About Cervalis

Cervalis To Warehouse Digital Business Needs in Norwalk

Rob Varnon - CT Post/Stamford Advocate
Monday, August 13th, 2012

Sparked by the continued demand from financial companies and a new surge of need from the health care sector's expansion into digital records, Shelton-based data warehousing company Cervalis LLC said is putting up a multimillion-dollar facility in Norwalk.

"We're in action," Zack Margolis, Cervalis vice president of sales, marketing and business development, said Monday, the same day the company announced it raised $75 million to help fund the new center.

The 167,691-square-foot building will go up at 10 Norden Place, owned by FPG Norden DC, a subsidiary of the Fortis Group. Cervalis signed a long-term lease for the property, as reported in the Saturday edition of the Hearst Connecticut Media publications.

Margolis said the landlord is constructing the shell of the building and then Cervalis' contractor from Long Island will manage the hundreds of workers who will complete the interior of the data center.

The move comes at a pivotal moment in this economy, as many companies have reported holding off on hiring over fears of world economic malaise and concerns about the political direction of the country as the presidential election heats up.

But Margolis said demand for Cervalis' services remain high.

"We provide one of those services that will ultimately save companies a lot of capital and operational expenses," he said. "Instead of them having to spend heavy amounts of capital to build and maintain data centers, they can save that money and move the equipment to us and pay a monthly fee."

Demand remains strong from finance companies, he said, that are looking to trim costs. But he also said health care firms have an increasing need for data storage space as they transition to digital records, which is providing a new and expanding client base. Overall, Margolis said customers are coming from all sectors of the economy.

Cervalis is growing. Since its founding in 2000, the company has added 470,000 square feet of storage space in the tri-state area and has 85 employees in Connecticut. It is also looking to expand beyond the region, Margolis said.

"Our next step is to add data centers in other markets," he said.

Lenders also appear to have faith in the need for data warehouses in the economy.

Cervalis closed on a senior credit facility with several lending institutions Monday and will use the majority of that to cover the construction of the new data center with some of the remaining amount used to refinance old debt.

The new center will have 50,000 square feet of raised floor data center space, with 16 megawatts of utility power and 3,500 tons of cooling capacity, company officials said. It will have generator back up.

This is a round-the-clock, seven-days-a-week business of hosting corporate data and providing other essential information technology services.

Employment at the new facility will not be big, with about 25 direct employees as well as security contractors.

But that's usual for these types of operations, said Henning Seip, president and chief executive of Bridgeport-based SkillProof Inc., a job and talent search firm that also provides market intelligence, especially on Connecticut IT work.

Data warehousing is generally "a lights out operation with nobody in there. ... It's more like a bunker," he said.

These are huge buildings with lots of equipment and heavy security, but not many people.

Overall, the IT sector in the state has been kind of flat, he said, largely due to cuts in finance, which provide the bulk of computer work in the state. He said the big finance cut thousands of jobs and the small number in the data centers is not enough to overcome these losses.

"The stuff has not come back," he said.

Still, new jobs are being created and Norwalk's mayor welcomed the firm to the city, noting this project didn't happen over night.

Friday's announcement "culminates more than a year of planning and effective teamwork involving private and public constituents," Norwalk Mayor Richard Moccia said in a prepared statement.

"Cervalis offers an essential service during this modern technological age and I look forward to the company becoming an important corporate citizen in Norwalk," he said.

Tad Diesel, Norwalk's director of business development, said by phone this is welcome news for the city. He said Cervalis is not receiving any breaks from the city.

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