Tight data storage presents opportunity

09/08/2013 - 14:47

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Red Cloud founder Garry Henley.

The former head of information technology firm Alphawest Services has launched a new business aiming to cash in on increasing demand for data storage.

Garry Henley has founded Red Cloud, which is building data centres across the country to sell wholesale storage space to existing data centre operators such as Fujitsu, NextGen and Amcom in Western Australia.

Perth has been chosen as the first location for a Red Cloud data centre, with the facility expected to be up and running before the end of the year.

Mr Henley said Perth was an attractive starting point because it lacked enterprise-grade data centres and data centre builds, and the expansions taking place weren’t satisfying increasing demand for space.

That’s despite data centre operators investing significantly in Perth: NEXTDC has spent $80 million on a 3,000 square metre centre at Malaga; NextGen is in the midst of constructing a facility in Shenton Park; and aCure Technology has filled 70 per cent of its third data centre, which opened in October last year.

Mr Henley said the Perth market was struggling because of the upfront investment needed to build traditional data centres.

“The traditional model is that you spend a lot of money, build a building and work to fill it up,” Mr Henley told Business News.

“The problem (data centre operators) all have is that the next key customer or next expansion requires very large capital injection to build a new facility.

“Otherwise, and what happens a lot, is people look for cornerstone customers before building a facility.”

Instead, Red Cloud’s technology works on a modular basis so data centres can be expanded as the space is needed.

“That means that we can open very quickly and we’re very flexible,” Mr Henley said.

“Whether we ramp up to the full size over the next couple of years or it happens quicker – it allows us to optimise our capital and deliver on demand.”

The technology has been licensed from US company IO, which has deployed the modular approach in large-scale facilities, including one in New Jersey of more than 80,000sqm.

Mr Henley said he had no desire to compete with existing data centre operators to attract clients and so opted to establish Red Cloud as a wholesale data centre as a service operator.

He has spent two years sourcing capital from private investors as well as striking a strategic partnership with Macquarie Bank.

The first Perth data centre is expected to cost $20 million once fully expanded, but another data centre will be opened in Perth before the first reached full capacity.

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