Tuesday, May 27th, 2014

Time	Event
12:00p	Carter Validus Buys Ascent’s Chicago Data Center for $212M Carter Validus Mission Critical REIT has purchased a data center in Northlake, Illinois, for $211.7 million from developer Ascent. The building, called CH2, is a 250,000 square foot multi-tenant facility next to Microsoft’s data center in the suburban Chicago market. The deal is partially a development play, while the real estate investment trust’s traditional strategy has been to buy fully-leased data center properties.”It definitely has an aspect of development for them, because there’s some vacancy,” Ascent CEO Phil Horstmann said.”They have a lot of capital at their disposal.” Until now, Carter Validus has done sale-leaseback data center deals only. A typical sale-leaseback option involves a property owner selling their building to a second party, while agreeing to continue to lease space in the building. The transaction generates cash for the former owner (now the tenant), and provides the new owner steady rent from the lease. These deals are particularly attractive when the initial owner is a blue-chip company with a strong credit rating. In Northlake, the REIT gains a well-managed facility with an existing customer base, as well as an opportunity to develop the property further.  This is Carter Validus’ largest single portfolio acquisition to date, pushing its asset value over the $1 billion mark. Ascent to continue managing CH2 The deal works out well in Ascent’s overall strategy too. “Our main private equity partners out of New York have a higher risk profile,” Horstmann said. “We’re recycling some capital with them and we’re moving on to some more higher-risk projects. It allows us to continue to do speculative developments.” As part of the agreement, Carter Validus will provide new capital for continued expansion of the facility, and Ascent will continue to manage operations, engineering and construction at the site. The new capital structure for CH2 frees Ascent up to build more with its other private equity partners, Horstmann said. “We have a site in downtown Chicago, in the South Loop, we’re working on. We’re getting started in St. Louis, Phoenix and Denver.” A wholesale-retail mix Ascent launched the data center in March, offering both wholesale and retail space. The mix is representative of a trend in the industry of wholesale providers getting closer to retail colocation (DuPont Fabros and Digital Realty), and retail getting closer to wholesale (Fortrust and Equinix with its Business Suites). “We’re hearing from users that they want more options than wholesale kW,” Horstmann said. “They want to turn dials around customization, wholesale colo with or without operational services.” Carter Validus is focused on two sectors, data center and healthcare, citing trends in society it believes will boost demand for data storage and outpatient healthcare. The company acquired acquired $593.2 million in real estate assets in 2013, bringing its total portfolio to $988 million. Of that 2013 total, $589 million was data center assets, compared to $399 million of healthcare facilities. (Comment on this)
12:30p	Exclusive: Compass Raises $100M for Expansion Compass Datacenters has added $100 million of investors’ money to its war chest that will fuel the developer’s next stage of growth. Started by Digital Realty Trust alumnus Chris Crosby and developer Chris Curtis in 2011, Dallas-based Compass has a standardized design for a 1.2 megawatt data center it claims it can build quickly anywhere a customer desires, targeting primarily second-tier U.S. markets. Now, with three service provider customers and a few completed data center builds under its belt, the company is looking at further expansion. The latest capital infusion consists of $35 million in equity commitments and $65 million in additional capacity under the company’s revolving credit facility, bringing that facility to a total of $110 million. The additional debt financing came from a syndicate led by KeyBank, which also included Regions Bank and Raymond James. Equity financing was provided by private individuals. Crosby, the company’s CEO, said it was “looking at accelerating things in the next 12 to 18 months and deploying that capital in a pretty quick fashion for our clients.” Compass has built a data center for Iron Mountain in Northborough, Massachusetts (just outside of Boston). It also recently completed a build in Minneapolis, Minnesota, for CenturyLink, and hosting company Windstream is using its facilities near Nashville, Tennessee, and in Durham, North Carolina. Compass owns a piece of land near Columbus, Ohio, but has not yet announced a client for that location. Crosby said expansion plans were still focused on North America, including development on the Ohio property. A lot of companies are shopping for data center space at the moment, whose requirements fit the Compass model. “We’re tracking about 85 MW of opportunities right now,” Crosby said, adding that most of those deals would be for its single-pod 1.2 MW deployments. To date, Compass has been successful with service-provider customers, and Crosby expects it to continue winning deals in that space. There are also more enterprises considering data center space in second-tier markets now, he said. (Comment on this)
1:24p	Four Tech Trends That Will Impact State and Local Government CIOs Mark Welke is Senior Director Product Marketing,  NetApp. Like the spring that is finally upon us, a handful of technology trends are beginning to emerge at the state and local levels for 2014. Government agency leaders, like most other executives facing today’s budget realities, are focused on improving government performance through technology and efficiency. As the economy climbs out of the recession, budgets are still tight, and state and local CIOs have to find ways to do more with less.  The question is whether or not they follow closely behind their brethren in the commercial arena with certain technologies and solutions, and the preliminary answer appears to be “yes.” Here are the four trends that I see as first and foremost among government agencies. Cloud Moves Front and Center The National Association of State CIOs named cloud computing as the top tech priority for 2014, eyeing advantages in terms of saving money through shared services, improved security, more robust infrastructure, and operational efficiencies generally – a lot of reasons to move this direction. Yet, at the state and local level, most if not all agencies are in the evaluation stage. In other words, they are not necessarily committing to cloud adoption, but are committing to evaluating cloud computing as a viable and potentially preferable alternative. Government decision makers must recognize that the cloud is not a physical product; instead, it redefines operational and business process. This is important to understand as it relates to expectations.  