Since 2010, ViaWest has been working hard to dominate the data center market in Utah. Several acquisitions and rapid management growth in the area illustrate ViaWest’s desire to position themselves as the dominant player in Utah. Will these efforts solidify ViaWest’s position as the market leader in Utah or is there still a lot of work to be done?
Let’s first take a look at the timeline of relevant press releases by ViaWest since 2010.
February 9, 2010
ViaWest hires a new Vice President and General Manager of Sales in the Utah Region.
April 20, 2010
Announcement is made about Oak Hill Capital Partners plan to acquire ViaWest.
May 25, 2010
Oak Hill Capital Partners closes on ViaWest Acquisition.
June 29, 2010
ViaWest announces data center expansion in Utah.
August 19, 2010
ViaWest announces a Salt Lake City customer expansion.
August 24, 2010
ViaWest hires a new Senior Vice President of Service Delivery.
September 9, 2010
ViaWest hires a new Executive Vice President of Sales & Marketing.
September 22, 2010
ViaWest hires a new Senior Vice President of Data Center Operations.
September 28, 2010
ViaWest hires a new Senior Vice President and General Counsel.
September 29, 2010
ViaWest announces a Salt Lake City customer win.
October 4, 2010
ViaWest announces the acquisition of the Consonus data center assets in Utah.
November 17, 2010
ViaWest hires a new General Manager for their Texas region.
December 6, 2010
ViaWest announces the acquisition of Utah data center provider, SingleEdge.
January 19, 2010
ViaWest hires a new General Manager in Salt Lake City.
February 15, 2011
ViaWest hires a new Vice President of Marketing.
From the press releases from 2010 to February 2011, we can see that ViaWest not only aggressively expanded their Utah presence, but they also hired new sales, marketing and general managers. For a company that has 21 data center facilities across the United States, it seems that they are focusing a disproportionate amount of effort on the Utah data center market.
Interestingly, on July 21, 2010 it was leaked on a Twitter Engineering blog that Twitter was moving their technical operations infrastructure into a new, custom-built data center in the Salt Lake City area. Local reporting in Salt Lake City indicates that ViaWest was not selected as the data center provider for Twitter.
It seems as though the Twitter leak revealed to ViaWest and Oak Hills Capital Partners who the dominant Utah data center player was – C7 Data Centers – and not SingleEdge, Consonus or Tonaquint.
It is difficult to say whether the Twitter leak motivated the hiring of new management or whether those positions were the result of the recent acquisition by Oak Hills Capital Partners, but between July 21, 2010 and September 28, 2010, ViaWest hired a new Senior Vice President of Service Delivery, Executive Vice President of Sales & Marketing, Senior Vice President of Data Center Operations and a Senior Vice President and General Counsel.
Immediately after hiring the new management team, ViaWest announces the acquisitions of Consonus on October 4th and SingleEdge on December 6th. It could be that the acquisition of Consonus and SingleEdge was a strategic move to prevent C7 Data Centers from acquiring them.
What is yet to be seen is whether C7 Data Centers or ViaWest will acquire other Utah data center providers Fibernet or Tonaquint in a move to expand their customer base and footprint.
After the acquisitions of Consonus and SingleEdge, ViaWest soon hired a new General Manager in Salt Lake City and a new Vice President of Marketing. Clearly, ViaWest is preparing itself to increase its share of the Utah data center market.
Questions remain though, as to whether the acquisitions of Consonus and SingleEdge will pay off. Although SingleEdge has some strong customers, such as Overstock.com, Consonus has been losing some key customers, such as WestHost due to downtime in one of its key data center facilities as a result of a error in their fire systems maintenance. Additionally, with the push for data centers to improve their power consumption efficiency, ViaWest could have to invest substantial capital to upgrade the SingleEdge and Consonus facilities.
It will be interesting to see whether ViaWest tries to acquire C7 Data Centers to further expand their footprint in the Utah market or if they decide to only expand their current facilities or build additional data center facilities.
As Utah becomes more and more attractive to data center providers (because of the low cost of power, low building costs, disaster safe geography and good connectivity) a major data center provider could potentially acquire both C7 Data Centers and ViaWest and leverage Utah’s advantages to up sell their customers a low-cost cloud, data backup or disaster recovery product to their top tier current customer base. But with high data center demand across the industry, moving into a second tier market likely won’t happen until the top tier markets cool. Until then, ViaWest is poised to go head-to-head with C7 Data Centers for the Utah market.