Thursday, December 31st, 2015

Time	Event
1:00p	Follow These Data Center Trends in 2016 Here it is, our obligatory end-of-year look in the crystal ball (hey, at least give us credit for not using a picture of an actual crystal ball to accompany it). Data centers may stand still, but the data center industry never stops morphing. We will doubtlessly see more big trends emerge next year in addition to the five listed below, but these five are the ones we think are the big ones that will get even bigger over the course of 2016. If you disagree or have other big trends you think we should add to the list, don’t hesitate to post a comment below or on our social media channels: Twitter, Facebook, LinkedIn, Google+. More Colo Firms Will Invest in Renewable Energy We saw unprecedented investment in renewable energy by colocation providers this year. Equinix, the world’s largest retail colo provider, contracted to buy enough renewable energy to offset the power consumption of its entire North American footprint. Switch, the operator of a giant SuperNap data center campus in Las Vegas that is on an expansion roll, building in Nevada, Michigan, and Italy, and seriously considering a move into Asia, has committed to powering all of its footprint with renewables and invested in building a 100 MW solar plant in Nevada. Save for a few exceptions (such as QTS’s massive solar farm in New Jersey), colocation providers generally have not been interested in spending money on renewables, saying there was little demand for it from their customers. A giant like Equinix and a provider like Switch – which is much smaller than Equinix but houses infrastructure for some of the largest internet and cloud players – making serious commitments to renewables signals that interest in renewable energy among colocation customers is on the rise, so expect to see more multitenant data center providers to invest in clean energy. Enterprises Will Come to Colo for Their Cloud Needs There’s less and less doubt now that even the most traditional enterprises have a lot to gain from using public cloud services. However, many of them don’t want to rely on the public internet to access cloud services, because of concerns with security, performance, or both. Enterprises will increasingly use highly connected colocation data centers to access cloud services privately, over direct network links. Expect data center providers to strike more and more deals with cloud service providers to make their services accessible from the colos to attract those enterprise users. Add access to cloud services to the list of most important factors to consider when evaluating a colocation facility – on par with network connectivity, power costs, room for expansion, and tax breaks. Data Center Construction Spike in Europe The killing of Safe Harbor by the European Court of Justice threw a curve ball to the cloud services industry, especially since the regulators didn’t really propose an alternative to the legal framework companies used since 2000 to ensure they weren’t breaking any laws by storing their European users’ data in data centers overseas. While many of the cloud providers turned to legal workarounds to address the vacuum left by the annulment of Safe Harbor – Microsoft handing the custody of its European customers’ data to Deutsche Telekom, a direct competitor in the European cloud market, being the most creative workaround – those who could afford it started building. Expect a spike in data center construction in Europe as a result of the regulators’ move. The writing’s on the wall: after Edward Snowden’s leaks, physical location of data matters, and it will continue to matter. The decision’s clear beneficiaries are data center providers with capacity in Europe, who will be glad to absorb increasing demand for data stored locally. Construction in Edge Data Center Markets Will Continue The trends of streaming services eating into the traditional TV market and companies replacing software licenses (or entire data centers) with cloud services will continue to accelerate. That means more and more data center capacity will be needed in places where in the past demand for data centers was low. Expect to see more data center construction in places like Philadelphia, Denver, Minneapolis, Boston, and Kansas City. Digital content and cloud providers want to make sure customers in those markets get high-quality service, and the way to do it is to store content they use closer to them, partnering with local internet service providers to deliver it. New companies like EdgeConneX and vXchnge will continue expanding in those and other markets, but their older and bigger competitors, the likes of Equinix or CoreSite, will also see demand driven by the need to move the edge of the internet further out from primary data center markets like Silicon Valley, Northern Virginia, and New York. One or Two Big Telcos Will Offload Data Centers The telco cloud frenzy of the last five years or so has been replaced by a lot of doubt, as Amazon Web Services has reasserted its lead in the infrastructure cloud market, and as Microsoft Azure has invested billions to try and catch up to AWS. With the cloud giants’ race to lower the prices of their services, their scale, and their rapid releases of new features, it has become nearly impossible to compete in the space, and operating a global data center fleet is expensive business. We’ve already seen both Dell and HP try and quit. If AT&T and Verizon are only rumored to be considering selling off their massive data center portfolios, built out to chase the enterprise cloud market, CenturyLink said publicly it was considering alternatives to data center ownership, while Windstream – a much smaller telco – already sold its data center business to TierPoint this year. Expect to see some hard decisions from CenturyLink about its underperforming data center business in 2016, and perhaps one of the other two giants will make a big move as well. So far, AT&T has handed over its managed hosting business to IBM. (Comment on this)
