451 Research Report – Prov.net Expands to Boston

Project Description

Colocation provider Prov.net ventures out of Providence, with Boston its first stop

 

JULY 7 2016

BY KELLY MORGAN

Prov.net is opening a new facility in the Boston area, in Chelmsford, Massachusetts. The official opening will be in September, but the firm already has one customer moving in. Prov.Net is the leading provider in Providence, Rhode Island, but saw an opportunity to provide low-cost ‘edge’ space outside of Providence both as an option for its current customers and to target customers in a new market.

 

The 451 Take

Boston has been one of the quieter markets in the US for the past two years, particularly for wholesale. Taxes and power costs are high, so firms often avoid large deployments in the market. However, throughout the US there is interest in setting up locations for data to be stored and processed at the ‘edge’ or outside of the top Internet hubs (such as Northern Virginia and NY/NJ). Boston, with its data-heavy local businesses and Internet of Things startups, could well become an important edge market. Prov.net should be in a good position to target future edge data requirements, while in the meantime providing well-connected datacenter space for IT service and SaaS providers. There are plenty of other potential edge markets in New England, so if all goes well in Chelmsford we expect Prov.net to continue to expand.

 

Context

Prov.net specializes in upgrading older colocation facilities, particularly telecommunication provider datacenters. It has done very well with this model in Providence and is the largest provider there, with three facilities offering about 1.25MW of critical power in total. Prov.net offers retail colocation, with options from 1U to 1/4 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 its facilities, over 700 strands. Prov.net does not provide managed services other than remote hands. Prov.net targets primarily SaaS and IT service providers that want well-connected colocation space at a reasonable rate from which to offer services. Local businesses that seek carrier-neutral colocation are also targets. It is promoting these services as ‘secure-available-connected.’The new facility The datacenter in Chelmsford was originally built by AT&T and was most recently operated by T-Mobile. It has roughly 8,000 operational square feet of space and is designed to house 100 racks. Prov.net has upgraded the power in order to offer 500kW of IT power with 2N redundancy. It has 100 tons of cooling available but that can be upgraded if needed. The facility offers biometric scanners, 24/7 video surveillance and staff on-site in a mini-NOC. It will be SSAE-16 SOC 2 compliant.

Regarding network connectivity, the Chelmsford site is served by Comcast, Verizon, Lightower, TOWARDEX and 186 Communications (a New Hampshire carrier). In addition, Prov.net has acquired dark fiber to set up a diversely routed fiber ring between Chelmsford, its Providence facilities (in ‘Fiber Alley,’the most fiber-rich area in Rhode Island) and the main carrier hotel in Boston at 1 Summer Street (owned by Markley Group). Mass IX will offer lit services over this ring as well as datacenter interconnect (DCI) connectivity to many of the major datacenters in New England, all carriers in 1 Summer and access to both AWS Direct Connect and Microsoft’s Azure ExpressRoute. Latency between the Chelmsford and Providence sites is engineered to less than 5 milliseconds, enabling customers to have active-active replication between them. Prov.net has noticed in Providence a trend for its customers to seek smaller colocation footprints on average but with higher bandwidth requirements. So customers used to lease a full 5kW cabinet with 10Mbps of bandwidth capacity but now lease half a cabinet with 100 Mbps of bandwidth. Prov.net has seen customers pull bandwidth-heavy applications out of cloud and put them into private cloud/colocation because the network costs for cloud were too high.

 

Competition

There are many more competitors in Boston than in Providence, where Prov.net has had the market practically all to itself. However, there are relatively few Boston competitors that offer carrier-neutral colocation without managed services. With its focus on colocation and connectivity, Prov.net is more likely to compete with Markley Group (particularly its new facility in Lowell), EdgeConneX and possibly SunGard Availability Services, ColoSpace or Internap. However, Markley, Internap and SunGard Availability Services tend to target large enterprises, while EdgeConnex has focused on content delivery networks and connectivity providers, although it is aiming to attract enterprises as well

 

SWOT Analysis

Strengths

Prov.net is the main datacenter provider in Providence and having a site outside of the area for backup will be appealing to its current customers. It has been able to acquire its facilities at very good rates and upgrade them, so it can compete on quality and reputation, but also price, if necessary.

 

Weaknesses

As Prov.net expands outside of Providence, scaling its business could eventually be a challenge (it is privately owned and has operated with relatively few staff.) It will also need to make a name for itself in the Boston market.

 

Opportunities

The firm has developed expertise in upgrading older telco datacenters, and there are quite a few of those around the Northeast so if all goes well in Chelmsford, we would expect the firm to expand to other New England markets.

 

Threats

As EdgeConnex expands its target customer base to include service providers and enterprises, it could become a formidable competitor in the Boston market in Prov.net’s niche. However, Prov.net offers connectivity and managed network services that may appeal more to SaaS providers and small local businesses.

 

 

Kelly Morgan

Networks  Markley Group  Mass IX  Microsoft  SunGard Availability Services  T-Mobile USA TOWARDEX  Verizon CHANNELS
Multi-Tenant Datacenter

SECTORS
All / Data centers & facilities / Location, space & real estate

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