhanced cooling needs of blade installations may require raised floors as high as 36 inches (as opposed to the current standard of 18 to 24 inches), while some telecom equipment racks are not 96 inches (eight foot) rather than the traditional seven-foot height for web servers.

Which brings us back to irreversibility. "There will be throwaway data centers," said Evanko, who warned that data center managers can no longer afford to put off preparing their facilities for high-density computing.

"This is a significant problem, and will be with us for the near future," he said. "This is not going away. Blades are going to be there."

Qwest Reopens Closed Site

Qwest is reopening a data center in Columbus, Ohio that it shuttered 16 months ago, saying it needs more space due to improved hosting sales. The company will also expand an existing data center in Sunnyvale, Calif.

The Columbus facility is one of eight facilities targeted for closure in a December, 2002 as Qwest curbed its hosting operation. Qwest at one time planned to build as many as 42 CyberCenters, funded partly by a $5 billion strategic alliance with IBM.

The customers never materialized to support those ambitions. But Qwest says sales of hosting services have turned around in recent months.

"Since customer demand for hosting has grown more than 10 percent in the past year, we decided to expand our Sunnyvale and Columbus CyberCenters,” said Cliff Holtz, executive vice president for Qwest business markets group, who emphasized the company's "resolute commitment to Web hosting and our Web hosting services." Qwest recently expanded its offerings to include improved disaster recovery services.

It's a good thing Qwest held onto the Columbus center, retaining the leases on the eight sites closed in the 2002 cutbacks. At the time, Qwest migrated customers into eight CyberCenters in Chicago, Denver, Newark, Tampa, Sterling, Va., Burbank, Sacramento and Sunnyvale.

The additional space in the Columbus facility will be available for customer use immediately and the Sunnyvale space will be available by June, according to Qwest.

Data 393, Internap Expand Relationship

ATLANTA – Internap Network Services Corporation, the leading provider of performance-based routing technology over the Internet, announced today that one of the top business data centers in the metropolitan Denver area, Data393, Inc., has expanded its use of Internap’s high-performance IP services to keep pace with the demands of its growing customer base. Read the full release ...

IBM Buys Schlumberger Centers

IBM says it has bought Schlumberger's business continuity unit in a transaction that will add 40 data centers to its portfolio of facilities.

The expansion by IBM, which already operates about 120 data centers around the world, is the latest sign of growing demand for mission-critical facilities. IBM's facilities needs are driven not only by a growing customer base but its drive towards "utility computing" in which packaged information technology services will be metered and delivered to customers much like electricity, gas and water.

Just last month, Big Blue announced plans to upgrade the infrastructure at 32 of its high-end data centers worldwide with sophisticated software to enable its utility computing initiatives.

Financial terms of the IBM-Schlumberger deal were not made public, but Big Blue officials did report that they expect the acquisition to close in the second quarter.

SAVVIS Wins Afficient Contract

ST. LOUIS - SAVVIS Communications Corp. announced it won a contract to provide managed hosting services to Afficient Corporation, a developer of software that automates registration, payment processing, communication and data management. Afficient, via its brand Signmeup.com, facilitates easy to use, cost effective solutions for thousands of client initiatives each year. Afficient's software and services are used to manage everything from sporting events such as marathons, triathlons and 5K races to seminars, conferences, tradeshows, conventions and professional associations. Read the full release ...

Bronto Moves to Inflow Raleigh

RALEIGH-DURHAM, NC – Inflow-Raleigh, a leading provider of outsourced technology services, announced new client Bronto Inc., an email management software company headquartered in Durham, North Carolina. Bronto’s web-based application enables over 150 organizations in North America and Europe to manage email distribution lists for sending newsletters, surveys and other communications. Bronto not only provides a robust set of list management features, but also enables firms to enhance online brand awareness through professional email templates and better understand customer interests through real-time tracking of mailings. Read the full release ...

Postini Hosts With Equinix

FOSTER CITY, CA - Equinix, Inc. today announced that Postini, Inc., the industry's leading provider of email security and management for the enterprise, will move a portion of its IT infrastructure from a carrier-owned data center to Equinix's Chicago Internet Business Exchange™ (IBX®) center. The move will enable Postini to enhance its redundancy and disaster recovery operations by leveraging Equinix's high-performance data center infrastructure and the industry-leading aggregation of networks available within Equinix's centers. Read the full release ...

