DataBank dials in on data center and colocation in secondary markets

data center
DataBank is capitalizing on the need for more data center and colocation services by serving secondary U.S. markets. (Pixabay)

While there's plenty of data center action by cloud companies in places such as Ashburn, Va., DataBank has taken the road less traveled.

DataBank CEO Raul Martynek said his company is focused on data center and colocation facilities in "secondary" markets such as Dallas, Atlanta and Pittsburgh. All told, DataBank has 19 data centers in nine markets, including Kansas City, Minneapolis, Cleveland, Baltimore, Indianapolis, and Salt Lake City.

DataBank was acquired by Digital Bridge two years ago. Digital Bridge is a communications infrastructure company that has a range of companies under its belt that cover cell towers, small cells, data centers and fiber. Digital Bridge investment firm Digital Colony and EQT acquired Zayo Technologies earlier this year for $8.2 billion.

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"When we acquired the business in 2016, DataBank was in Dallas, Kansas City, and Minneapolis, and they expanded from Dallas into these other markets," Martynek said. "We felt there was an emerging trend around infrastructure in second tier cities. Since then what we've done is typical of our playbook; we look to bring very high quality tier three data center capacity into these markets because we think they're underserved from a colocation quality and supply perspective."

Martynek cited Pittsburgh as an example of how DataBank continues to expand its presence in underserved cities.

"We entered that market through the acquisition of a data center sit from a company called 365 Data Centers," he said."It was a small location, but very strategic in that it was kind of the meet me room in that market. It was the network interconnection point for that market."

DataBank followed up that deal last year by buying a data center from PNC Bank in Pittsburgh, which is among the largest banks in the U.S.

"We acquired their company-owned data center in a sale leaseback transaction where they are going to remain a tenant under a long term lease agreement," he said. "Then we'll be able to re-purpose that facility in the data center so that will give us two locations in that market. We think that is the right kind of solution to allow sophisticated enterprises, content companies and cloud companies to begin to deploy infrastructure in that market."

Last month, DataBank, which has over 250 employees, received FCC regulatory approval for its deal to buy Indianapolis-based Lightbound, which will add two more data centers in the Midwest market into the fold.

Organizations moving their workloads to the cloud and data to the network edge are fueling the need for more data center and colocation facilities. Services and applications such as video, IoT and, at some point, low latency 5G are also driving continued bandwidth consumption.

"We see the edge as already here and we think it's evolving and growing in these secondary markets," Martynek said. "What we see is kind of our customer base of cloud and content companies, and technology businesses beginning to deploy production workloads in these secondary markets where a year or two before they maybe did it from a smaller number of core data center markets."

While Google, Amazon Web Services and Microsoft Azure dominate the cloud the market, Martynek said there's a long tail of cloud and content companies that also need data center capacity and colocation. With hundreds of thousands of companies building software that's consumable over the internet, there needs to be a much wider cohort of cloud companies other than the top three.

"Our view of the edge is it's also going to happen in these secondary markets, and it's going to happen inside traditional data centers because that form factor of traditional data center is imminently more operational, and scalable than some of the other business models such as micro data centers at the base of every cell tower, as an example," Martynek said

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