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News & Press: Colorado Technology Industry

With data centers on upswing, so is ViaWest

Monday, May 21, 2012   (0 Comments)
Posted by: Catharine Lurie
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With data centers on upswing, so is ViaWest

By Greg Avery Reporter- Denver Business Journal

Friday, May 11, 2012 - Moving ViaWest Inc.’s headquarters from downtown to the Denver Tech Center didn’t just provide room for all its employees: That also enabled it to show some of its success as well.

The data center company’s offices on the top floors of a high-rise warranted new furniture, which ViaWest hadn’t bought before.

But ViaWest’s growing business is well-established enough now that, unlike its early days, little comforts such as new furniture, an office-warming party for employees and other features seem justified, said Roy Dimoff, co-founder, CEO and chairman.

"Having started in 1999 and two recessions later, we couldn’t be more pleased with the data-center industry and where ViaWest is in it,” he said.

ViaWest rode the increasing popularity of cloud computing, computer server co-location and managed IT services to become a 310-employee business, with 180 working on the Front Range.

It’s the largest independent data-center company in Colorado. Its 22 data centers in five states make it one of the biggest privately owned data-center companies in the nation.

It’s been hiring staff and investing in developing cloud computing infrastructure in order to meet increasing customer demand from small and medium-sized businesses.

For the first time, the data-center industry seems as hot as it was during the company’s 1999 founding, said Nancy Phillips, co-founder and chief operating officer.

"Now it’s sort of come into its own, in terms of money pouring into this industry, and outsized demand,” Phillips said. "We feel like we’re really hitting stride — we’re no longer the Rodney Dangerfield of the tech industry.”

The private company doesn’t make its financials public. But based on past figures and growth rates that Dimoff disclosed, ViaWest should generate income of $55 million on revenue of nearly $138 million in 2012, before taxes, debt payments, depreciation and similar expenses are taken out.

It built an 85,000-square-foot data center in Dallas last year. ViaWest just completed a $65 million round of financing it plans to use to help pay for expansion, and to possibly acquire similar companies, Dimoff said.

In the past couple years, it’s looked at 10 companies to acquire but found their infrastructure lacking or the asking price too high, Dimoff said.

In 2013, it plans to build a 100,000- square-foot data center off Parker Road south of Denver, and a similar-sized center in Utah. They will be the company’s fifth data center in each state, bringing its nationwide total to 24.

It’s building centers with enough spare room for future growth. Once its growth, client list and contracts pushes Via West past a $1 billion market capitalization, which Dimoff says is realistic in late 2013, it’ll take a serious look at becoming a publicly traded company, he said.

It hasn’t always been so for ViaWest.

It attracted some outside investment in 1999, but far less than many data-center startups did in what was a red-hot industry. The tech and telecom bust of 2000 put many data-center companies into bankruptcy. ViaWest struggled but survived.

It bought several regional data center businesses at bankruptcy auctions in the next couple years, part of a string of 17 acquisitions.

Many businesses — especially seasonal companies, like ski resorts — need affordable ways to scale up and down their web-based IT systems that handle things such as online sales or account management.

"I can’t imagine there’s a CIO or CTO out there today that isn’t being asked by their CEO or the board, ‘What are we doing with the cloud?’” Dimoff said.

And many other midsized businesses want help managing off-site servers and software applications, or having a data-center site for disaster recovery and data backup.

The Denver area is a nationally known data-center market, due to the rarity of natural disasters, its technology workforce and being the regional junction for the national Internet backbone.

Other data-center companies, such as Denver-based CoreSite and Douglas County-based Latysis, are similar businesses operating data centers in several states.

ViaWest is particularly well-known locally, partly because of Dimoff and Phillip’s involvement.

"They have grown because they’re smart business people and because they’ve woven themselves intimately into the fabric of the business community,” said Steve Foster, president and CEO of the Colorado Technology Association. "They are a connector at all levels.”

ViaWest works with local IT companies, such as Statera, helping them connect with larger companies that are ViaWest clients, Foster said.

ViaWest also has mentored younger tech-industry workers, including entry-level CTA workers, he said.

Phillips is one of three executives involved in the Startup Colorado push to create better supports for new businesses, and she’s a board member of the National Center for Women in Technology, which aims to get more women working in tech fields.

Such involvement may not add directly to ViaWest’s financial results, but it benefits the company, Phillips said.

"The reality is, if you want to live and work in a healthy community, you do what you can to support the infrastructure,” she said. "You’ve got to live and work entrepreneurship, because that’s what creates a great community.”

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