Data Vault to Serve Boston Marathon

MARLBOROUGH, MA - For the fourth consecutive year, Northeast Data Vault is the hub of the Boston Marathon's worldwide Internet presence. The company, which has been designated the Official Data Center Service Provider of the Boston Marathon, houses the Boston Athletic Association's web site www.baa.org year-round. But on race day the company's data center in Marlborough is home to additional servers that collect and disseminate real-time information about the progress of the race's 20,000 registered runners. Read the full release ...

Infocrossing Completes Stock Sale

LEONIA, N.J. - Infocrossing, Inc., a provider of strategic information technology and business process outsourcing solutions to large and mid-sized companies, announced today that it completed a previously announced $30.6 million private placement of 2,917,000 shares of its common stock. The Company intends to use the net proceeds of the private placement to finance a portion of the cash component of the purchase price for the publicly announced pending acquisition of ITO Acquisition Corporation, a California corporation doing business as Systems Management Specialists, or "SMS". Read the full release ...

Terremark Raises $10 Million

Network access point operator Terremark Worldwide, Inc. today announced the sale of $10 million in convertible preferred stock, positioning the company to meet up to $3.8 million in short-term obligations.

As of Jan. 31, the Miami data center services company had just $2.1 million in cash remaining, and is losing $1 million a month on its operations. More than $23 million in obligations will come due this year, according to the company's SEC filings. That includes scheduled payments totaling $3.8 million that come due today (April 1) on unsecured notes, payable to SBP Investments, Inc., Caerulea Ltd. and Slivovitz Design Limited.

But the Miami-based developer, which has a history of innovative financing and support from private investors, was once again able to leverage its common stock to defuse a looming cash crunch.

Terremark issued $10 million in convertible preferred stock in exchange for $7.8 million in cash and $2.2 in promissory notes, with $1 million due April 25 and the remaining $1.2 million payable June 1. The preferred shares can be converted into common stock at 75 cents per share, and come with a total of 2.8 million warrants convertible into the common stock at an exercise price of 90 cents per share. Terremark's stock was trading at 74 cents a share in late-morning trading.

The funding follows the most successful year yet for Terremark's NAP of the Americas in Miami, which grew from 63 to 133 customers, signing new data center clients including InterNap, Hostopia, SAVVIS and the Department of Defense's US Southern Command.

Terremark's loss from operations was $4.9 million for the quarter ended Dec. 31, compared to a loss of $6.7 million for the previous quarter.

Lessons from Manchester

Businesses in Manchester, England continue to be affected by a fire in a BT tunnel Monday that damaged phone lines serving substantial portions of the city. At its height, the outage affected 130,000 phone lines, most of which are now receiving at least partial service.

The fire immediately became a source of intrigue and speculation that the fire occurred in a Cold Ware-era underground "telecom bunker" known as the Guardian Underground Telecom Exchange. The facility, parts of which are more than 100 feet undergound, was built to withstand an atomic blast. For the record, BT insists the fire occurred in a separate tunnel unrelated to the Guardian exchange, although numerous UK telecom gadflies say otherwise.

What's not in doubt is that the fire tested the business continuity plans of area businesses. As with every widespread power or telecom outage, the event forced businesses to test their continuity plans and sort out which elements worked well, and identify the areas where reality diverged from the assumptions used to develop the plan.

The excellent British web resource Continuity Central has a post-mortem analysis from IBM"s Robin Gaddum titled Further Lessons Learned From Manchester.

"This incident reinforces the need to select a recovery site location with some care to avoid live and disaster recovery site being affected by the same event," writes Gaddum. "Too often we focus upon distance and ignore other potential risk profiles that do not vary in a linear fashion with distance. Relying upon the same exchange is one example, same flood plain is another example."

Sound familiar? The "distance debate" featured prominently in federal regulators deliberations on disaster recovery guidelines for Wall Street. Business continuity doesn't require reinventing the wheel - just mastering the basics and updating your plan as your business evolves.

Level 3 Buys ICG Dial-Up Biz

BROOMFIELD, Colo. -- Level 3 Communications, Inc. today announced that it has acquired the wholesale dial access business of ICG Communications, Inc. (OTC Bulletin Board: ICGC - News), a Denver-based communications company. Level 3 will pay approximately $35 million in cash to acquire the business, which provides dial-up Internet access to America Online, EarthLink, MSN, United Online and other leading ISPs. Read the full release ...