Beyond Server Huggers

"Server huggers" have been the bread and butter for many of the success stories in the colocation and managed hosting sector. These customers are typically small- to medium-sized local businesses who want to save money by outsourcing, but keep their equipment nearby for easy access. In recent weeks, succeeding with these local customers has led to wider benefits for several Southeastern providers.

Springboard Managed Hosting announced this week that it had signed up two new customers: TAG Aviation and Marketocracy. The catch? Both companies are based in California, yet will house their equipment in Springboard's data center in Cary, North Carolina. Springboard's traditional focus, as CEO Rich Lee told us last year, has been local customers in Research Triangle. That's evolving with the addition of TAG and Marketocracy, along with another significant out-of-state customer, New York-based Fortune City Network.

“As we play on a national scale, we are competing with the major telecoms and national hosting companies," said Springboard CEO Rich Lee. "We are finding that Springboard’s debt free position gives us a distinct competitive advantage over these well known, publicly held and heavily financed players with multiple, largely unprofitable data centers scattered across the country and abroad.”

Regional providers with low debt and strong service appear to be increasingly competitive in winning customers performing national searches. An example is NeuStar, the Washington, DC-based Lockheed spinoff which maintains databases for phone numbers and domain names. The company spent nearly a year evaluating 18 data center providers across the country before settling on the Charlotte, NC facility operated by Peak 10.

“By selecting Peak 10, we realized that we could dramatically reduce costs and at the same time, build more security and reliability into our operations,” said Michael Lach, NeuStar's chief operating officer.

Customer access to equipment has historically been a driving force in data center business plans. It's the reason the "chains" of the boom years built facilities in multiple markets, rather than constructing centralized sites and expecting customers to come to them - a strategy that may have worked for IBM, but not many others.

But times are changing, with both providers and customers focused on cost issues. For the right combination of cost, stability and service, more customers seem ready to relax their grip on their servers.