A merger of medium-sized data-center providers indicates that use of hybrid cloud services and Amazon Web Services (AWS) continues to fuel growth in the data-center market, as larger enterprises and government agencies increasingly adopt cloud services.

Datapipe, a Jersey City, N.J.-based provider of cloud and managed hosting services, announced this week that it was acquiring Layered Tech, based in Kansas City. The combined entity will have about 600 employees. Datapipe had about 400 employees prior to the deal. Financial terms were not disclosed.

The deal will propel Datapipe into the government sector, where Layered Tech was a specialist in terms of Federal Information Security Management Act (FISMA) and FedRAMP compliance. These compliance standards add layers of security to insure that public cloud solutions such as AWS can be offered to government agencies.

Datapipe officials says there is huge growth in terms of delivering AWS and “hybrid” cloud solutions to both large companies and government. A hybrid cloud solution might tie together different types of data-center hosting, such as a combination of AWS and private cloud connections.

Both Datapipe and Layered Tech specialize in the complexity of combining different types of cloud services, for example by building analysis and security tools on top of connectivity.

“There is growth of hybrid cloud solutions that are leveraging Amazon,” said Craig Sowell, Senior VP of Marketing with Datapipe. “Let's say you have a highly secured database that you want to maintain on a physical rack -- we can build a private connection to a physical database and use a connection to AWS.”

Sowell said that many enterprises and government agencies want to use public cloud services such as AWS, but they also want somebody else to manage the complexity, especially if AWS is combined with other cloud services and requires additional security.

“We are definitely seeing a rapid increase of the adoption of AWS in large enterprise clients,” said Sowell. “Many had been using it for sandboxes or specialized applications but now they are asking how to move to it in large scale.”

By acquiring Layered Tech, Datapipe will expand its data center presence with additional locations in Kansas City, Missouri, Denver, Colorado and Dallas, Texas. Datapipe will also form a Datapipe Government Solutions business unit. Dan Tudahl, former President and General Manager of Layered Tech Government Solutions, will serve as President and General Manager of this new unit.