Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the
October 24, 2001 edition of U.S. 1 Newspaper. All rights
Preparing for Data Disaster
Joe Suppers, founder of the Forrestal Village-based
Node Com Inc., says that before September 11 many companies looked
at remote data centers in the same light that so many homeowners view
flood insurance. "You keep putting it off until you have a
he says. For many businesses in New York City the unthinkable disaster
came. Still numb from the human toll of the terror attacks, they are
also having to grapple with the loss of their vital business data.
Companies around the country, though not directly affected, are aware
as never before of the many ways in which data can be irrevocably
lost, and of what that loss could do to their operations.
So now these companies are looking more seriously at companies such
as Node Com, a firm that brokers space in "telecom hotels,"
the remote data centers that house the data and servers for many high
tech companies. Says Suppers of September 11: "It made everyone
step back and think."
Soft-spoken and conservative, a man who rejected venture capital money
in the fevered days of the late-1990s, preferring to retain control
of his company and grow it slowly, Suppers is not saying there will
be a mass rush to protect data through remote storage. Rather, he
says, "there will be an adjustment in who is looking for
The trend toward storing data off-site had already begun, spurred
on in part by the expense of providing the needed infrastructure in
corporate offices. The events of September 11 will only accelerate
This would be a good thing for the infant telecom hotel industry,
which came into being in large part to serve the burgeoning needs
of Internet Service Providers (ISPs), Internet companies, and the
telecom upstarts born of the Telecommunications Act of 1996, which
mandated competition in the industry. The ISPs needed space all over
the country in which their equipment could connect to subscribers’
phone lines. The Internet companies needed a place to put the servers
that handled their E-commerce transactions. The young telecoms, often
told by the local Bell company that its space, which the
Act said was to be made available to them, was full, needed buildings
to house their equipment. And companies of every size in every
needed room for their increasingly computerized operations.
Space to house servers and telecommunication equipment — lots
and lots of it — was built. Then, in mid-2000, the telecom and
Internet industries fell suddenly, spectacularly, and nearly in
That was just about the time that Node Com, with its niche of matching
data center space to potential buyers and tenants, finished rounding
off its business offerings.
The idea for the company had come to Suppers when he was working for
banking giant HSBC as vice president for corporate real estate. In
a rapidly consolidating industry, HSBC had excess space in its office
buildings. "Part of my job was to get rid of a lot of small
he recalls. He found a solution by turning over the unneeded square
footage to companies looking for a place to park their servers. These
were small transactions, and he found them "a nuisance," but
from them, in 1994, Node Com Inc., now a 10-person company with
in Forrestal Village, was born. Seeing how many companies wanted room
to park their servers, he reasoned that there could be a niche for
a business that scouted out this space.
A 1974 graduate of Penn State, Suppers, who majored in real estate
and marketing, had spent his entire career in corporate real estate,
for General Electric, DuPont, and other corporations, and then for
Marine Midland Bank, which was acquired by HSBC. But he says he always
knew he wanted to start a company.
Upon founding Node Com, Suppers made a call to AOL.
The Internet Service Provider (ISP) was experiencing a surge in
at the same time that Suppers, newly downsized in a wave of banking
consolidation, was testing his business idea. AOL, garnering negative
publicity because its legions of new subscribers encountered only
busy signals when they attempted to sign on, became Node Com’s first
client. "We did 100 transactions for them," says Suppers.
Work for other ISPs, and for phone companies, followed. All need to
put their communications equipment in buildings with fiber optic
high wattage power supplies, commodious ceilings, and strong floors.
Spaces for this equipment are called "nodes," Suppers says,
explaining how his company got its name.
Node Com has retained its niche, earning commissions from sellers
of telecom space on some transactions, and fees for finding space
for buyers in others, and it has added complementary services. Moving
beyond nodes, Suppers says Node Com has added "full blown data
centers and disaster recovery sites." The company also has a
management division and a number of websites. The implementation side
of the business operates under the Node Com name, and the information
side under the name CarrierHotels.com Inc.
Rich Miller is Node Com’s vice president for Internet operations,
and also the editor of (CarrierHotels.com). Miller, a 1982 graduate
of Rutgers, was business editor of the Trenton Times who with his
wife started a website design company, Miller WebWorks, to offer
web hosting and design priced to meet the needs of churches, other
non-profits, and small companies with limited budgets.
One of Miller WebWorks’ clients was Node Com, and that led Rich Miller
to sign on with the company. In addition to being the name for Node
Com’s information business, CarrierHotels.com is a standalone website.
