It used to be a utility would read your gas or electric meter once a month. Today in many markets, Black Hills Corp. takes remote readings every 15 minutes, using the data to manage capacity and predict demand.
The growing need for Black Hills and other Midwestern businesses to collect, store and process information is driving growth at Cosentry, an Omaha-based provider of data center storage and managed technology services.
The growth is invisible from outside Cosentry's vast beige building in Papillion. But behind 12-inch concrete walls, a security guard and a series of doors that take a swipe card and a fingerprint to unlock, dozens of electricians have been climbing ladders and shimmying through a subfloor crawl space to wire a room that will house “mission-critical” data of dozens of businesses like Black Hills Corp., many of them local, when it opens in October.
Cosentry is expanding its Midlands Data Center in Papillion three years after the facility opened, building out an additional 15,000 square feet of space in a building identified on the outside only by the letters “MDC.” In July, the firm welcomed a new chief executive officer, Brad Hokamp, who replaced the retiring Mike Steffan. And with recently refinanced credit facilities providing up to $100 million to fund growth, Cosentry aims to capitalize on growing demand for not only its data center space but also for its managed IT services, cloud computing services and website and e-commerce hosting services.
Cosentry's regional data center footprint has grown far from its “humble beginnings” 12 years ago of just 4,000 square feet in the old Southroads Mall in Bellevue.
“Everyone saw it as a mall that was in deterioration, and I walked in and saw the most beautiful building in Omaha,” co-founder Manny Quevedo said, remembering solid walls and below-grade space for computer systems.
Investments from Omaha firms Waitt Co. and McCarthy Capital along the way helped the firm grow; it was sold in 2011 to Boston private equity firm TA Associates but still has its headquarters at 127th Street and West Dodge Road.
2001: With investment from Waitt Co., Cosentry is started by Manny Quevedo and Kevin Dohrmann, former employees of InaCom, the former Omaha Fortune 500 computer dealer that began as a division of Valmont Industries but merged with VanStar of Atlanta in 2000 and later declared bankruptcy. Cosentry creates a data center in Bellevue.
2005: Cosentry, also called IPR Inc., sold its IP Revolution division to a Kansas firm, Choice Solutions. IP Revolution sold voice and data communications services and systems. Cosentry doubles the size of its Bellevue data center and expands to the Kansas City and Sioux Falls, S.D., markets.
2008: Omaha investment firm McCarthy Capital invests in the firm. At the time, Cosentry had 95 employees.
2010: Cosentry cuts the ribbon on the $26 million Midlands Data Center in Papillion, a joint project with Alegent Health, which uses the center to store electronic medical records.
2011: Boston investment firm TA Associates buys Cosentry for an undisclosed amount from McCarthy and Waitt. The local management team continues to operate and have an ownership stake in Cosentry. The firm expands with second data centers in both the Sioux Falls and Kansas City markets.
2013: Cosentry refinances its credit facilities to provide up to $100 million to enable expansion, including the expansion of the Midlands Data Center. Today, Cosentry has nearly 200 employees and six data centers in three metropolitan areas.
Sources: Cosentry, World-Herald archives
The company's workforce has approximately doubled in the last five years to nearly 200, more than half of them in Nebraska, and will continue to grow gradually with the expansion as Cosentry hires more engineers and technicians, Quevedo said.
Today the company has six data centers, including two each in the Kansas City and Sioux Falls, S.D., metropolitan areas. If you use utilities or health care services or do any shopping or banking in the region, there's a chance some of your information has been stored or processed through Cosentry's servers.
Cosentry started with what Quevedo said was a handful of clients and grew to hundreds within its first five years. He said that compliance rules prevented him from sharing specific numbers but that there are now “hundreds of clients in each facility.”
Banks, hospitals, utilities and businesses with e-commerce operations, along with transportation and construction companies, all lease space and buy services at Cosentry, which is a “co-location” data center as opposed to a data center built for a single enterprise.
That's one reason there are no signs at the center — “When one of our clients brings one of their clients here, it's their data center,” Quevedo said.
Cosentry said clients are outsourcing IT functions because of the growing costs and demands of e-commerce.
Tech research firm Gartner said this month that the North American outsourced IT services market will grow 8 percent through this year and see a 6 percent compound annual growth rate through 2017. Data Center Knowledge in early 2012 reported a growing shortage of outsourced data center space as demand outpaces new construction.
“Existing facilities at companies may not have the power density or redundancy,” Hokamp said. “As the customers mature, they need to have that level of reliability and performance.”
Hokamp was most recently the president of Texas cloud computing and managed IT services provider Layered Tech. He has also served as a senior vice president at Savvis, the managed hosting and co-location provider now owned by CenturyLink, and as chief marketing officer at New York data center firm Telx.
He joins Cosentry's board of directors, along with Cosentry executives Mike Polcyn, the chief financial officer, and Derek Gillespie, chief sales officer. Rounding out the board of six are independent directors Ken Schiciano and Harry Taylor, of TA Associates, and Jim Mori, president and CEO of MoriEnterprises, and a former senior vice president of Savvis.
“He just had the perfect experience,” Quevedo said, noting Hokamp's track record of helping midsize firms grow.
Hokamp said Cosentry in coming years will expand its space in existing markets and expand into new markets, focusing on what he said are underserved metropolitan areas in the Midwest. The firm is striving to position itself as the “leader in Midwest data center services,” aiming to be business's “local partner” in those markets.
New services like the ION “virtual private data center” are attracting clients, Quevedo said. The efficient cloud service lets customers buy data center space without owning physical servers. “We call it a slice,” he said, “a slice of someone else's very high integrity machine.”
Cosentry's growing capacity means there is room for new customers and for current customers to expand their operations.
Like other businesses that use Cosentry, Black Hills is shifting from owning its own data centers to outsourcing. The utility used to store data in its own center at its Rapid City, S.D., corporate headquarters but needed more room when it acquired several business units of the former Aquila in 2007.
In 2011, the utility also started using Cosentry for disaster recovery services. Cosentry has a total of 1,200 “work group recovery seats,” where clients' employees can work if their own office is shut down in an emergency.
“We could grow with them,” said Brian Schaben, director of information technology for Black Hills Corp. “They've got the space to accommodate us.”