New location and new model for Novato managed server providerMARIN COUNTY – Quadrant Data Systems is in migration mode.

The provider of managed computer services is leaving its Novato address, once home to Nacio's co-location business, and moving to smaller quarters in the city.

At the same time Quadrant is shifting its model from a co-location site and manager of customer-owned servers to a provider of virtual services over the Internet, also known as cloud computing.

"In five years computer services will become a commodity," said Kirk Hurford, Quadrant COO. "Investment in servers for most businesses will be unnecessary, with applications available on demand from the Internet cloud."

Quadrant, which serves about 180 clients by housing and managing their servers, wants to migrate them to the cloud within the next six months to a year.

Both the virtual and the physical moves make a lot of sense business-wise.

According to Quadrant CEO Joseph Berardi, its co-location business is producing a third of annual revenues while taking up two-thirds of operation costs, mainly because of temperature control and security.

"Our PG&E bill was $10,000 a week," said Mr. Hurford.

Managed servers, while still requiring temperature control, provide 65 percent of revenue while occupying a fraction of the space.

By dropping co-location entirely and shifting managed server clients to the cloud, Quadrant can significantly reduce client costs, to about $99 a month for basic service, and its own operation costs.

[caption id="attachment_19695" align="alignright" width="279" caption="Quadrant is moving into 3,500 square feet of this Novato location"][/caption]

Moving the business to a 3,500-square-foot data center on Novato's Wood Hollow Drive, across the freeway from the 15,000-square-foot space on Leveroni Court, will free up money that the company can invest in infrastructure for cloud computing.

"Overall, we'll be lowering our costs by about 30 percent, and we'll pass those savings on to our customers," said Mr. Hurford.

As they do with managed servers, clients can choose their applications and services.

"The difference is that instead of trying to think of what they'll need two or three years down the line before paying for installation, they can change their minds any time and have access to new applications almost instantly," he said.

An added advantage for Quadrant is the ability to broaden its customer base geographically.

"We have no intention of dropping those of our current customers who don't want to migrate to the cloud," said Mr. Hurford. "We know that there will always be some server-hugger holdouts."

The complexities of moving the company's operations should be completed by the end of March, he said. Over the next year or two Quadrant will add four or five new salespeople and technicians, building its staff to about 20.

The company is committed to remaining in Marin County and particularly Novato.

Novato Councilwoman "Pat Ecklund was very, very encouraging and proactive about our staying here," said Mr. Hurford.