4:00p	Cisco Creating 200 Cloud Jobs in UK Via theWHIR Cisco announced it will add 200 cloud jobs in the UK by 2017 and invest $2.5 million in European incubator Startupbootcamp in support of UK digital economy growth. The new employees will triple the size of the UK team of Cisco Meraki, and was announced at the company’s London office by Cisco UK CEO Phil Smith and UKSecretary of State for Business, Innovation and Skills, Sajid Javid. Cisco Meraki is the cloud controlled wifi, routing, and security hardware division created when Cisco purchased Meraki in late 2012. “We see the move to digitize every business as a strong trend in the UK, and yet there are still huge opportunities to improve productivity by further use of digital technology,” Smith said. “That is why we are so excited about the investment and growth we are making in the UK and the kinds of skills, jobs and technologies it represents with this investment today.” The investment in Startupbootcamp will provide Cisco with early access and insights into trends in markets outside the US, according to Computer Weekly. Cisco is also one of three companies behind the IDEALondon digital innovation community, and the company committed in July to investing $1 billion in the UK over the next three to five years in fostering startups, making acquisitions, and supporting skills development. Cisco Meraki also received a boost this week from a patent victory in the US Federal Circuit, which said Cisco does not owe damages to Commil US. Commil had purchased a patent on technology for building Wifi networks with multiple access points, RCR Wireless News reports. This first ran at http://www.thewhir.com/web-hosting-news/cisco-creating-200-cloud-jobs-in-uk (Comment on this)
6:35p	Colt to Start New Year With New CEO and CTO The New Year will be a fresh but difficult start for European telco and data center service provider Colt. The company, whose owner Fidelity Investments recently took it private, will start 2016 with a new CEO and a new CTO, both of whom start January 1. London-based Colt announced the appointment of former Pacnet CEO Carl Grivner as its new CEO in September. The company said this month that it had chosen Rajiv Datta, who was formerly COO at AboveNet Communications, as its new CTO. Colt’s previous CEO Rakesh Bhasin, who came to the company from Fidelity, will return to work for the US investment giant. Colt, like other European telecoms, has been struggling to maintain revenue growth, due in part to regulatory price cuts, according to The Telegraph. Revenues in the sector have been slipping for the last six years, affected by competition from free voice services, such as Skype, and a series of regulatory reforms, which forced service providers to cut roaming charges and fees carriers charge other carriers for using their networks to terminate calls, according to Reuters. Europe’s biggest telecoms are forecasting a return to growth next year, but Colt exited the wholesale market for voice calls in 2014. It is also exiting the IT services market, choosing to focus on data center and core network infrastructure services, all to improve profit margins. The company owns 34 carrier-neutral data centers in Europe and manages seven in Asia Pacific. It greatly expanded its Asia Pacific footprint earlier this year by acquiring Fidelity-backed Japanese service provider KVH. Competition in the European data center services market will not be easy, especially following this year’s wave of consolidation. Silicon Valley-based data center services giant Equinix took over TelecityGroup, one of Europe’s biggest players, becoming the biggest provider in the market. Japan’s NTT Communications bought German provider e-shelter, substantially increasing its presence in Europe and becoming a more substantial competitor for deals with customers who want data center and network capacity in Europe and Asia. Fidelity was one of Colt’s founding investors. It owned most of the service provider’s shares until this September, when it bought the shares it didn’t already own — they were trading on the stock market — and took the company private. Fidelity’s offer for the shares valued the company at £1.5 billion. (Comment on this)
7:35p	Audit Finds Department of Defense Cloud Use Poorly Defined and Tracked Via theWHIR The US Department of Defense cannot show cost benefits, or even adequate security from cloud services, because it has no standard definition for what they are, and no central account of cloud contracts, according to an audit by the DOD inspector general. The audit was initially meant to assess the cost benefits DOD is achieving from cloud computing, but the report instead identifies the barriers to any such assessment, and how to remove them. According to the audit report, the DOD uses the National Institute of Standards and Technology’s cloud computing definition (PDF). That definition proved problematic for branch CIOs, who claimed a lack of clarity and disagreed about whether all characteristics identified by NIST were necessary to be considered a cloud service. The audit also found wide divergence between service contracts as provided by department and DOD CIO representatives, which did not even agree on the number of active contracts. The report recommends the adoption and communication of a standard, DOD-wide definition of cloud services, which would be used to compile a central, comprehensive list of services contracted. The DOD response did not address the first recommendation, and only partially addressed the second, according to the inspector general, who has requested further comment from the DOD CIO Terry Halvorsen by January 27, 2016. Halvorsen announced a database consolidation project in 2014 which the DoD hoped would eventually save $10 to $20 billion, and could involve adopting a cloud-based solution. As a huge organization with unique IT challenges, the DoD can surely realize major cost savings from the cloud, but effective implementation and tracking are just as important as in any other case. A July study by Cloud Cruiser showed that organizations with advanced cloud adoption tend to highly value cloud usage and cost tracking. This first ran at http://www.thewhir.com/web-hosting-news/audit-finds-department-of-defense-cloud-use-poorly-defined-and-tracked (Comment on this)

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