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Colo Market Competition Heats Up

Peter Radizeski, RAD-INFO

Switch & Data Facilities Co. Inc.’s (NASDAQ = SDXC) initial public offering of 11.7 million shares got off to a healthy start at $17 a share on Feb. 9. The day range was $18 to $22, according to Yahoo! Finance.

Switch and Data needs the money. Since CIO Jim Eddy left the company in 2005,

revenue has dropped, losses have increased and competition is heating up.

In addition, the fraud lawsuits from past landlords are coming up. Sure there are VoIP companies popping up every day, as well as Web 2.0 companies sprouting like weeds, but how many of them actually buy colocation space?

Meanwhile, Google, Ask.com, Yahoo and Microsoft are building huge data centers in the Northwest. Certainly, that will leave plenty of rack space when these giants vacate rental properties for their own homes. What happens to neutral colos then?

I have to wonder what the play will be for GI Partners, which purchased EV1 and Telx.

Peter Radizeski is president of

RAD-INFO

. He can be reached at

peter@rad-info.net

.

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