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Checking into a fiber hotel: Businesses inside, outside Granite Tower seek tech edge in Billings
Many businesses could use more communications technology. But, often the price tag on the latest equipment is too high.
by David Burgess – Western Business News
Seeing an opportunity, some in the commercial real estate field are capitalizing by bringing in large communications "pipes" into their buildings for tenants to tap into.
With such value added to Billings properties, businesses gain a technological edge and the area becomes more attractive for companies looking for a new location.
Perhaps the most prominent example is the 10-story Granite Tower downtown, "probably the best connected building in the state," said Mike Sheard, director of operations for iConnect Montana.
The technological brain in the building is a "fiber hotel" occupying about 2,700 square feet on the third floor, built and operated by Helena-based iConnect Montana. In the fiber hotel, tenants can locate their servers and get the protection of secured entry, backup power and a specialized fire suppression system. They can also use space in the fiber hotel’s racks and get access to fiber optic lines converging there.
As a telecommunications hub for a wide region, there are even more businesses outside the building using the fiber hotel than inside, said Harrison Fagg, owner of the fully occupied Granite Tower.
"I don’t think there is a telephone company in the five-state area that isn’t in there," Fagg said. "The big advantage is the fiber connectivity."
Businesses selling on the Web, engineering firms and Internet service providers are using the fiber hotel. For Web-hosting firms – or any office with servers – the fiber hotel is attractive "because the pipes are so big," Sheard said. "As these companies grow they can expand their bandwidth."
The fiber hotel also makes it easy for customers who want to buy a circuit to Seattle or Denver. "All they have to do is run a cable across the room," Sheard said.
Corey Jensen, the fiber hotel’s manager, estimates that 70-80 percent of companies in Granite Tower use or get services from the fiber hotel. Not all have servers in the hotel. Some tenants chose Granite Tower because they could get more Internet service, he said.
Jensen estimates that investments in technology improvements in the building, counting the lines running up conduits in the north and south sides of the building and the rooftop antennas, amount to about $40 million.
One of those improvements is iConnect’s power system. The fiber hotel has never been down, Sheard said, meaning tenants’ servers have never gone dead due to power failure.
Known otherwise as data centers or co-location facilities, fiber hotels are not unique to Billings, though it is odd to have one in a community this size, Sheard said. But iConnect Montana, which is owned by local phone companies, has also built one in Helena, one in Great Falls and is finishing another in Missoula.
"Not many of our individual customers can build one of these because of the cost and expertise needed," Sheard said. "We spend anywhere from $300,000 to $600,000 on these facilities."
In major markets, big fiber hotels can run to tens of millions of dollars, he said. But those built by iConnect Montana are scaled to Montana’s market.
"It’s not a gold mine" for iConnect, Sheard said, but it "certainly is helping the Montana economy."
In southwest Billings, a business park is also installing large communications pipes for companies locating there. TransTech Center offers telecommunications infrastructure in what is planned to be 120 acres of park-like setting with trails and water features. Fiber optic lines connect new buildings to a data center in the park.
The project is geared up to support companies that are in the business of moving a lot of data or need to be networked, said Jerry Thomas, TransTech’s director of business development.
"It’s a fiber hotel in a campus setting," Thomas said. "The idea is to give everyone within that campus the benefit of high speed at less cost and do so in a park that is an attractive park."
To build all the conduit and loop the fiber optics will cost hundreds of thousands of dollars. And, as demand grows, a larger data center room will be built, he said.
TransTech sells videoconferencing capacity and bandwidth for data transfer to occupants.
"We are accessing larger volumes at discounted rates," Thomas said.
Economies of scale are realized by connecting park businesses to one point, the data center, he said.
Shane Linse, president of Billings-based Big Sky Communication and Cable Inc., which does telecommunications work at TransTech, said there is a lot of flexibility for companies moving into the park.
Companies needing videoconferencing ability can skip an investment of about $60,000 in videoconferencing equipment by using TransTech’s main processing unit, he said. All they need is a camera and monitor. And videoconferencing can be done anywhere in the building where there is an Internet connection, not just in a dedicated room, Linse said.
While TransTech Center is getting interest from "local businesses looking for a better environment," Thomas said, "there is an opportunity to recruit businesses from outside the area."
From places like Montana far from major markets but offering a better quality of life, he said, companies can do business all over the world.
And the trend of doing more business outside one’s immediate area is likely to continue.
Fagg also said the demand for telecommunications capacity will continue to grow. He recalled how Billings once lost an opportunity to attract a major new employer because the city didn’t have fiber redundancy.
"I don’t think we can see the end of it and it’s just going to keep growing," he said.
Copyright © Western Business News, a division of Lee Enterprises.
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