For Vantage Data Centers, a Santa Clara, California-based wholesale data center provider, the key to being successful in the Silicon Valley today is capturing demand for data center space from companies that have just reached the size where the size of their infrastructure demand makes wholesale space attractive.

Greg Ness, chief marketing officer at Vantage, said 500kW of IT load is usually the sweet spot companies reach when they start considering going with a wholesale provider. This is where they start wanting more control of their infrastructure and better alignment between IT and power and cooling expenses.

“When they get to 500kW or higher, they revise their data center strategy,” he said. They are usually companies with an Internet-centric business model or providers of cloud-based services.

Many of them will set up a private cloud for primary capacity and continue to use public cloud for demand spikes. “One CIO recently said they own the base and rent the spike,” Ness said.

Enterprises comprise the second-biggest market for Vantage in Silicon Valley. “There’s probably a healthy number of enterprises in California, especially in northern California, that are in out of date data centers,” Ness said.

Many of these companies are looking to consolidate into wholesale data center suites.

Currently, roughly about 25-30% of Vantage’s customer base in the Valley is comprised of “pure enterprise” customers. About 50% is comprised of Internet- or cloud-based businesses.

At the moment, Vantage is focused on V1, the third and final data center at its Santa Clara campus, about 40% of which the company leased out before it even started construction, Ness said. In February, the provider raised US$135m, which allowed it to accelerate the project – a refurbishment of an existing building.

Vantage is also building in Quincy, Washington, at a 63-acre plot of land it bought in 2011. The company is also actively looking for an appropriate site to expand into other US markets.

So far, it is looking at Chicago, Dallas, North Carolina, South Carolina and Virginia markets, Ness said.

Find out the latest and meet who is who in the Silicon Valley/San Francisco data center market at the DatacenterDynamics San Francisco conference on 17 July.