Initial justification for cloud adoption often focuses on cost savings and commoditizing IT. But the benefits of the Cloud should be viewed as a way to redefine the new normal in how the public sector conducts its business. You will save money, but it will be based on operational efficiencies, reduced time to market and elasticity. Shared Services Becomes a Focus The biggest trend I see right now in this space is shared services.  Sharing services across agencies and jurisdictions is a top priority for state CIOs eager to make the most efficient use of resources for governments both large and small.  Sharing services is cost effective because it eliminates redundancy and helps ensure consistency and quality in delivery across agencies and divisions. Over the past few years, state and local government agencies have launched a variety of shared services offerings. But one thing these pioneering providers have in common is a need for customers – courageous partners from other jurisdictions who are willing to move a significant part of their IT operations into another organization’s data center.  Seeking out and finding the natural synergies that exist across agencies will be a major focus in 2014 as government agencies continue to look for ways to shore up limited budgets. eGovernment Allows Greater Access The growth of eGovernment—whether between government and its citizens, businesses, government or employees—offers boundless opportunities for agencies.  eGovernment is not only about increased efficiencies and cost-effectiveness, although those are certainly important. It doesn’t take much of a stretch of imagination to recognize that removing paper forms from any program will eliminate many processing requirements and significantly reduce error rates. But just as important in the long term is being able to provide access to programs and information to constituents on the very devices that they routinely use. This is particularly true with many on the underserviced communities who rely more heavily on government programs. Often, their only means of accessing services and benefits is through their smart phones, as they cannot take the time off their jobs to visit service centers in person. From ease of service delivery to the ability to allow for more citizen engagement, the potential for increased efficiencies and cost-effectiveness is driving increased adoption of eGovernment policies.  In 2014, state and local governments will look to expand accessibility of services, forms of payment, automation and convenience across every sector. At the same time, it will also be addressing concerns raised by embracing eGovernment, such as lack of accessibility to the internet and security concerns. Cybersecurity Remains an Unrelenting Concern Today’s news is full of data breaches and cyber-attacks, mostly involving large retail and online operations.  But state and local government agencies are not immune to the relentless cyber-attacks, and they operate critical infrastructure that houses considerable amounts of data regarding citizen’s private information.  The need to protect this data has never been more urgent.  While the Federal government has moved to put a cybersecurity framework in place, state and local governments will need to put careful consideration into creating a unifying approach to cybersecurity at a more micro-level. These four trends are being driven by a consistent stream of innovation that is expanding opportunities for state and local government CIOs to succeed with their missions. Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library. (Comment on this)
2:00p	Data Center Jobs: C7 Data Centers At the Data Center Jobs Board, we have a new job listing from C7 Data Centers, which is seeking a Regional Sales Manager in Denver, Colorado. The Regional Sales Manager is responsible for developing negotiating strategies and positions by studying integration of new venture with company strategies and operations; examining risks and potentials; estimating partners needs and goals, closing new business deals by coordinating requirements; developing and negotiating contracts; integrating contract requirements with business operations, identifying trendsetter ideas by researching industry and related events, publications, and announcements; tracking individual contributors and their accomplishments, protecting organizations value by keeping information confidential, and updating job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations. To view full details and apply, see job listing details. Are you hiring for your data center? You can list your company’s job openings on the Data Center Jobs Board, and also track new openings via our jobs RSS feed. (Comment on this)
5:00p	Unrelated UPS Failures Cause Three NYC Outages for Internap In an unfortunate series of unrelated equipment failures, Internap recently experienced three outages at its Manhattan data centers in one week’s time. The May 16 outage at 111 8th Avenue we reported on earlier was followed by two outages of the hosting service provider’s data center at 75 Broad Street. All three were caused by component failures in uninterruptible power supply systems. The first outage at 75 Broad occurred around 10:30 a.m. on May 20 as a result of a failure of electrical capacitors on one of the data center’s UPS systems. This was “a little bit unusual to say the least,” Mike Higgins, senior vice president of data center services at Internap, said. Such capacitors have an average lifespan of seven years, and the ones that failed at 75 Broad were replaced about three years ago. Moreover, Internap’s UPS vendors service the systems annually. ‘Single-corded’ tenants suffer The data center is a “legacy site,” which essentially means it is old and does not have the most recent and advanced support infrastructure. It does have a redundant UPS system, but not all tenants choose to use the redundancy because it costs