It has installed 23 miles of fiber optic network since beginning its Metro Fiber initiative in 2009, and in May finished its first project for a residential client: Roundhouse Place Apartment Community in San Luis Obispo.
“Roundhouse approached us. They thought it was going to give them a leg up” because residential Internet speeds of 1 gigabit per second will attract tech-savvy tenants, said Tim Williams, Digital West chief executive officer and founder.
The company’s fiber installations primarily serve commercial clients who need speeds up to 10 gigabits per second for video conferencing and large volumes of uploads and downloads.
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Installing fiber optic cables is an expensive endeavor — the cost is estimated at $160,000 per mile, Williams said — but necessary for local companies to grow, he said.
“The Internet is getting bigger. Now every business is online,” he added.
A 2010 survey of tech businesses throughout San Luis Obispo County and Santa Maria by the San Luis Obispo Chamber of Commerce cited bandwidth as a top limiting factor to business growth, according to a previous Tribune report.
“It’s not a profitable business for a while but we are making an investment. We’re building the new telecommunications network. The phone copper system is more than 100 years old,” Williams said.
Digital West leases fiber optic circuits from national carriers; the circuits connect its San Luis Obispo data center to Los Angeles and the Bay Area, creating what Williams calls a fiber optic “backbone” through the Central Coast.
The company has installed fiber in most commercial districts of San Luis Obispo, with plans to install fiber in Grover Beach, Templeton, Paso Robles, Lompoc and Ventura.
The initiative is funded with internal financing and bank loans, said Williams, who declined to disclose the fiber optic investment and the company’s annual revenues or profits.
Before installing Metro Fiber, connectivity made up approximately 5 percent to 10 percent of Digital West’s business. Now it makes up 34 percent.
Digital West, which has 21 employees, also offers co-location services, which means that it hosts companies’ hardware in its data center, as well as cloud services, so that companies don’t have to maintain their own servers.