Internet Data Business Targets Financial Industry

Financial service firms usually prefer to run their own data centers. That's no longer the case when it comes to running mission critical applications on the Internet.

"Financial shops are predisposed to outsourcing this type of technology," says Joseph Germanotta, president and chief operating officer of Infocrossing, a subsidiary of Computer Outsourcing Services Inc., which is in the traditional data center business. In January, Infocrossing opened a state-of-the-art Internet Data Center in Leonia, N.J., and plans to open 20 more in the next 24 months throughout the United States. "They will be in cities that demonstrate the economic vitality for placement of Internet activity, basically in manufacturing, retailing and financial services," says Germanotta.

The 30,000 square foot data center, half of which is devoted to the Internet, has raised flooring, fire suppression, 24 by 7 monitoring and a high degree of physical security, as well as multiple telecommunication networks and an open Internet connection. According to Germanotta, today an Internet data center packs as much power into 100 square feet of space as a 1980s' data center did with 15,000 to 20,000 square feet.

One financial customer residing in the Leonia data center provides a toolkit that evaluates bonds that is accessible to multiple financial institutions around the world.

But Germanotta says his firm is building the platform with financial customers in mind, adding that he has a team of IT infrastructure consultants that have worked in the financial arena all over the world.

The Internet data center business is growing rapidly and becoming more competitive. According to International Data Corp., the co-location and Web hosting market generates about $2 billion in revenue today, and is projected to grow to $8 billion by the year 2002.

Though Infocrossing will compete with leading co-location companies like Exodus and Digex, Germanotta says he's creating "kind of a hybrid of both companies" which he views as the next generation. "The trend is to select an Internet data center for co-location and hopefully one that has the customer care capability to get the economies of scale and skill."

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio