Frigidity as jobs growth engine?

Yan Ness thinks so. Michigan’s arctic climate is a godsend to his business, Ann Arbor-based Online Technologies.

Ness, Online Tech's CEO, is eternally grateful for freezing temperatures. Michigan’s climate makes it cheaper to run data centers, because cooling overheated data centers is expensive.

“It’s trite to say over and over again, but it’s cold here. It’s a great place to build power centers,” Ness said.

In the latest iteration of Online Tech’s growth, the firm is consolidating its older 5,000-square-foot data center at the City Center building in downtown Ann Arbor to its newer 10,500-square-foot data center in Avis Farms in Pittsfield Township. Online Tech also has a 30,500-square-foot facility in Genesee County.

The company also collaborated with Ann Arbor-based Bluestone Realty Advisors to sign a lease to move its corporate offices from downtown to the Burlington Office Center at 305 E. Eisenhower Parkway.

Online Tech’s data capabilities provides its business clients with the capacity to handle Internet traffic demands. Its clients include software companies, financial companies and Web hosting firms.

Growth in demand for data capacity is driven by a trend called “cloud computing,” which refers to companies renting data space to save money instead of building it internally.

New York-based Tier1 Research projected in November 2008 that demand for data center capacity - 14 percent in 2008 - would stay strong despite a tough economy.

"Demand is expected to rebound strongly as the economy recovers, surpassing current levels significantly," Tier1 Research reported. "Even during the slowdown, the inability of enterprises to build their own data centers will outweigh any impact from decreased IT spending."

Meanwhile, computers are still getting faster, but that requires more server space and more air conditioning.

“If you make them twice as fast, they get twice as hot,” Ness said. “If you make them half the size, they’re four times as hot.”

Online Tech recently won Ann Arbor SPARK’s Fast Track award for the fourth consecutive year. The award honors companies that maintain average annual revenue growth of 20 percent for three consecutive years. The companies must also have reported revenue of at least $100,000 in the first year, meaning Online Tech has been growing for 7 straight years.

Ness doesn’t like to hear complaints about Michigan’s tough economy. He tells his employees that to overcome an economy that’s 10 percent harder than the rest of the country, you just have to work 10 percent harder.

But he wouldn't mind it if Lansing lawmakers displayed an understanding of the importance of investing in Michigan’s software and Web community. SPARK statistics recently suggested that 17 percent of local high-tech job openings come from the Ann Arbor region's software and Web community.

“It’s a little frustrating that the state doesn’t see the IT sector as much of a valuable investment,” Ness said.

At least he’s got the cold air.

Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter.