Local Data Center Co. Signs First Client, Preps for Expansion
After signing on its first tenant, a local company that operates data centers is eyeing growth and already laying the groundwork for an expansion that would significantly boost its physical footprint.
IronGate Data Centers now operates a 25,000-square-foot building in the west metro and an 85,000-square-foot building in the east metro, although the company said that it isn’t disclosing their locations due to the “sensitive nature of data center tenants and their operations.”
The Minneapolis-based company recently secured its first tenant for the east metro location and is already planning a 270,000-square-foot expansion that will kick off when it secures a major client. (The west metro location isn’t yet operational.)
“We think there’s going to be a significant tagalong effect,” IronGate President Rory Johnson told Twin Cities Business, adding that demand for data centers is growing as technology constantly changes and companies realize that they lack the expertise to run their own.
His company, which is funded by investors, aims to attract “very large users” from the East Coast, and he claims that businesses with operations in that part of the country are seeking a region with fewer natural disasters and an economical operating environment—both of which the Twin Cities offers.
“Data centers are centralized in locations that are subject to hurricanes, tsunamis, volcanos, earthquakes,” Johnson said. Minnesota, by contrast, has “a very cool operating environment and a stable electric grid.”
IronGate bills itself as a “pure-play colocation data center company,” meaning that it manages the data center environment—which includes power, cooling, fire suppression, and the actual building and real estate; the clients themselves manage everything behind their firewalls. The company targets highly regulated industries, like finance and health care, which must follow strict data regulations. Data centers require very few personnel on the premises, and Johnson said each client will probably place just one or two people on site; his company will contract security guards to monitor the buildings.
IronGate’s first tenant occupies about 2,000 square feet and is likely to expand, Johnson said. As soon as the company signs on a tenant that requires at least 20,000 square feet, which is expected in the coming months, the expansion plans would move forward. Johnson already commissioned a rendering of the expansion.
Economic development organization Greater MSP—which aims to attract, expand, and retain businesses in the 13-county metro area—helped IronGate by providing information about incentives and site development and connecting the company with potential clients.
Greater MSP CEO Michael Langley echoed Johnson’s belief that the metro area is ripe for data center expansion.
“We believe the Greater MSP region is ideal for data center operations, given affordable energy costs, low incidence of natural disasters, and attractive new incentives,” Langley said in a prepared statement.
According to Greater MSP, the region is among the country’s 10 cheapest in terms of energy use. The climate allows the use of free cooling for nine months of the year, enabling efficient operations, and there’s no sales tax on electricity, infrastructure, hardware, and software used for data center purposes.