Rebooting this Dallas data center nexus taking industry grit

Perhaps it was the odd couple pairing of longtime Dallas executives Clay Hill and David Tordoff — with the help of tens of millions in investment — needed to fully reboot the aging office building turned data center on Live Oak Street into a viable option for data-holding tenants.

After all, it was the two co-founders of Dallas-based Provision Data Services LP that decided to bring their 30-year working relationship to a new adventure, bringing the 1938-built office building turned into one of Dallas’ four telecommunication anchors back to life.

“You can’t buy this type of a location,” Hill, CEO and co-founder of Provision Data Services, told the Dallas Business Journal. “It would cost a fortune to have that capacity sitting right at your doorstep. It sits right on the communications corridor in North Texas.”

That location, coupled with the downtown Dallas power grid, made the opportunity to own the 12-story, 137,000-square-foot building at 2020 Live Oak St. a bit of a no-brainer for the longtime data center execs. And it also gave the two Clearview International leaders — one from Highland Park and the other from Carrollton — their next big adventure.

Earlier this year, Provision Data Services opened the revamped data center to would-be tenants after years of the building being under-utilized. The data center provider kept about a dozen existing telecommunications firms with a presence in the Live Oak Street data center, including Dallas-based AT&T to Verizon to Level 3 Communications.

“We have a diamond in the rough, and I’m really excited about it, which I don’t say that often,” said Tordoff, who is the firm’s COO and co-founder. “This has been a bit of an adventure, but we’re happy with what’s going on here.”

But it hasn’t been an easy adventure, with the charm of the office building turned data center fighting to meet hefty requirements by data centers being built with those in mind from much larger and newer peers in North Texas’ suburbs.

From plans for Digital Realty Trust Inc. (NYSE: DLR) to build a new $1 billion data center campus in Garland to Fort Worth-based Hillwood partnering up with Atlanta-based T5 Data Centers on a new 400-acre data center campus in AllianceTexas to Facebook Inc. (Nasdaq: FB) beginning the next phase of its massive campus in Fort Worth — there’s no shortage of Goliath-sized competition when it comes to data storage in North Texas.

The Live Oak Street data center’s proximity in Dallas’ central business district and its designation as one of four original teleco buildings in North Texas certainly gives it an edge on the competition. The occupancy rate hasn’t pushed past 25 percent, but the co-founders are bullish on the fundamentals backing the data center.

“With our power grid, we are able to provide our tenants with a guarantee of 100 percent uptime, or the availability of their equipment in guaranteed,” said Tordoff, the engineer behind the revamp of the Live Oak Street data center.

“Most other providers guarantee a 95-percent to 99-percent uptime, which, if you do the math, is a considerable amount of down time,” he added.

For some tenants, such as retail-facing tenants, where time is money, this is an important distinction that impacts a company’s bottom line, Tordoff said.

“The further out you get from this nexus, the more switches you have to go through as far as they interconnect and that causes latency,” he said. “We have enhanced communication capabilities because we don’t pass through all those switches up north.”

Provision Data Services has a huge advantage by being at the crossroads for connectivity in North Texas, said Curt Holcomb, a senior vice president at JLL’s Dallas office, who specializes in representing data center tenants.

But not every data center tenants wants the same things, Holcomb added.

“There are a lot of deals getting done in the suburbs, but these are deals where connectivity isn’t necessarily the most important thing,” Holcomb said. “They want to be where they have operators to run them or be in data centers where the customers in them don’t have to operate them.”

Meanwhile, smaller data center tenants, such as retail-facing companies, tend to want to operate in a co-location environment in downtown Dallas for its close proximity to the nexus of connectivity in the region, Holcomb said. And cobbling together smaller data center tenants takes time, he said.

“This data center certainly has potential, and I think it will appeal to the right customer in downtown Dallas,” he added.

For development team rebooting the new Provision Data Services’ data center, it’s only a matter of time. There are just too many benefits to putting big data in downtown Dallas to ignore for the tech-savvy, customer-facing company.

“The downtown grid here is just incredible. Everyone comes through downtown anyway, and customers want to be here because the communications are so fast,” Hill said. “This is far superior to anything up north.”

Read this Dallas Business Journal article by Senior Reporter, Candace Carlisle, here.