Oct. 31, 2002 -- Is your facility best known as an address or a service provider?
That's becoming a more complicated question for carrier hotel landlords, who are increasingly offering services themselves in addition to renting space to service provider tenants.
Carrier hotel developer Wave Exchange said this week that it is combining its building and service offerings under the eXchange banner, and
will rename its flagship property as eXchange at 200 Paul. Wave will also rename its Santa Clara facility, eXchange at 1100 Space Park Drive.
Previously the company maintained separate brands for its Wave Exchange carrier hotels and its eXchange Colocation unit, which provides services in each building.
"We've come to the conclusion that the bulk of the industry doesn't differentiate between colocation and carrier hotels," said Wave Exchange president John Wilson. "Rather than try to promote two different entities, we thought we should merge them for marketing purposes.
"To our knowledge, almost every successful carrier hotel is know by its address," said Wilson, who said only a handful of facilities - including the Westin Building in Seattle and the Technology Center of the Americas in Miami - had been able to establish an identity separate from its street address.
"We wanted to use the address," he said. "But eXchange conveys that we're not just a passive landlord, but provide services as well."
The campus at 200 Paul in San Francisco includes 420,000 square feet of space, with 30 carriers in the building. The site, which includes entitlements to build another 330,000 square feet of telecom space, is 80 percent occupied.
The carrier hotel at 1100 Space Park Drive in Santa Clara has 170,000 square feet of space, and is about 55 percent occupied.
eXchange's business involves three products - data center space, conditioned power solutions and cross connects.
"The business as a whole is strongly cash-flow positive," said Wilson. "Our colo business is break-even, with plenty of upside capacity. The last 18 months have been pretty rough. We've used this time to consolidate as many carriers as we can into 200 Paul."
Wilson says that the imbalance between supply and demand for data center space is somewhat better in San Francisco than Silicon Valley.
"In the Bay Area, the tremendous glut of data center space is quickly being absorbed," said Wilson. "It's being taken off the market."
Wilson hopes that will work to the advantage of eXchange at 200 Paul.
"Ultimately we have plans to build out 1 million square feet " said Wilson. "We believe there will be an extraordinary migration to the Internet for business. Right now, I think the applications have yet to catch up to the bandwidth. I think vacant space is an asset going forward.
"We're convinced this business will stabilize," he added. "I think we're going to see a stronger uptick in 2004. We want to be ready for it."
Wave Exchange and eXchange Colo are both part of the Somerston Group, a British investment firm.