Joseph Suppers

Rich Miller

Corrections or additions?

This article by Kathleen McGinn Spring was prepared for the

October 24, 2001 edition of U.S. 1 Newspaper. All rights

reserved.

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

disaster,"

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

space."

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

the move.

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

Telecommunications

Act said was to be made available to them, was full, needed buildings

to house their equipment. And companies of every size in every

industry

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

tandem.

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

spaces,"

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

headquarters

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.

Top Of Page
Joseph Suppers

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

subscribers

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

cable,

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

construction

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.

Top Of Page
Rich Miller

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

bundled

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

telecom

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

buildings.

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

telecom

hotel.

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

Brisbane,

California-based company funded by venture capital money, which

quickly

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

excess

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

possible,

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

Node Com Inc. , 116 Village Boulevard, Princeton

Forrestal Village, Princeton 08540. Joseph Suppers, president and

CEO. 609-734-7460; fax, 609-734-4366. Www.colocationguide.com.

Carrier Hotels Inc., 116 Village Boulevard, Suite

200, Princeton 08540. Rich Miller, editor. 609-243-7525; fax,

609-734-4366.

Www.carrierhotels.com.


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