Miller says it is the only comprehensive source for news on the
hotel industry. As such, he says, it draws an affluent audience of
industry decision makers impressive enough to convince advertisers
to pay for a presence on the site.
"It has to earn its own way," Miller says of the website,
and it does. Beyond feeding clients to Node Com, it brings in revenue
from a number of telecom hotels. Miller posts mini-websites for these
advertisers, linking pictures of their facilities, which run down
the right-hand side of the website, to mini-websites listing all of
their attributes, including the detailed technical specs potential
clients look for.
While CarrierHotels.com turns a profit through advertising, Node Com’s
other websites function as business-to-business marketplaces and earn
revenue from fees paid when they facilitate transactions. An example
is Equipment Marketplace (www.datacenterequipment.com). It matches
sellers of data center equipment, including generators, HVAC units,
and uninterruptible power supply equipment, with buyers. There is
no charge for listing equipment for sale, and no charge for browsing.
Node Com makes money only when a transaction takes place. Other sites
— all of which are listed at www.nodecom.com — match buyers
and sellers of data centers and of co-location services.
Last year was a banner year for the websites, and for Node Com as
a whole. The company, profitable from its inception, says Miller,
rode the crest of the telecom hotel wave. Speculators built telecom
hotels as fast as they could. And, says Miller, any number of older
buildings were retrofitted to house telecom equipment. The sudden
need for this space even gave hope to owners of defunct factory
Miller points out that many lie along railroad tracks, and that the
ground along these same tracks has become, in recent years, the bed
for fiber optic cable, an essential ingredient for a successful
As fast as it came — faster — the demand for telecom hotel
space dried up. "The industry evolved slowly," Miller says,
"but a lot of people jumped in at once." Soon thereafter,
Internet companies started failing, and so did many young telecoms.
Telecom hotels were not far behind. Colo.com, for example, is a
California-based company funded by venture capital money, which
amassed 22 co-location centers. When it filed for bankruptcy last
spring it had 170 customers and $360 million in debt.
Despite industry woes, Miller says there are still deals
to be done, especially between companies that need to get rid of
space, and those that want a bargain on that space. "We try to
do market transactions," says Miller. Other companies are busy
fishing in bankruptcy court and at auctions, but Node Com avoids these
sticky arenas. On both sides of the equation, clients, both those
seeking space, and those selling it, have been burned by bankruptcies.
All are now seeking quality, and choosing to do business, where
with strong companies in stable industries.
Node Com’s niche will return to health, Miller insists. He sees audio
and video, including videoconferencing, as big drivers. Only a small
percentage of consumers, variously estimated at 8 to 15 percent, are
wired for broadband. When the "last mile" problem is solved,
and fast Internet enlivens computers, demand will revive, he predicts.
Business people and consumers will meet face-to-face online instead
of traveling, on at least some occasions. And music, pictures, and
even full length movies will be acquired through a modem rather than
a drive to the mall.
Meanwhile, some of the excess space in data centers will be taken
by companies in search of secure, off-site data storage. "We do
talk to a lot of people now who need data back-up," says Miller.
Many companies thought they were too small to spend the money, but,
after September 11, are reconsidering. "They have become more
dependent on computer data," he says. Realizing this, companies
of all sizes are reevaluating their priorities, and deciding whether
off-site data storage, once considered too expensive, might be worth
the money after all. Miller expects that "there will be a lot
of activity from new customers."
Companies already using data centers to back up some operations may
now decide they need to do more. "Some will say `What we have
is enough,’" Miller predicts, while others will decide to invest
in more back-up space.
One thing that is unlikely to change much anytime soon is the location
of telecom hotels. Despite the fact that the terror attacks occurred
in cities, Miller says that is exactly where most of the facilities
have been built, and where they will continue to reside. New York
is the data storage capital of the country, and Washington is in the
top three. Telecom hotels require the kind of bandwidth and power
that is found in big cities, although suburbs that ring big cities
are beginning to power up.
With no hesitation, Miller states his belief that New York City will
remain the financial capital of the world, and an important telecom
hotel center. Suppers agrees, and backs up Miller’s contention that
big cities and telecom hotels go together. Says Suppers, "You
won’t see data centers in the corn field."
— Kathleen McGinn Spring
Forrestal Village, Princeton 08540. Joseph Suppers, president and
CEO. 609-734-7460; fax, 609-734-4366. Www.colocationguide.com
200, Princeton 08540. Rich Miller, editor. 609-243-7525; fax,
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