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September 2018

Conduits & Flexibility Keys to Cost Efficiency at DataGryd’s 60 Hudson Street Hub

Conduits & Flexibility Keys to Cost Efficiency at DataGryd’s 60 Hudson Street Hub

Data centers generally don’t come with much personality or pizzazz.

But the DataGryd data center at 60 Hudson Street in New York City has a rich history behind it.  A registered landmark of the City, the building’s history mirrors the progress of communications.

First opened in 1930 — a year before the Empire State Building was completed — 60 Hudson’s first owner was Western Union, who operated a massive telegraph operation there. 

When companies had a telegram to send, the typewritten message would be loaded in a small canister and then pushed by air through a network of pneumatic tubes connecting various buildings across New York.  As the messages arrived at 60 Hudson, women in roller skates would pick up the messages and skate them over to telegraph operators working on the other side of the building.

Many years later, of course, 60 Hudson became a telecom switching center for AT&T and then the first home of Telx, now Digital Reality Trust (DRT), who is still the anchor tenant in the building.

I recently spoke once again with Tom Brown, DataGryd’s CEO, who previously briefed me on the extraordinary engineering and environmental upgrades that have occurred in the past few years at 60 Hudson.

In this interview, Tom discusses key trends that impact 60 Hudson such as: IoT and 5G/small cell, lowering cross-connect costs, SDN ramp-up, and the greater data center versatility required by cloud and communications providers.

Dan Baker, Editor, Top Operator: Tom, what do you see as the principle opportunities for growing DataGryd’s business?

Tom Brown: Dan, I’d say there are many factors pointing to substantial growth.  New cloud providers and unicorns are emerging.  SDN excitement is creating new choices and is spiking demand for enterprise-on-demand services.  Then there are the wildcards — 5G, AI and IoT — that could spike demand to far higher levels than we see today.

It’s all about the customer experience.  I just came back from a big conference where the main theme was improving the “customer experience”.  They made the point: each person has four or five devices they need to connect: a smartphone, an iPad/tablet, laptop and a watch.  So it’s going to be an unbelievable challenge to deliver that customer experience and to do it flawlessly.

So it will be very costly to deliver on that promise.  That’s why cloud and communications providers are looking very carefully at their PoP strategies and ranking data centers on their ability to fulfill future needs.

As they look for the right data center partner, they want diversity and hundreds of providers in the building to connect to.  This is why we think the pendulum is swinging our way.

With the new cloud and SaaS players and new connectivity demands, that puts pressure on cross connects and data center versatility.

Absolutely.  In recent years, the costs of managing cross connects has become a big burden.  If you look at the content/cloud providers in our building, these companies are increasing the number of connections they make.  Yet even though there are more connections, the costs have not come down.  In fact, for almost a decade now they’ve been priced pretty consistently.  The result is that cross connect costs are eating into customer margins.

Now, over the last couple months, we’ve seen some real interest in our ability to give customers an alternative to the traditional cross connect.  Our idea is to provide access via our direct connect utilizing conduits dedicated to a customer inside 60 Hudson.  So whenever a provider wants to partner with someone else, we will provide them with their own conduit for a nominal charge compared to traditional monthly cross-connect fees.

OK, so this direct connect capability makes 60 Hudson more cost efficient.

Yes, and that’s a big deal in New York City because the cost of a similar footprint in a tower across the river in New Jersey costs 30 to 40% less.

If you look at the total cost of ownership, you find that DataGryd provides a price break in cross connects to some of the more advanced high volume partners.  If you are doing a boatload of cross connects with one provider, why not go to a cross connect area to build your conduit and you pay just for the conduit and not the fiber that is folded inside.

While we do provide dedicated connects for a single customer, if someone within our sixth floor needs to go to a particular suite where a conduit is already built, there is the option to approach that customer to see if they would be willing to work out a deal to share the space, saving them both money.

You’ve recently added new capacity at DataGryd.  How does having this conduit capability help you fill that capacity?
60 Hudson Street Data Center

By recently bringing on-line the sixth floor we added another 60,000 square feet to our capacity, which is a total of 120,000 square feet of data center, half of which is sold to our anchor tenant Digital Realty on the fifth floor.  On the new floor, a full megawatt of power is available to be divvied up in chunks of 100 kW, 250 kW, whatever it may be.

We’re in great shape on that sixth floor with full environmentals and power directly connected to the city’s utility.

Another beauty of conduits is when a customer is looking for additional space, that space doesn’t need to be contiguous with the space they already occupy.  With cross-connect costs taken down, the customer can say, “OK, go ahead and build me another cage and I’ll rack and stack our equipment over there.”

Market demand for data center space has also shifted.  For example, you’re not going to see those large — one megawatt plus — deployments because cloud providers and operators are only building out the capacity they need, partly because it’s easier than ever to ramp up or down their capacity at a particular PoP.

This is why we aim to attract customers looking for 100kW and 250 kW suites.  Once again, our new conduit strategy fits right in with lowering operating costs for the smaller customer.

One of the biggest network changes, of course, is the popularity of the new SDN networks.  How has that affected you at 60 Hudson?

SDN is certainly making people rethink their PoP strategy.  It is amazing how SDN players like PacketFabric and Megaport allow you to go into a portal and change your provisioned physical service on the fly.

This capability puts pressure on folks to greater automate and better manage their cross connects.  So we’re now exploring the potential of enabling the automation of those cross connects — it’s something we may offer down the road.

Not only does cross-connect automation help us with the SDN players, it could also help an AT&T.  Maybe a large incumbent doesn’t have a full-blown SDN yet, but they certainly feel the pressure to greater automate a portion of their network.

Great, Tom.  Thanks for this fine update on developments at DataGryd.

Thanks, Dan.  We’re excited about the capacity capability we’ve added.  And business is good.

One of the challenges is simply explaining that even though we’re operating in a historic building, the plant and environmentals here have been totally redesigned and upgraded into something very modern and robust.  60 Hudson Street is one of the world’s greatest carrier hotels.

It’s an ultra-connected building capable of transmitting Zettabytes of data, and DataGryd has the capability to custom-design a data center solution for any customer, ranging from the enterprise to the hyperscaler.

Copyright 2018 Top Operator Journal


About the Experts

Tom Brown

Tom Brown

Tom Brown is DataGryd’s President and CEO, responsible for planning and implementing the company’s strategy, and managing the overall revenue growth of the company.  Tom joined DataGryd in 2018 and brings more than 25 years of leadership experience in start-up, turnaround and high-growth operations.

He has a proven track record of success in strategic and tactical market development, creation of brand awareness and customer relationship management.  Prior to joining DataGryd, Tom led the content, cable, and data center verticals within Windstream’s Wholesale Business Unit.

From 1999 to 2009, he was Senior Vice President of Sales and Marketing at FiberNet Telecom Group, Inc., where he was an integral part in the sale of the company to the Zayo Group.  Tom earned a Bachelor of Science degree from the University of Massachusetts at Amherst.

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