Prospectus Summary
This summary does not contain all the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, especially “Risk Factors” beginning on page 7.
Our Business
We are the leading data storage services provider. We are building the first global data storage network, allowing our customers to connect their computer systems, or “plug in”, to our network to store and access their data in much the same way they obtain and use electricity or telephone service. We believe that our data storage utility model provides our customers increased availability, security, functionality and control over their data, at a price they could not replicate internally. We are building and expanding a dedicated fiber optic network which connects our Storage Point of Presence, or S-POP, data centers in major metropolitan areas. Each S-POP data center is a storage facility containing disk and tape storage systems. Our metropolitan storage networks are connected to each other and to a central monitoring and control center through long distance fiber optic connections. This combination of long distance fiber networks and metropolitan storage networks creates our Global Data Storage Network, which we call our GDSN.
Customers can access a virtually unlimited pool of data storage by connecting to our GDSN through our StoragePort access channel. StoragePort devices can be installed either at the customer’s own facility or at a web hosting facility at which we have established an S-POP data center. Our proprietary Virtual Storage Portal software permits customers to monitor and control their storage resources 24 hours per day and seven days per week through a web browser.
Our Global Data Storage Network currently includes over 20 S-POP data centers in 11 metropolitan areas in the United States and one in London. We expect to have more than 50 S-POP data centers in operation in the United States and selected international locations by the end of 2000. The majority of our S-POP data centers are located at web hosting facilities operated by companies such as AT&T Web Hosting Services, Exodus Communications, GlobalCenter and Level 3 Communications. We are focused exclusively on storage, and more than 150 of our approximately 350 employees are storage experts who assist businesses in designing and implementing their data storage strategies. Our customers include established enterprises and Internet-based businesses that require large volumes of data storage capacity in a wide range of industries, including financial services, communications, energy and natural resources, health and education.
Our Opportunity
Established enterprises as well as Internet-based businesses are creating and storing a growing amount of data. Forrester Research estimates that online storage for Global 2,500 companies will grow at a compound annual rate of 78.8% from 1999 to 2003. Designing, implementing and managing storage solutions for this growing amount of data is increasingly complex as a result of the multiple components of the solution, which are manufactured by multiple vendors and lack interoperability standards. According to Forrester, storage expenditures as a percent of total spending on computing systems for an average Global 2,500 firm are expected to increase from 4% in 1999 to 17% in 2003.
To efficiently manage their data, companies require storage flexibility and functionality that is typically unavailable through a traditional data storage configuration that links a single computer to a single storage device. New technologies and the increasing availability of fiber optic bandwidth are making possible the creation of storage area networks, or SANs, that can link multiple servers to multiple storage resources through a dedicated high-speed network.
These new technologies have created the opportunity to establish a storage area network that can free businesses from the need to build and operate their own internal data storage infrastructures. By storing and accessing their data through a global storage network established and managed by a third-party provider, businesses can cost-effectively satisfy their data storage requirements and thus focus on their core competencies. We believe that there is a significant market opportunity for a company that has both the infrastructure and expertise necessary to provide a comprehensive data storage solution to data-intensive businesses.
Our Solution
We believe that our managed data storage service solution provides the following key benefits to our customers:
Our Strategy
Our objective is to maintain and extend our position as the leading data storage services provider by:
Corporate Information and History
StorageNetworks was incorporated in Delaware on August 14, 1998. We began providing our managed storage services in May, 1999. Our principal executive offices are located at 100 Fifth Avenue, Waltham, MA 02451. Our telephone number at that location is (781) 434-6700. Our Internet address is www.StorageNetworks.com. The information contained on our web site is not incorporated by reference in this prospectus.
StorageNetworks, Storage Services for the e-Economy, Global Data Storage, S-POP, StoragePOP, PACS, DataPACS, NetPACS, BackPACS, SafePACS, StoragePort, Virtual Storage Portal, VSP, Just Plug In, and S-POP Manager are service marks of StorageNetworks. All other trademarks and service marks are the property of their respective owners.
The Offering
The number of shares of our common stock that will be outstanding after this offering is based on our shares of common stock outstanding as of March 1, 2000 and excludes:
Except as set forth in the financial statements and related notes or as otherwise indicated, all information in this prospectus assumes: