CHARLOTTE — Dave Jones says he considers himself a marathoner rather than a sprinter when it comes to business.

The strategy is paying off for the founder of Peak 10.

“We are countering recent downsizing trends in our industry by expanding operations,” Jones tells Local Tech Wire. “Year to date, we have increased revenue by 49 percent and have seen our customer base grow by 55 percent in that same time period.”

Interest in data storage, managed services and disaster recovery has soared since the terrorists attacks on 9-11-01. Hurricanes and last year’s ice storm has also helped drive up sales, even as IT spending in other sectors has stagnated. Fears of being hacked or attack by viruses and worms also have helped drive growth.

A few weeks back, I had the opportunity to tour Peak 10’s data center in Charlotte, with Jones acting as the guide. A security system using bio-sensors is only part of the elaborate protective measures the firm has installed. An interesting feature is what Jones calls a “customer vestibule” — a work area for customers within Peak 10’s building where they can get access through laptops to their data but not necessarily walk inside the secure rooms that house rack after rack of servers.

We talked about the state of the firm’s business as well as trends in the data storage and managed services industry. He pointed out that Peak 10’s four data centers (the others being in Morrisville plus Tampa and Jacksonville, FL) are continuing to grow their customer bases. And he alluded to Peak 10’s plans to expand to a fifth market sometime in the future.

Our conversation triggered memories of Jones’ speech when he received the “Trailblazer” award from the Metrolina Entrepreneurial Council.

“One thing I learned very quickly is that I’m not a short-distance guy,” he said that cold, wintry night. “My strength is endurance. I feel like we are at the 20-mile mark in this economy — One word describes what we have — momentum.”

Company is ‘on plan’

Ten months later, he tells LTW: “All markets are on plan. In our original centers, Jacksonville and Charlotte, we have reached profitability. Our newer centers in Raleigh and Tampa are on track and adding new customers at a nice rate. In general, we are seeing increased demand in all markets.”

Jones is especially pleased with the strides Peak 10 continues to make in the Metrolina area.

“The Charlotte data center is cash flow positive and has been for the past 12 months,” he says. “This clearly indicates how our model plays out: Our centers are able to reach positive cash flow early on in terms of capacity and clearly upgrade and expand the capabilities of the center with this success based approach.”

Peak 10, which Jones says has raised more than $20 million in venture capital, is growing strongly in an extremely competitive marketplace. In the Research Triangle Park alone, the firm has at least four significant rivals. But as November drew to a close, the RTP staff excitedly pointed to several contracts being signed, the post recent one being with Raleigh-Durham International Airport for a variety of services.

Trends and observations

Following the tour of Peak 10’s facility, Jones agreed to do a Q&A with LTW about Peak 10 and the data services industry.

What trends are you seeing among new customers and prospective customers in terms of demands and needs?

We are seeing several trends but four come to mind.

1. Existing customers continue to show increased demand for added services and expansion of existing services.

2. Prospective customers are looking to us for more managed services including fully managed, end-to-end services. In addition, having alternative data centers and network access points throughout the Southeast continues to be a positive in the eyes of our prospects.

3. Both existing and prospective customers and especially the small to medium enterprise customers, where much of our growth is occurring, have more interest in security and business continuity solutions as well as the flexibility we offer from basic collocation to fully managed service options.

4.Companies are under increased pressure to comply with HIPAA, Sarbanes-Oxley and other government regulations. They are looking to outsource to improve service levels and/or save money and insure compliance.

What do you see on the horizon as future needs?

We see the ability to add more services to our existing portfolio as driven by customer demand as a specific strength of our company. For example we will deliver new security offerings that are targeted to mid-market businesses in 2004 as well as offer more robust network access solutions to push more services including back-up, replication and exchange management closer to our customers.

We look to 2004 with a great deal of anticipation, but fully expect our growth to be consistent with the economic growth in the markets we serve. Our business has long been one of steady, manageable growth.

Is Sarbanes-Oxley a driver in customer interest in remote data?

Yes, regulations like Sarbanes-Oxley and HIPAA are forcing organizations to insure data integrity, security and availability.

What are the primary drivers for the growth in the storage and data management sector?

The primary drivers are and will continue to be security, data protection (data backup and replication) and government regulation. However, we are seeing a trend towards the need for scaleable solutions for data storage. Organizations are growing more sophisticated in how they use customer data and are deploying technology applications to create large data warehouses. Outsourcing the management of these applications makes sense and we see this as an area of future growth.

What are the drivers for growth at Peak 10 in what is a competitive business?

We operate with a sound financial plan. We understand that our customers are adverse to risk and to that end our business is based on the employment of a scalable model and prudent financial operations. We deploy our capital in a very conservative manner and expect our customers’ success to be based on the same principles. We need to execute at a local level and our management team, top to bottom, must remain committed and involved in the markets we serve to communicate that we are in this business for the long term. Finally we need to continue to live up to our reputation for being a stable service provider that understands its customers’ needs and delivers a high level of value.

Please explain why you chose to go with the bio security sensor system?

Physical security is very serious business to Peak 10. We chose a biometric security sensor system as one of six layers of security required to access our data centers. As with any security system it is the combination of steps that is essential to retard unauthorized intrusion. The biometric system is important but is one aspect of a more comprehensive security plan.

What are the advantages of having the access facility just outside the main data center?

The customer vestibule is a space provided for our customer technicians or other personnel, who have access to the facility, to work from a workstation, make business calls and in essence have a work area away from their offices for planning during their session at the data center. This feature is available in all of our data centers as well as access to a conference room when scheduled with local management.

Can you tell me where you stand on opening a fifth location?

We continue to evaluate opportunities and have meaningful discussion around adding a fifth market.

For more information, visit: www.peak10.com

Rick Smith is managing editor of Local Tech Wire.