01/29/13 – 451 Research Starts Coverage of Provdotnet

Project Description

Prov.net sees strong demand in Providence

Analyst: Kelly Morgan 29 Jan, 2013

We have been hitting the datacenter trail in New England and recently went to Providence, Rhode Island, to meet Prov.net executives and tour the firm’s facilities.

Prov.net got its start back in 2009. The founders, John Chenard and Ron Sacks (currently CEO), had technology and telecom backgrounds and thought that Providence could use more options for colocation. They ended up leasing space in a former jewelry factory downtown, in an area known as Fiber Alley in Providence and near an older colocation facility with tenants that were anxious to move. So when Prov.net opened its first 2,000-square-foot space that summer, it already had customers. With about half the space filled in just over a year and a growing number of prospects, Prov.net expanded to a building down the street and logically connected both buildings to create a campus, with a second 10,000-square-foot datacenter that is currently just over half built out. The firm plans to finish the remaining space in the next few months.

The Datacenters
Datacenter Prov1 has 2,000 square feet of operational space, or about 45 cabinets, with 475kVA of power. It is located in a section of Providence where there is plenty of fiber, with options from carriers such as Cogent, Cox Communications, Fibertech Networks, Lightower Fiber Networks, Verizon and Zayo Group available. The Prov.net datacenters are on the same electrical grid ‘feeder’ as the main fire, police and emergency response center in Providence, so that particular part of the power network is top priority, and Prov.net has not seen a grid power outage since it launched. The datacenter does have N+2 UPS redundancy and a diesel generator, just in case. Cooling consists of a primary 30-ton CRAC, an alternate 15-ton CRAC and two 5-ton backup CRAC units. The facility is compliant with SSAE16 SOC II. It is essentially full, with more than 40 customers. Prov2 is in space that was previously a telecom operator’s datacenter. It currently has 4,000 operational square feet with 0.6MW of power. It is on track to be 60-70% full by year-end, so work is expected to start on phase 2 in the next few months. When fully built out the facility will have over 8,000 square feet of operational space and just under 1MW of power. This datacenter has biometric access at the entrances and N+1 UPS, plus two generators, 375KVA and 400KVA respectively. The full facility will have redundant 40-ton chillers for in-row cooling and backup, plus three primary 24-30 ton CRAC units and one 30-ton backup unit.

The datacenters are monitored 24/7. Technical staff are on-site during business
hours.

Services
Prov.net is focused on retail colocation and offers options from 1U to ¼ cabinet to multiple cabinets to caged suites. It is also an ISP and carrier neutral so it can either provide blended BGP-IP connectivity for customers, at speeds from 1Mbps to 10Gbps, or customers can use a carrier of their choice. There is also substantial dark fiber available to the buildings, over 700 strands. As for managed services, the owners of Prov.net have past

Demand
Prov.net has targeted local small and medium businesses – particularly those requiring significant bandwidth, SSAE16 SOCII controls, and ‘big-data’ deployments – as well as telecom providers. So far it has found plenty of demand, notably from firms offering cloud and related SAAS services. Its customers include ASi (formerly Rhode One Technology), Clear Channel Communications, T-Mobile, and 7-Eleven, as well as some larger businesses that use Prov.net’s sites for both production and backup/disaster recovery. Prov.net management noted that the firm plans to expand beyond Providence, mainly in response to customer demand, as its clients look to implement backup products and disaster-recovery plans.

Competition
The only other colocation provider we know of in Providence is Lightower Fiber Networks, which has a facility in The Foundry at 235 Promenade Street. Lightower announced in May 2012 that it doubled the size of that facility, so it is clearly seeing demand in the Providence area. Unlike Prov.net’s, that datacenter is not carrier neutral, and we would guess that it does not have SSAE-16 certification yet. In addition, Lightower’s new partner, Sidera Networks, seems to be de-emphasizing colocation services so Lightower may also become less focused on colocation going forward. Further up toward Boston, there are datacenters to the south of the city – ColoSpace has a facility in Rockland, Massachusetts, and Granite Block Global Data Center has one in Fall River, Massachusetts. These, along with other facilities outside of Boston, offer competition, for example as

The 451 Take
Prov.net is planning to expand beyond Providence, most likely to another state in New England. It is also becoming something of a specialist in upgrading older telecommunications centers. This could be an interesting approach, as there are probably quite a few underutilized telecom facilities around, particularly in emerging datacenter markets (those cities outside of the top 10 markets in the US). Their owners might be happy to sell some of the less strategic ones. Wecontinue to see strong demand in general in emerging datacenter markets, particularly from local IT firms, government and healthcare providers. If Prov.net continues to obtain funding, we would not be surprised to see it expand beyond Rhode Island and will be curious to see where it builds next and whether it will fill its space with disaster-recovery services for current customers or find strong local demand in the new location as well.

Project Details