Data centers like Pittsburgh's Expedient Communications continue to grow
The evolution of data centers is pointing in one direction — the cloud.
Data center operators, such as Expedient Communications Inc. in Pittsburgh, are growing as more businesses turn to them to provide the computer infrastructure or hosting services for cloud computing.
The cloud is commonly thought to be the Internet, but it is a more powerful use of computing resources. It is a virtual computer in which information is stored and processed on remote servers, rather than a local computer, and is accessed over a network or online. Racks of servers, operated by companies such as Expedient, use software to run more applications in less space.
Expedient, which claims to be the region's largest data center and cloud services provider, is headquartered in Allegheny Center on the North Side, where it operates one of two local centers that house rows of these computers. The other is in Green Tree. In all, Expedient has nine data centers in six cities and is looking to add more as demand increases, says Shawn McGorry, Expedient's president.
He says the company's growth can be measured by the number of customers it's added in the past six years — from several dozen to more than 1,500. Entry-level clients pay fees of $1,000 to $3,000 a month, while Expedient's largest pay six-figure monthly fees, he said, declining to disclose actual sales figures.
“Our sweet spot tends to be professional services firms like legal and accounting,” McGorry said, and health care companies are being added as the industry grows because of Obamacare.
But the cloud is the center of the action for data center providers.
Despite the name, the cloud is based on a software technology that makes more efficient use of computing hardware. A simple example: It enables a business to run three major business applications, such as accounting, sales and a website, on one server instead of three separate machines. A server is a computer that supplies information to employees and customers over an internal network or the Internet.
“Traditional hardware is not very efficient,” McGorry said. Hardware that uses cloud software — also known as virtualization — “is engineered to make more efficient use of computing resources so less hardware is needed,” he said.
It's been a boon to Expedient, says Bryan Smith, vice president of sales and marketing. “In the last 12 months, I've heard from more customers who want to move to the cloud.”
That's where about 40 percent of Expedient's new business in 2013 came from, McGorry said. The rest was from its traditional services such as leasing space for servers owned by customers, monitoring their operation, making data backups, and network and Internet services, plus custom services to make them run well, he said.
Expedient operates data centers in Baltimore (two), Cleveland (two), Boston, Indianapolis and most recently in Columbus.
“We want to open another one this year,” McGorry said.
A report last month by DCD Intelligence said companies moving their computing to data centers increased 13 percent in the past year, with another 15 percent increase predicted by the end of this year. Analyst Nicola Hayes said in the report that companies want to cut costs and use new technology.
Expedient's roots are in Pittsburgh, but ownership of the company has taken a route to Cleveland and Roanoke, Va., before returning here.
“We're still in the same line of business as the commercial services and data center business of Stargate Industries, which started in Green Tree and was sold to Expedient in Cleveland in 2003 for $2.4 million,” said McGorry, who has been with the company throughout.
He was chief operating officer at Stargate, the region's largest Internet provider from the mid-1990s until 2003 when it filed a Chapter 11 bankruptcy because of competition from national providers. Its other parts were sold, with the biggest, the residential Internet service and 57,000 customers, to Atlanta-based Earthlink Inc.
An investment group owned Expedient in Cleveland, where the headquarters was moved, even though McGorry and other managers ran the data centers in Pittsburgh.
In 2005, the investors sold Expedient to Landmark Media Enterprises LLC of Norfolk, a media company that owns the The Virginian-Pilot, Landmark Community Newspapers and other properties. According to McGorry, Landmark at that time bought 17 data center companies, which it consolidated by 2008 under the Expedient name and put the managers in Pittsburgh in charge, with the headquarters here again. Since then, total employment has increased to 200, including 80 in Pittsburgh.
Observers say Expedient's advantage over national providers such as Amazon Web Services, its Amazon EC2 cloud service and Microsoft's cloud service, called Azure, is that it's locally managed and provides a level of custom service that's harder to get from bigger players.
“We've referred a lot of customers to Expedient,” said Steve Smith, CEO of Plus Consulting in Carnegie, which works with chief information officers in Pittsburgh and other cities.
“Data centers better be alive and functioning 99.99 percent of the time, and Expedient is considered to be among the best in the industry,” Smith said. “And boy is it working; they are killing the marketplace.”
Data centers like Expedient can be more customized than Amazon or Azure allow, Smith said. “Azure is working hard to provide customized services, and it's getting good at it as well.”
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or firstname.lastname@example.org.