Analyst: Jeff Paschke
30 Mar, 2012
San Diego-based colocation and private cloud hosting provider ScaleMatrix is adding a second datacenter to its Kearny Mesa campus in the eastern suburbs of San Diego. ScaleMatrix opened its first datacenter in Kearny Mesa in 2011, which has been operational since August. Based on continued strong customer demand, the company is already expanding with a second datacenter facility in San Diego to support continued company growth.
ScaleMatrix’s first datacenter in San Diego is a 50,000 gross-square-foot facility, with over 20,000 square feet committed in less than the first 12 months. Innovations in cabinet design and thermal management have enabled the company to provide high-density datacenter space in the facility of up to 18kW per cabinet in standard cabinets, and up to 30kW in its second-generation extreme density cabinets. Providing clients with these kinds of density capabilities helps them to maximize their hosting investment. The datacenter is designed for quick scalability and on-demand expansions.
The company’s new second datacenter in San Diego is a 46,000-gross-square-foot facility, where it plans to build out capacity incrementally based on customer demand. In addition, ScaleMatrix has a datacenter in Katy, Texas, in StratITsphere’s datacenter to support customers that need to house equipment in the Central US and to enable geographic diversity for disaster recovery needs. ScaleMatrix also has partnerships with CoreSite, Interxion, Level 3 Communications and Global Switch to support customer needs in other global locations.
ScaleMatrix private cloud
Armed with the cloud platform powered by CA Technologies’ CA AppLogic, ScaleMatrix is betting big on private cloud deployment. Aside from providing hosted private cloud offerings, the company has unveiled an integrated cloud platform and hardware stack dubbed Cloud in a Box, which is similar to the likes of VCE’s Vblock and Morphlabs’ mCloud Data Center Unit. Geographically speaking, ScaleMatrix’s primary market is in the US, but it supports customers that require geographical redundancy and diversity by connecting them to datacenters in Europe and Asia-Pacific.
ScaleMatrix’s current revenue mix is weighted heavily on the cloud side, with approximately 70% of revenues coming from its cloud offering and 30% from colocation. ScaleMatrix sees itself more as a cloud provider than a colocation provider. But the company sees providing colocation services as important because not all customers are ready to jump straight into the cloud and by also offering colocation services the company provides for a cloud migration path for customers.
ScaleMatrix sees its cloud services typically having a sales cycle of 30-120 days, compared with colocation sales, which tend to have a shorter sales cycle.
Competition
San Diego has the 17th largest GDP out of the metros in North America and the city has seen steady demand for multi-tenant datacenter (MTDC) services. The economy in the city has a number of drivers, including the city’s deepwater port; hosting the world’s largest naval fleet; a shared border with Mexico, leading to important trade; tourism and the city’s growing number of technology firms providing demand for MTDC facilities, including wireless, life sciences, pharmaceutical research and health services.
San Diego is located about 120 miles south of Los Angeles and 87 miles south of Orange County, so MTDC providers in the city do see some limited competition from datacenter providers in Orange County and even further north in Los Angeles. T1R estimates that approximately 75% of the demand for San Diego datacenter providers tends to come from within a 75-100 mile radius.
T1R identified nine MTDC providers in San Diego during our research of the market last year with a total of 14 active datacenters. American Internet Services (AIS) is the market share leader in San Diego with five datacenters. While local competition for colocation services from regional providers AIS and RedIT exists, ScaleMatrix aims to target clients on a national basis with a combination of traditional colocation services, cloud based hosting, and a growing managed service portfolio. The company sees Rackspace and Layered Technologies as its biggest cloud competitors for private cloud services.
T1R take
Continued demand for its private cloud and colocation services has already led to ScaleMatrix needing to add a second datacenter in San Diego after less than one year. As a relative latecomer to the increasingly crowded cloud computing market, ScaleMatrix is clearly seeing some traction, resulting in the company rapidly expanding its datacenter footprint. T1R believes by delivering an integrated cloud offering with a strong security focus and preconfigured templates, the company will continue to find success, especially the service provider market. On the colocation front, T1R saw San Diego as an underserved market last year and we expect ScaleMatrix will be successful in also finding colocation customers for its new datacenter in a market with a supply/demand imbalance for premium datacenter space.
