Tier 1 Research tours SCITX’s data center operations in Santa Cruz

Santa Cruz, CA, September 18, 2001.

It may seem to some like the wrong time and the wrong place, but SCITX (pronounced Sy Tex), a new carrier neutral web hosting and professional service provider in Santa Cruz is giving it a go. Tier 1 Research had an opportunity to take a tour of SCITX and meet with founder and CEO, Arlin Bleclic (ex-IDC operations manager at Digex and consultant to Verio in the construction of three of their IDCs).

The company has operationalized 5,700 net sqft in its data center space and has sold about 10% of the facility to-date to 10 customers including the largest ISP in Santa Cruz. These customers are generating about $40-50k/month in recurring revenue and 5 managed hosting deals are in the works. There is an additional 12k sqft that can be facilitized at a later date.

SCITX's service strategy is threefold, offering collocation, connectivity and managed hosting for the SME market, and particularly California's Central Coast's SME market. The site has OC-12 connectivity from Verio, and PacBell with connectivity from Sprint on the way. While they are willing to consider supporting just about any technology infrastructure component, it is worth noting that SCITX prefers to custom build the servers and networking hardware for it's managed hosting offering by partnering with two manufacturing companies.

The CEO emphasized his focus on cost conservation and determination not to grow without demand, and this is best reflected in the fact that SCITX has spent less than $1mn in its launch. Given only eight employees and three sales reps, the 14,000 sq. ft. office space seems excessive at first glance, but we discovered that the landlord, University Business Park, is an investor, and that SCITX's cost per sq. ft. is well under $2. We also believe that SCITX does not have a tremendous amount of cash on hand (less than $3mn), and their expansion strategy is as much by necessity as it is by design. SCITX's goal is to be profitable within a year of launch, and given their target market, growth strategy, and cost structure, we believe that this is possible even in the current market.

NOTE: SCITX is a registered trademark. Other company names may be trademarks of their respective owners.

For Further Information:
Benjamin Toker
831.471.2732
ben@scitx.com