Blog Post

365 Data Centers scores $16 million to expand its data center facilities

365 Data Centers, a provider of collocated data centers for businesses wanting the benefits of a data center without having to actually maintain a facility, landed a $16 million series B funding round. The Emeryville, California–based startup wouldn’t disclose how much total funding it has received since its founding in late 2012.

365 Data Centers plans to use the cash to purchase potential data center facilities in the U.S. to add to its existing count of 17 centers, said CEO John Scanlon. [company]365 Data Centers[/company] is also looking to develop additional features within the data center for its clients, like backup systems, managed servers and managed firewalls; 365 Data Centers could potentially acquire a company whose technology can help it achieve those goals, said Scanlon.

While the company has some of those features available for clients in its Emeryville facility, it wants to develop more features and roll them out in all of its data centers.

“What you find is that customers bring their core computing gear into the data center, then they look at the data center manager to provide other services,” said Scanlon.

The facilities of 365 Data Centers
The facilities of 365 Data Centers. Source:365 Data Centers

What separates 365 Data Centers from other data center colocation companies like Internap or Equinix (365 Data Centers acquired 16 facilities from Equinix when it was founded) is the startup’s focus on small- and medium-sized businesses (SMBs), as well as its take on pricing, said Scanlon. Whereas most data center colocation companies rely on locking clients into long-term contracts, 365 Data Centers charges clients on a monthly basis, similar to what the cloud providers like [company]Google[/company] or [company]Amazon[/company] do.

“The data center is the last thing to move off from that long-term, arduous 30-page contract,” said Scanlon, in reference to how the pricing models for IT and computing have changed over the years, with more services letting users simply click a button and sign up instantly.

Even though 365 Data Centers specializes in physical facilities, Scanlon believes that many SMBs want hybrid data centers, in which they can maintain their content using their own equipment while also being able to tap into cloud-based applications like those provided by Salesforce.com or use a cloud provider for remote storage.

Existing investors Crosslink Capital and Housatonic Partners led the startup’s funding round. In April, the startup changed its name from 365 Main to 365 Data Centers.

Post and thumbnail images courtesy of Shutterstock user Sashkin.