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Scale Computing secures new digs downtown

February 10, 2017

Scale Computing Inc. is finally getting a new home.

The fast-growing IT company, which has been a top destination for venture capital, is assuming about 6,200 square feet of space in The Union 525, the flexible-lease space in the former Harry E. Wood High School downtown. The move-in date for its roughly local 45 employees is March 1.

Scale—which has raised about $60 million in capital and previously expressed interest in going public—had been operating out of the Purdue Research Park near Indianapolis International Airport since about 2008. Its plans to relocate to Massachusetts Avenue in late 2015 fell through, CEO Jeff Ready said, and he learned about the one-, two-, and three-year leases at The Union, 525 S. Meridian St., last summer.

"That was a very big factor—probably the deciding factor," Ready said in a phone interview Thursday, referring to the lease terms. "The issue I was having with spaces we were looking at is that it’s the traditional Indianapolis real estate market that wants seven- and 10-year leases.

He added, "If you outgrow your space in three years and you have a 10-year lease, what do you do? You could sublet and all these different things, or the landlords have other buildings and can transfer you there—but it's all screwing around."

Scale has about 100 employees, including some at a West Lafayette office and a few in other countries. It has about 2,000 clients and boasts eight-figure annual revenue, which grew 68 percent in 2016.

The company sells box-sized IT infrastructure that can handle an enterprise's networking, data storage and virtualization needs. Ready said that although many companies are moving data and applications to the cloud, or servers run by a third-party, some firms still prefer to have their own private servers and data repositories. Some companies use both, he said.

In the wake of announcing an $18 million fundraise in July 2015, Ready told IBJ that the company was pursuing profitability and eyeing an initial public offering. Ready said Thursday that he couldn't comment on either topic.

John Hurley, who runs Union 525, said Scale fits the profile of company that it wants to attract—beyond startup stage but still fast-growing. He said the 93,000 square feet of rentable space there is now 100 percent leased after debuting last fall. He said he wasn't ready to reveal some of the tenants.

"We've got some really big announcements coming down the pike," Hurley said. "We've got an element of co-working, higher education, high school learning, nonprofit, scale-up and start-up company."

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