1. DATA CENTER KNOWLEDGE June 23, 2016
While the current cloud data center leasing frenzy
involving the six publicly traded data center REITs in
the biggest markets tends to command the headlines,
it’s easy to lose sight of other major trends in the data
center industry. One of them is the amount of activity in
secondary data center markets.
Example of a company that’s been successful at taking
advantage of that trend is St. Louis, Missouri-based
TierPoint, a private equity-backed colocation, hybrid
cloud, and managed services provider that has quickly
become a force to be reckoned with in the data center
industry. Over the last year or so, it has accelerated pace
and scale of acquisitions, while also expanding through
new construction and development. Most notably, it
recently completed a 70,000-square foot facility on a
15-acre campus in Oklahoma City.
STRATEGY AND FUTURE PLANS
Gartner recently recognized TierPoint in its June 2016
“Magic Quadrant for Disaster Recovery as a Service”
report. As Shea Long, TierPoint’s senior VP of product,
put it in an interview with Data Center Knowledge, the
company sees DRaaS as one of the key “mousetraps”
in its expansion strategy.
Here are the highlights from our conversation:
• TierPoint’s private equity owners are not looking for
an exit. They have a long-term plan for the company,
which is still in growth mode.
• Providing hybrid cloud solutions is the foundation for
TierPoint’s business moving forward, with a marketing
focus geared to mid-size and large enterprise
customers with $100 million to $1 billion and higher
revenues.
• Long said TierPoint’s advantage compared to larger
competitors like Rackspace Hosting and CoreSite, “is a
high-touch local presence in larger secondary markets.”
• On the Disaster Recovery side of the ledger, he touted
TierPoint’s software defined DRaaS solution “as being
a better mousetrap, and a key element of TierPoint’s
expansion strategy.”
• When it comes to new market expansions, TierPoint’s
preference is still to buy a local company and acquire
the data center clients and innovative software
capabilities.
COLOCATION, FEATURED, SERVICES, SITE SELECTION, TIERPOINT
HOW TIERPOINT QUIETLY BUILT A DATA CENTER EMPIRE
IN SECONDARY MARKETS
BY BILL STOLLER
The building at 34 St. Martin Street in Marlborough, Mass., owned by Lincoln Rackhouse,
has 130,000 square feet of data center space and 10MW of critical power capacity.
TierPoint provides data center services at this location. (Photo: Lincoln Rackhouse)

2. DATA CENTER KNOWLEDGE June 23, 2016
ACCELERATING GROWTH
Founded in 2010 as Cequel Data Centers, the company
almost immediately started to acquire local data center
providers in targeted markets. When Cequel acquired
TierPoint’s Spokane, Washington, facilities in 2012, it
chose to rebrand its data center products and services
as TierPoint. At the time, those three data centers in
Spokane boosted TierPoint’s platform from 70,000 to
100,000 square feet.
Subsequently, TierPoint continued to roll up additional
local and regional multitenant data center providers,
primarily in underserved regional markets.
During October 2014, the company logged another
significant milestone when Ontario Teachers Pension
Fund participated in the acquisition of Xand, which added
1,000 customers and greatly expanded the data center
footprint in the Northeast.
In December 2015, TierPoint entered the Chicago
market to service an existing client with the acquisition
of AlteredScale.
In just the past six months, TierPoint has closed on two
major acquisitions, paying $575 million for Windstream
Hosted Solutions, and an undisclosed sum for Midwest
data center provider Cosentry. Cosentry had a staff of
200, which increased the headcount at TierPoint to over
850 employees.
TierPoint now operates 39 data centers, totaling over
600,000 square feet, in 21 US markets located across
18 states.
THOUSANDS OF CUSTOMERS
Perhaps the most impressive result of the roll-up strategy
of buying existing businesses is the number of customer
logos. According to Long, TierPoint now has 5,000
customers generating annual revenues of about
$350 million.
To put that into perspective, interconnection giant
Equinix, the world’s largest data center provider,
currently has about 8,000 customers around the globe.
Connectivity-focused CoreSite Realty, the top performing
REIT of 2015, operates in eight markets and currently has
900-plus customers.
FROM SMALL PLAYER TO NATIONAL PROVIDER
TierPoint has evolved from a small local data center
consolidator to a big-fish player in several regional
markets to a full-blown national provider of hybrid
IT solutions. However, due to the large number of
acquisitions and the need to upgrade legacy facilities,
the available products and services currently varies by
market.
Notably, TierPoint announced in April that it has been
selected by GlaxoSmithKline to support its global data
consolidation and protection initiatives. This was a
concrete example of a DRaaS strategy win and of a deal
that would probably look attractive to some of the big
data center REITs.
If TierPoint hasn’t been on the competition’s radar before,
by now it certainly should be.