Growth of Data Centers in PA Driven By Innovation, Location
Data centers vary in what they do. Some help companies operate during power outages or natural disasters, others provide cloud services such as e-mail and data analysis, while others coordinate mass mailings and store records. Yet all data centers tend to have many computers handling vast volumes of information traveling to and from disparate locations, which requires three things: electricity; stability; and good network connections to the outside world. Pennsylvania has these things and others, which help explain the rise of the local data industry.
Scott Kantner is chief technology officer of DSS Corp.
, a data company founded in 1995 with headquarters in Reading and offices in Wyomissing and West Chester. DSS has about 120 employees, and Kantner ascribes its location to three causes.
"First, if you look at a composite disaster map of the United States--hurricanes, floods, earthquakes--the circle that encompasses eastern Pennsylvania and southern tier New York makes it a good place," he says. "Not a lot of bad stuff happens."
"Second, it’s no secret that the Marcellus Shale gas is here."
That natural gas should allow companies such as DSS to produce their own electricity and use the waste heat to cool, paradoxically, their data centers. After all, data centers pay twice for power: once to run their servers and again to remove the heat those servers generate. Third, Kantner notes Pennsylvanians work hard but cost less than employees in big cities.
Scott Byers, president of Diversified Information Technologies
in Scranton, sees his company more broadly as assisting the information management cycle. He adds another advantage of Pennsylvania: "proximity to large markets--New York, Boston, Philadelphia--while not in the same metro area in case of disasters or power outages."
That proximity works because of infrastructure. Pennsylvania straddles fiber optic networks along the East Coast. The non-profit Keystone Initiative for Network Based Education and Research (KINBER)
will add another 1,600 miles of fiber optic cables by the spring of 2013 to link educational, research, and medical institutions, though businesses are expected to be allowed to piggy-back of that network. Major highways also traverse rural Pennsylvania, providing easy physical access to clients elsewhere. DBSi
, founded in Bethlehem in 1981, has a total of 14 data centers covering 400,000 square feet in Bethlehem, Valley Forge, and Breinigsville. Each site is just a few miles from Interstate 76 or 78.
Pennsylvania also offers old sites suitable to reclaim as data centers. Kantner says DSS was "looking to reduce cost by renovating an existing facility. We took a mothballed bank center and re-commissioned it as a tier III facility." (Data centers are ranked in four tiers by security and stability; tier IV centers must be physically isolated from other uses, unlike tier III.) Directlink Technologies, Inc.
, also in Reading, renovated a 90-year-old knitting mill that was most recently used by a utility. Directlink Technologies now has an 80,000-square-foot data center in that complex and 300,000 square feet of office space.
Perhaps the most interesting reclamation, however, occurred in Boyers in western Pennsylvania, when Iron Mountain
converted an old limestone mine in a mountain into a data center. The mine, never warmer than 60 degrees or colder than 50, significantly reduces the need for air conditioning and offers considerable physical protection. Indeed, Iron Mountain was founded in 1953 by a New York mushroom farmer who realized his old iron ore mine might be more valuable not growing mushrooms but rather offering atomic-bomb-proof document storage. Iron Mountain had about 20,000 employees and $3 billion in revenues in 2010 but declined to discuss its data centers.
Despite the seemingly crowded market for data centers in Pennsylvania, they continue to grow as the demand grows. Both DSS and Diversified Information Technologies are experiencing double-digit annual growth. They also target slightly different markets and try to distinguish themselves from the competition. DSS is moving toward cloud services and tends to work in education and healthcare with mid-size companies. For Kantner, DSS's main difference is service.
"The average business doesn't understand the technical side yet," he notes, "but is shrinking the IT staff. We really have a lot of experience and people with skills in legacy technology who can also go into the new stuff."
Diversified Information Technologies tends to work in finance, insurance, healthcare, and government, fields where data are highly regulated and highly sensitive. Byers explains his company strives to reduce its energy use, which can also protect against disruptions in any one energy supply and improve relationships with the community. More importantly, the company focuses on three areas of excellence: integrating multi-channel information, whether the input is paper, e-mail, online, etc.; continuous availability; and security.
"We have hosts of security certifications which distinguish us in the industry," he says, with 12 or 14 certifications at any given time from federal agencies, individual companies, or other organizations. "That's where the commodity aspect [of data storage and processing] doesn't work, when a breach event can put you on the front page of the New York Times."
Pennsylvania's data centers hope to be there only with good news.
PHOTOS BY BRAD BOWER
DSS Chief Technology Officer Scott Kantner at the Reading facility