more. When capacitors failed on one of the systems, customers that did pay for the dual feed were automatically switched to the other UPS, but the “single-corded” customers saw their power go down for about three seconds while the system switched them to the utility power feed. Each of the customers in the latter group stayed down for as long as it took them to bring their servers back up and return their systems to normal. They remained on non-UPS utility power until the next morning, when the damaged capacitors were replaced. Higgins could not say how many of the facility’s tenants were in the single-corded group, but said it was less than half. Faulty breaker causes more downtime The same group of customers saw their equipment go down two days later, around 10:40pm on May 22. The second outage was caused by failure of an output breaker on a UPS system. Again, customers that opted for redundant power distribution continued business as usual, while single-corded customers stayed without power for about four hours until Internap’s engineers were done replacing the breaker, Higgins said. Because the faulty output breaker blocked all power distribution downstream of the UPS, the affected customers’ equipment could not be switched over to utility power like it was when the first outage happened. “We couldn’t get to utility power quickly enough,” Higgins said. Internap keeps an inventory of spare breakers on site, so it was a matter of getting technicians to the building late in the evening and replacing the part. “Fortunately for us we have very responsive vendors,” Higgins said. “Before business hours we had everybody up and running.” Outage at 111 8th also breaker-related The problems at 75 Broad came just a few days after Internap saw its other Manhattan data center, the one in the Google-owned carrier hotel at 111 8th Avenue, go down, disrupting operations for about 20 customers, including the well-known online video streaming platform Livestream and StackExchange, a network of well-trafficked websites for developers. Coincidentally the 111 8th outage was also caused by an output breaker on a UPS system. Internap has a higher degree of redundancy at this facility, but because the system registered the issue as a “major fault,” it took the UPS out of the lineup and shut off the utility feed. While the failover system at 75 Broad did what it was designed to do when both incidents there happened, the system at 111 8th did not. The failure at “111 8th was very odd,” Higgins said. “We’ve never had an outage there [in the past]. Ever.” He declined to say who Internap’s UPS vendors in Manhattan were, but said they were well-recognized leading brands. Whether the provider will hold the vendors liable for the incidents remains to be seen. There is still a lot of work to be done to get to the root of each failure. Tenants don’t mind ‘sharing pain’ Internap management, however, was not lucky enough to get a grace period before having an earful from some of its own disgruntled tenants. “There were customers today that shared their feelings with me, and I was in the ‘listen’ mode,” Higgins said the day after the second outage at 75 Broad. “They experienced some customer pain, so they shared that pain with us.” Internap warns customers who go for the cheaper single-corded option that they are choosing the less reliable route. There are safeguards from legal action by such customers written into their contracts with the provider, Higgins said. (Comment on this)
5:30p	Understanding and Evaluating Containerized and Modular Data Centers It’s clear that the modern data center is significantly different than anything we had just a few years ago. As we integrate more technologies into our infrastructure, administrators are continuously tasked with supporting more applications, data and users. Through this all – the structure of the data center has been forced to evolve. Density, efficiency and scalability are all critical considerations for the next-generation IT environment. With that in mind, many organization are now thinking outside of the traditional data center design concept. Many organizations are evaluating how containerized and modular data centers can directly improve their IT and business process. When deciding if a containerized or modular solution is the right option for your data center, you need to consider: What technical factors are involved? Is it feasible to implement containerized systems into an existing facility? Are containerized systems for future data center greenfield designs the best choice? Even today, many myths and misunderstandings persist about using modular and containerized solu­tions in a data center. Ultimately, the decision is not based solely on facility considerations. The deciding factor is often more a matter of the overall IT architecture and driven by the need for large-scale operational deployment of com­puting capacity. In this Data Center Knowledge Guide, which is sponsored by HP and Intel, we explore the variety of con­tainerized solutions available for different uses. Examples of current container use by well-known organizations will help to illustrate why this solution works so well for specific IT applications. Throughout the entire planning process – it’s important to take a variety of points into consideration. Download this whitepaper today to learn about: Categories of IT-Driven, Purpose-Built Systems Considering Pre-Configured as a Strategic IT Asset Cost-Saving Aspects of IT-Equipped Containers Energy Efficiency of Containers High Density Advantages Designing the Data Center to Support Containerized or Modular Systems Redundancy vs. Energy Efficiency and Initial CapEx Capacity, Design Factors, and Redundancy Levels And much more! It is important to remember that a data center facility has but a single purpose — it is a means to an end, designed to house, protect, and support IT hardware so that applications can deliver services key to the organization and their customers. Conse­quently, when considering a containerized or mod­ular system, remember that while such systems may have been originally developed as a stop-gap measure to deal with an older facility’s capacity lim­itation, you need to examine your facility’s current plans and IT architecture to evaluate how well their use may relate to your organization’s long-term business strategy and goals. (Comment on this)

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