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Company Keeps Its Cool, Lowers Costs

By CIOinsight  |  Posted 04-27-2007 Print
Virtualizing Data Return's data center helped the managed service provider reduce power consumption. That, in turn, allowed the firm to stay competitive with bigger rivals by passing on the savings to customers through affordable rates.

The research firm Gartner last fall ranked Data Return LLC, a small, independent managed services provider, among a handful of leaders in its 2006 North American Web Hosting Magic Quadrant report.

Gartner positioned Data Return ahead of some heavy hitters, including CSC, Verizon Business and Quest Communications International, which also manage information-technology services for customers over the Internet. "It has a track record as a risk-taking visionary with significant engineering expertise and a highly automated infrastructure, including a very good customer portal," the report noted.

Though it's privately held and does not make its finances public, the company says it's had 19 consecutive quarter of profitability, has a client churn rate of less than 2 percent, and has added a number of new customers in recent months, including Burton Snowboards, shipping company Agistix and direct marketing company AB&C Group.

Data Return's current success has a lot to do with how the company responded to several key challenges it was confronting several years ago. Specifically, the company had to find a more effective way of providing processing capabilities for customers such as H&R Block; the tax preparer's business is often seasonal, with the result that much of the infrastructure used to support H&R Block's Web site went unused much of the year. Second, Data Return was seeking ways to improve customer service via a highly available, efficient and high-performing IT environment that would also allow the company to readily roll out new services to its customers.

"For our customers, stability and availability are essential," says Jason Lochhead, the company's co-founder and principal architect. "H&R Block can't be down during tax season, and it doesn't do any good for our services to be up and available if the system is so slow that nobody wants to use it."

Finally, if it was to succeed in a highly competitive market, Data Return had to ensure its services remained affordable, which ultimately meant minimizing power consumption and cooling costs in its data centers.


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