365 Data Centers Gets Into Cloud Storage Business

365 Data Centers is transforming from colocation provider to colocation and cloud services provider. Today, it has taken the first step in this transformation, announcing a new local enterprise cloud storage service the company is launching across its entire footprint of 17 data centers.

The company recently raised $16 million in a Series B funding round and secured a $55 million credit facility, which it said it would use for service portfolio and market expansion. This is the first major service expansion.

With the new service the company is hoping to cater to customers who are looking for hybrid infrastructure options. The storage-as-a-service offering will include self-service provisioning and pay-for-what-you-use pricing.

365 tapped Zadara to create the offering. Zadara provides an open platform based on x86 servers, using OpenStack Cinder and Nova for volume management and orchestration, as well as OpenStack Keystone Identity Management.

The service can be privately accessed from within 365 facilities or from a customer's own data center. Customers who are not using the company's colocation services can connect to 365 Cloud Storage via metro Ethernet or metro fiber.

After a customer deploys a physical connection, 365 shares information on the network side to configure private VLAN into the network environment, giving access to the console. From the console, customers can provision storage on-demand, pool those drives into RAID groups, start creating volumes and attach servers to those volumes.

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Keao Caindec, chief marketing officer at 365, said public cloud providers have not been able to "crack the code" in the cloud storage market for enterprises because they require to move applications and data into their clouds. “We believe businesses should be able to connect their enterprise applications and servers to local on-demand storage to support development, testing, QA and production environments securely.”

365 Data Centers’ name comes from the iconic 365 Main colocation facility in San Francisco, now owned by Digital Realty Trust. In 2012, 365 Main co-founders Chris Dolan and James McGrath resurrected the brand by acquiring 16 data centers from Equinix. Equinix was looking to divest some facilities it got through its Switch & Data acquisition.

The company's strategy is to serve small and mid-size businesses in second-tier markets. “We’re looking to expand into more emerging U.S. markets with strong support by the local government and businesses to drive job growth and build technology hubs,” Caindec said.

365 eschews traditional annual colocation contracts in favor of month-to-month agreements.