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Online Tech Gets $20M Investment

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(credit: istock) Technology Report
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ANN ARBOR — The data center hosting provider Online Tech Monday announced plans to add four more data centers to the company’s portfolio over the next 24 months.

Missouri-based News-Press & Gazette Co. has invested $20 million in Online Tech to help it expand into new markets across the Midwest.

Online Tech CEO Yan Ness said the company found the perfect partner with News-Press & Gazette. With experience in traditional media across a number of secondary markets, NPG saw the emerging opportunity centered on the data center business, one of the fastest-growing segments of the economy today.

“Online Tech has built the leading data center operating company in Michigan,” Ness said. “This investment provides us the capital we need to expand our data center business into additional markets across the Midwest.”

Online Tech President Mike Klein said the boundaries of that expansion area would stretch roughly from Buffalo, N.Y. to Cincinnati to Indianapolis to Milwaukee.

Online Tech focuses on two key areas: Mid-sized businesses in secondary data center markets and compliance-focused vertical markets.

According to Rick Kurtzbein at New York City-based 451 Research, many secondary markets are underserved as opposed to the six top North American data center markets (New York, Northern Virginia, Chicago, Dallas, Los Angeles and Silicon Valley-San Francisco), where most of the data center investment has gone in the past few years.

Currently, Online Tech services the secondary market in Michigan with more than 60,000 square feet of data center space between three data centers in Ann Arbor and Flint, with the bulk of its local business from mid-sized businesses with annual revenue ranging from $20 million to $1 billion.

Online Tech has also taken a leadership position in the national market with its compliant colocation and cloud hosting solutions that primarily serve the financial, health care, health IT, retail and e-commerce markets. The company is one of the first to deliver cloud computing solutions that have been independently audited for both HIPAA and PCI compliance providing a key service for the multi-compliance market.

With the additional capital investment, Online Tech plans to expand its footprint into additional secondary markets across the Midwest and additional vertical markets that require both the high level of compliance and excellent customer service that Online Tech uniquely delivers.

News-Press & Gazette is a print and broadcast company operating in secondary markets across the United States. It owns and operates 40 broadcast television stations, four radio stations and 14 publications in Arizona, California, Colorado, Idaho, Kansas, Missouri, Oregon and Texas.

With the advent of digital media, NPG invested more than $2 million building two data centers in its headquarters city of St Joseph, Mo. in early 2012. That prompted its decision to invest in the data center industry more aggressively over the summer.

After visiting a number of data center operators across the Midwest, NPG focused those efforts on Online Tech.

“Online Tech’s culture and execution framework are very similar to NPG, making this a perfect opportunity for NPG,” said NPG executive vice president Bill Severn.

The fit with NPG was just as comfortable for Online Tech’s executive team.

“We chose to partner with NPG from a number of investor groups we spoke with because of the cultural fit between the organizations,” said Mike Klein, President and COO of Online Tech. “The shared Midwest values, focus on customers and employees, and alignment around our win-win approach to business made NPG a great fit as a capital partner.”

Online Tech provides cloud hosting, managed cloud hosting, hybrid cloud hosting, and colocation services. Online Tech Midwest data centers deliver mission critical hosting, backed by independent HIPAA, PCI, SAS 70, SSAE 16, and SOC 2 audits required for its clients to comply with financial, government and industry regulations.

For more information, visit www.onlinetech.com, call (877) 740-5028, or email contactus@onlinetech.com.

More about NPG at www.npgco.com.

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