Austin American-Statesman – Over the past decade, Austin’s computer Data Center business has been through a boom, a bust and, most recently, a steady rebound. Chad Kissinger has seen it all.
Fifteen years ago, he started OnRamp Access Inc. as a pioneering local dial-up Internet service provider. He boot-strapped his way from there into the data center business, concentrating on a broad array of commercial customers.
He expanded and diversified during the 1990s Internet boom, endured the dot-com bust and has steadily been adding customers to his Southeast Austin Data Center since it opened six years ago.
The business has nearly 500 customers of all shapes and sizes.
In September, Kissinger sold the lion’s share — the exact portion has not been disclosed — of his company to a group of investors in a $10 million transaction. He’s still involved in management and works with two new partners, Lucas Braun and Ryan Robinson, who will plot the growth of the business.
Kissinger had been looking for investors for several years to fuel the growth of his business. But he also wanted to retain jobs for himself and his workers. He passed on several offers that would have meant deep job cuts.
Braun and Robinson had worked in technology consulting and investing in California and had formed an investment group to look for a promising business with good growth prospects. They looked for 18 months before they found OnRamp.
They first talked with Kissinger in February and completed the deal after about seven months of study and negotiation. Braun and Robinson have moved to Austin to take an active role in managing and expanding the company.
Braun is CEO, Robinson president and Kissinger vice president of the company, but they describe themselves as the management team.
The new investors liked OnRamp’s approach to the data center business, which involves many more services than the typical Data Center operation.
“It has been growing at double digits (in percentage) through the teeth of the recession,” Braun said.
And they like the Data Center market, which they have studied extensively.
“Humankind continues to create data at an exponential rate, and that is not going to stop,” Braun said. “Any company that has the desire and the need to connect to the Internet, for any reason, from e-mail to hosting a website to hosting applications … needs to be enabled in a smart way, and we provide that.”
Outsourcing computer services is part of a steady trend that has worked its way down from giant corporations to smaller businesses, including retailers, law firms, doctors’ offices, state agencies and other clients that make up OnRamp’s customer base. It has also added a sizable number of Houston companies whose executives saw the wisdom of keeping a Disaster Recovery location for their computers after Hurricane Rita struck in 2005.
All of this fits with national trends, said analyst Rob Enderle with the Enderle Group in San Jose, Calif., who says the recession has accelerated the trend toward outsourcing computer services because companies see it as an efficiency move.
“Companies are looking at services as a way to cover their butts,” Enderle said. “It is less risky to use a hosting service. Laying off people is expensive and disruptive.”
Even small Data Centers the size of OnRamp — which soon will be expanding into 15,000 square feet — talk about using their version of “Cloud Services” as a way of driving growth.
Cloud Computing essentially is the notion that a clump of computing resources — servers, networking and storage — can be efficiently shared for many different tasks.
Some computing companies envision giant Clouds that serve many companies.
But OnRamp and others are backing the concept of “Private Clouds,” wherein one company can rent the gear it requires and have it dedicated to its needs.
The growth of cloud services, Enderle said, is an extension of the cost consciousness precipitated by the weak economy.
“The big driver is cost savings,” he said. “When the economy is in flux, companies get very value-oriented. And the cost savings involved in Cloud Services is undeniable.”
Other Data Centers in Central Texas are growing, too.
The newest arrival is Houston-based CyrusOne, which opened a 50,000-square-foot data center in Southeast Austin in August.
CyrusOne has close ties to Houston’s oil industry, and some of its clients wanted to have second Data Center location in Austin that would be far enough inland to be well away from hurricanes.
Cameron Brown, who manages the center, said it is being actively marketed to Austin-based companies as well and is already a quarter filled with customers’ equipment, he said.
“One of the reasons we expanded here is, we felt Austin was underserved,” he added.
CyrusOne primarily offers customers a secure location for their servers and redundant electrical power and Internet connections.
OnRamp, by contrast, has always offered a variety of services. It even has a small group of programmers who build Web applications for some customers.
Kissinger, on a tour of his center, shows off a well-stocked tool cabinet that serves both OnRamp’s engineers and its customers.
The cabinet includes a bin of “caged nuts,” the small metal components used in attaching servers and networking gear to the 7-foot-tall equipment racks in a Data Center.
They are a prosaic component, but they are also essential for customers if they haven’t brought their own supply.
Many data centers, Kissinger said, don’t provide the complete set of tools for clients who need to do work on their racks of equipment.
“We have been successful in going beyond the traditional model of a Data Center,” he said.
Robinson, from his investment industry background, appreciates how that happened.
“A lot of that evolved through the simple questions: What can we be doing better, and what can we do for you?”
Customers say they like the approach.
“They are a great Data Center, and we have never had a problem,” said Steve Axelrod, president of Universalnumber.com, a voice-mail service bureau. “They have tools we can use when we are there, all the screws that we need and all the assistance that we could possibly want. It has been very nice working with them.”
Kirk Ladendorf covers hardware technology for the Statesman.