QTS: Atlanta Market Is Very Attractive

Quality Technology Services, also known as the acronym QTS, has a dominant position and plenty of room to grow in Atlanta. In aggregate, the company has a whopping 1.3 million square feet of space and 100 megawatts of critical power – in just Atlanta. The company operates huge facilities in downtown and in nearby Suwanee.

The 970,000 square-foot QTS Atlanta Metro Data Center is among the largest data centers in the world. Its scale allows it to offer a range of services from wholesale colocation to cloud and managed services.

There were some reports that the company was building a new data center in Atlanta; however the company executives say this is false. “We have the land, but with the capacity we have currently, we feel very comfortable that we will continue to grow our business,” said Dan Bennewitz, COO sales and marketing.

Jeff Berson, QTS’ Chief Investment Officer noted, “In aggregate, we have 740,000 raised floor, 40,000 potential raised floor, and we have just under 300,000 square feet for development.”

The official stance is the company isn’t building; it has room to grow within its facilities, and does own land for future expansion in Atlanta and beyond.

The company uses its scale and expertise in compliance as its key differentiators. Its scale allows it to offer everything from wholesale space to cloud and managed services within its facilities, making QTS an all-in-one provider. It offers wholesale and retail colocation, as well as cloud and managed services. The services are dubbed C1, C2, C3, with C1 being the wholesale customers, C2 colocation, and C3 cloud and managed services.

The company continues to attract customers from outside Atlanta. For C1 (wholesale), a majority of the clients are not from Atlanta, with C2, it’s about an even mix, while C3 attracts a range of customers all over. “We have some of the largest SaaS, Internet, and social media clients as our customers,” said Bennewitz.

While the company does offer cloud, it’s not uses by a large part of its customer base. “Our cloud and managed services are aimed at enterprises that need highly compliant, secure predictable costs, predictability via a multi-year contract,” said Bennewitz. “Our participation in the cloud market is very tiny. Cloud and managed services are 10 percent of overall revenue.”

In addition to scale, the company believes its other big differentiator is compliance. “We invested in our own compliance office,” said Bennewitz. “It was a big investment. We want to integrate a compliance framework across the organization. Pursuing compliance in silos doesn’t work. So now we have an integrated framework; there’s overlap, commonalities. It differentiates us and helps us.” The company is currently working on FedRAMP compliance so it can better tackle the federal space. The biggest beneficiary of FedRAMP compliance would be its Richmond, Virginia facility.

Customer Trends

“There’s certainly a trend for higher densities, but every customer is different,” said Bennewitz. ”We can accommodate multiple densities. The flexibility that we bring by being able to offer customers different densities, also means we can offer different levels of reliability.” Beyond just Atlanta, the company says the industry will continue to be heterogeneous. Those that succeed will be able to handle the hybrid environment.”

“The other area where customers are becoming more educated is improvement in latency,” said Berson. “We’ve been a recipient and a beneficiary of the growth and maturation of connectivity.”

“We really like the Atlanta market, it’s in the top 10 fastest growing, it’s an attractive location in terms of power, skilled labor force and attractive cost of living,” said  Bennewitz. Over 75 percent of the Fortune 1000 have a presence in the Atlanta market. QTS has succeeded in not only attracting local businesses, but raising the profile of the Atlanta market country-wide.

The company went public in October, and completed an expansion in Atlanta last August, adding 70,000 square feet.