<< See All News Stories
Cleveland’s Booming Data Center Business
Data Centers are a booming business in the Cleveland area. Where once Cleveland’s economy was soley based on manufacturing, the city has begun to successfully diversity its economy to take advantage of the internet age. Railroads, the superhighways of the 19th and early 20th centuries, have proven to be the ideal conduit for routing fiber optic cable.
“It’s an infrastructure legacy,” said Kevin Goodman, managing director and a partner in Bluebridge Networks, which has a downtown data center near Playhouse Square and a larger facility in suburban Mayfield Heights.
Cleveland again is a boomtown and hub for high-tech innovation, manufacturing as well as data centers. The economy is diversifying and is uniquely positioned to take advantage of the emerging data center industry supporting the growing high-tech, health-tech economy.
Cisco systems predicts that internet traffic will triple over the next five years and so too will the demand for data centers, especially in Cleveland’s HealthTech Corridor where start-up health-tech companies are clustering.
Hospitals and medical research centers such as the Cleveland Clinic and University Hospitals are prime customers for data centers. Tracey Nichols, Director for the City’s Department of Economic Development, believes these data centers will help expand the 3 mile Health-Tech Corridor (HTC) and enhance one of the region's’ fastest growing research corridors anchored by world-class hospitals, universities and Downtown Cleveland’s Global Center for Health Innovation. In the HTC, $450 million is spent on research annually, 4,000 clinical trials are currently underway, and is the location of 170 health-tech and high-tech businesses.
In addition, information technology companies such as Rosetta and Brandmuscle have come to downtown Cleveland in part because of its high-speed fiber optic data and internet infrastructure, Nichols and others have said.
The data center market across North America had “tremendous growth” in 2015, according to a report by JLL, a global real estate services firm. Multitenant data centers in the United States earned $115.3 billion in revenue last year, a 6.1 percent increase from 2014. Cleveland has begun to successfully capture some of that growth.
While large enterprises may still operate their own data centers, more and more organizations, no matter their size, are getting out of the data center business and have begun to outsource the operations to companies specializing in the sector. According to The New York Times, companies are scaling back their own data centers to focus on their core business. This has led to the rise of multitenant centers that offer data center expertise and security.
As businesses’ need for secure operations and data storage increase, there’s no doubt that data centers are in more demand than ever. Cleveland has been recognized as a great location for data centers due to its high ranking as a location with little risk for business interruption—Cleveland does not have hurricanes, earthquakes, wildfires, floods or other risks for data centers so a growing number of data centers are choosing to locate in and around the City to take advantage of cheap power and an abundance of fiber optic cable.
Bluebridge Networks, headquartered in Cleveland, is a leading total technology solutions provider in the nation with 41,000 square feet of data center and office space and has become the first Ohio based data center with offices in Cleveland, Mayfield Heights and Columbus offering offsite storage hosting and computing power for high data companies.
“We have a very robust fiber trunk that runs through Cleveland, which means excellent connectivity,“ Nichols said.
Ken Parent, CEO of ByteGrid which got its start in northern Virginia, said his company because of that connectivity purchased the Cleveland Technology Center and is spending millions to renovate and expand a small data center near downtown Cleveland into a large one capable of using enough electricity to power large server needs.
Opening last year, SecureData 365, a Top 10 Weatherhead 100 Company, has quickly leased space because of the high demand for their services. The Cleveland facility officially opened May 1st, 2015 and is the largest multitenant uptime institute certified tier 3 data center in the State with 330,000 square feet, with additional room for expansion.
SecureData 365 now has redundancy with their Canton, OH center, which is powered by AEP, while their Cleveland center is powered by First Energy. They also have a unique pricing structure, where customers are only charged for what they use, which means that businesses big and small can afford the security and reliability of SecureData 365’s services.
The capabilities and rich fiber infrastructure of our Data Centers results in a multiplier effect that is creating opportunities that previously didn’t exist in Cleveland. This job multiplier effect is a big reason why the Cleveland Technology Center has received a tax exemption of the 8% sales tax from the State of Ohio, which in turn gives tenants a cost savings on equipment placed in service at their location over the next 15 years. An estimated 2,000 IT professionals call the Cleveland data center “home” to their IT infrastructure.
Additionally organizations with centers in less advanced and areas more prone to natural disasters are also excited to relocate to the Cleveland Technology Center, with its redundant power from two utilities.
Data centers do not create a large numbers of jobs directly, Nichols said, but their existence is a big attraction to companies that use massive amounts of data.
In a Cluster Analysis completed for the City of Cleveland by Mohr Partners, Information
Technology was recognized as an important Cluster for the City of Cleveland. With the addition of the City’s many information technology companies, fast growing healthcare sector as well as Cleveland’s many Fortune 100 companies who require large IT sections, the City of Cleveland now more than ever has become a hub for information technology.
To learn more about the Information Technology Industry in the Greater Cleveland area, download TeamNeo's single sheet here.