Analyst: Michael Levy 12 Sep, 2013

The datacenter that’s still colloquially referred to as LIDARC (Long Island Data and Recovery Center) has changed hands twice over the recent years. First, it was acquired by German provider ancotel in July 2010. Subsequently, Equinix purchased ancotel in May 2012; however, ancotel USA (basically LIDARC) was not included in the deal. Dan Lunde, former LIDARC, and prior to that, Ancotel, employee, purchased the asset and rebranded it as 1025Connect and renamed the datacenter LI1. Ancotel had ambitious plans for the facility; however, those were put on hold for 18 months leading up to the Equinix acquisition. 1025Connect has taken the datacenter out of stealth mode and is emphasizing two unique connectivity attributes the facility offers: it is the first hop away from Level 3 Communication’ trans-Atlantic subsea cable landing station and offers Manhattan bypass to New Jersey thereafter.

The datacenter is located in a 219,000-gross-square foot property – 1025 Old Country Road in Westbury, New York. The company currently has 5,000 square feet of operational capacity built out that is roughly 50% utilized. The provider has the ability to augment operational capacity to 45,000 square feet under its current lease with opportunity to take down more space in the mixed-use building. 1025Connect has set a goal to build out an additional 4,000 square feet of meet-me room space to attract additional carriers by Q2 2014. A single 800kVA Caterpillar generator and 375kVA of N+1 UPS power with systems manufactured by Emerson Liebert support the critical IT load. Emerson Liebert HVAC units provide 120 tons of N+1 cooling for the IT environment.

1025Connect is a pure-play colocation provider. Considering the moderate design power density – about 125 watts per square foot – the company is not in the market for power-dense workloads. Rather than playing in the price competitive market for such prospects that often go to datacenters in New Jersey, 1025Connect seeks business from firms that appreciate its unique positioning in the greater New York City connectivity landscape. The average tenant consumes between 1 and 2 racks. Verticals include financial trading, carriers and local systems integrators. About 6 of its 20 customers are headquartered in Long Island. Many customers have chosen the facility to leverage Manhattan bypass connectivity, which available from Lightower and Level 3 (each with two separate offerings). After the rebranding, 1025Connect has been emphasizing the opportunity for customers to rent roof rights, since wireless connectivity is expected to gain popularity in the area, particularly for financial trading. The datacenter is the highest point in the vicinity, 110 feet above sea level, outside the 100-year flood zone. During Hurricane Sandy, the company ran successfully on generator power for 98 hours and received ample fuel delivery each day.

Competition
451 Research identifies 51 datacenter providers in New York, with Digital Realty Trust having the highest market share in terms of operational square footage in 4 datacenter facilities in New Jersey in addition to a presence in notable carrier hotel 111 8th Ave. downtown. Digital Realty’s datacenter space is highly utilized and the company has purchased a new property to expand its presence. New York has 9 of the top 10 North American datacenter providers including Equinix, Digital Realty Trust, Savvis/CenturyLink, SunGard, DuPont Fabros Technology, AT&T, Verizon Business, Level 3 and CoreSite.
1025Connect rarely experiences pressure from players outside Long Island. Therefore, the company mainly runs up against Webair in Garden City and Best Buy’s mindSHIFT Technologies.

The 451 Take
Much like Open Data Centers and Amerimar/Newby’s 325 Hudson, 1025Connect is segmenting itself from the traditional NYC market that is rather price competitive, particularly in the suburbs, by addressing the low-density, connectivity-sensitive market. With the rise of massive content distribution entities, such as Netflix and Spotify, these facilities are well positioned to receive points of presence from these companies. Since its inception in 2008, 1025Connect organically gained traction with financial trading. We expect that content will be its bread and butter going forward.
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Company: 1025Connect 

Other Companies: ancotel, AT&T, Best Buy, Caterpillar, CenturyLink, CoreSite, Digital Realty Trust, DuPont Fabros Technology, Equinix, Liebert, mindSHIFT Technologies, Netflix, Newby, Open Data Centers, Savvis , Spotify, SunGard, Verizon Business, Webair Internet Development

Analyst(s): Michael Levy 

Sector(s):
Data centers & facilities / General
Hosted services / Colocation