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Friday, January 15th, 2016
| Time | Event |
| 1:00p | Why DuPont Fabros Is Getting out of New Jersey DuPont Fabros Technology, one of the biggest providers of data centers for major cloud and internet companies in the US, kicked the year off with an admission that it has made an expensive mistake. In the best-case scenario, the mistake will cost the company $115 million, but it may end up costing more. DFT admitted that going into the New Jersey data center market six years ago with its wholesale data center business model was the wrong thing to do. The company said it wants to sell NJ1, its massive 360,000-square-foot data center building in Piscataway and get out of New Jersey, most likely for good. “NJ1 is a first-class data center, and we have developed many valuable customer relationships during our ownership,” Chris Eldredge, DFT’s president and CEO, said in a statement. “NJ1’s location is best-suited, however, for more retail-oriented operations. Our plan to exit the New Jersey market with the sale of this property will allow redeployment of capital in target m arkets that match our objectives for growth and profitability.” Read more: DuPont Fabros Planning Massive Toronto Data Center Eldredge, a former NTT America exec, took the real estate investment trust’s helm in February of 2015, replacing Hossein Fateh, one of the founders. On Fateh’s watch, the company built a thriving business in Northern Virginia, leasing large chunks of space and power capacity to internet and cloud companies. As of October 2015, its biggest customers were Microsoft, Facebook, Rackspace, and Yahoo, contributing 22 percent, 20 percent, 11 percent, and 7 percent of the landlord’s incoming annual rent respectively. DFT’s Only Weak MarketDFT has done well in Chicago and Silicon Valley markets too, but in New Jersey it’s been having a tough time. Today, after six years in the market, the company has fitted out about 90,000 square feet of data center space in the building, 70 percent of which is occupied. “It’s the one facility they haven’t done well in,” Kelly Morgan, research director at 451 Research, said about NJ1. Why it hasn’t done well isn’t entirely clear, and DFT representatives declined to comment beyond what the company said in the announcement. The official explanation, that New Jersey is a better retail colocation market than it is a wholesale data center market, isn’t entirely plausible. If it’s good for retail colo, why not lease the building to a retail colo provider? In fact, DFT did lease a portion of it to a retail colo provider, albeit one that went bankrupt. Net2EZ was DFT’s big anchor tenant in New Jersey, Morgan said. The tenant filed for bankruptcy in early 2015 and changed its name to Net Data Centers. In November of last year, its assets were acquired by Anexio Technology Services, which reduced the size of its deployment in DFT’s data centers in New Jersey and Northern Virginia by 2MW total. Read more: US Data Center REITs Enjoying a Booming Market While New Jersey today isn’t a wildly active data center market, it’s not a particularly weak one. “It’s OK,” Morgan said about New Jersey. “Other data centers have done OK [there]. I don’t think it’s necessarily a problem in New Jersey overall.” There is a number of possible reasons DFT has struggled there, including the nature of data center customers in New Jersey, design of the facility’s infrastructure, and the company’s timing for bringing it to the market. Read more: Who Leased the Most Data Center Space in 2015? Wrong Design for New Jersey?A data center real estate broker, who wished to remain anonymous, said one reason could be that the facility’s design isn’t quite right the market. He agreed that market conditions across the Hudson from Manhattan “aren’t great,” but that’s only part of the story. The bulk of DFT’s data centers are in Northern Virginia, its core market, and most of that capacity is leased to cloud providers and web services companies. Those customers need much higher power densities than enterprise customers do, and designing high-density infrastructure for cloud users has been one of DFT’s specialties. Majority of data center users in New Jersey, however, are financial services companies, who don’t need that much power at every rack for the applications they are willing to put in leased data centers, the broker said. For cloud and internet companies, New Jersey is simply too expensive and too close to Northern Virginia, one of the most highly sought-after data center locations. These companies deploy massive data centers that use a lot of energy, which they can get in Northern Virginia for almost half of what they have to pay in New Jersey. Other operating costs are higher in New Jersey too, such as its unionized labor force. Poor Timing?A senior-level official for another major data center provider, who also wished to remain anonymous, said timing may have been an issue. New York and New Jersey’s financial services sector was strong before it was slammed by the 2008 financial crisis but hadn’t really recovered in 2010, when NJ1 came to market. He also pointed out that because DFT’s anchor tenant in the building was a data center service provider, it has infrastructure designed to be shared by multiple tenants, which is problematic for financial services firms, who are some of the most security-sensitive data center users out there. It may not be the right data center for the market, but everything has it price, which seems to be the angle DFT is going for. In its announcement, the company said it expects to incur an “impairment charge” between $115 million and $135 million as a result of the sale of NJ1. That’s the size of the discount it is willing to give to whoever agrees to buy it, a discount so steep, it may just outweigh hesitation caused by the design or skepticism about the market. |
| 6:09p | Equinix Closes Its Blockbuster $3.8B TelecityGroup Acquisition Equinix has closed its acquisition of the European data center services giant TelecityGroup, establishing itself as the largest data center provider in Europe for some time to come. The $3.8 billion deal increases the Redwood City, California-based giant’s data center portfolio by 30 percent, taking it from 111 to 145 data centers, not counting the eight European facilities the company has agreed to sell in exchange for approval of the merger by European antitrust regulators. At its core, Equinix’s business model rests on its ability to create interconnection hubs inside data centers located in key markets. These hubs are where the internet largely lives, since they are where countless network operators, web content companies, cloud service providers, and enterprises interconnect their networks and exchange traffic. The Telecity acquisition gives Equinix control over many more such hubs in Europe. In recent years, these hubs have become even more important as places where enterprises connect to cloud providers for their enterprise IT needs. Equinix leadership believes there is still huge untapped business potential in being a data center intermediary between the enterprise IT shop and the cloud, and the merger with Telecity gives it more fire power in pursuing this opportunity. Read more: Equinix CEO Unveils Aggressive Plan to Court Enterprises In addition to expanding its reach, the deal prevented Equinix from becoming stuck in a number-two position in the European market. Equinix’s successful bid last year to acquire Telecity interrupted a merger between Telecity and Interxion, another European data center heavyweight, that was in the works. Equinix CFO Keith Taylor told us in June that letting a Telecity-Interxion merger go through would open up the possibility for another competitor to snap up the combined company, which would make it nearly impossible for Equinix to ever get to the number-one position in Europe. Read more: Equinix: We Didn’t Want to Stay Number-Two in Europe Forever The Telecity deal was one of three acquisitions Equinix made in 2015. It also bought Japanese data center provider Bit-isle for $280 million, substantially increasing its presence in the country, and Nimbo, a professional services firm that gave it technical expertise in helping customers make the transition from legacy data center infrastructure to a modern, hybrid one that combines on-premise IT with cloud services. Telecity expands Equinix’s capacity in core European markets, such as London, Frankfurt, and Amsterdam, but it also gives it presence in smaller markets where it hasn’t been before: Dublin, Helsinki, Istanbul, Milan, Sofia, Stockholm, and Warsaw. It gives Equinix about 1,000 net new customers, including more than 200 network and mobility companies, and about 300 cloud and IT service providers. |
| 7:30p | Five Cloud Computing Funding Stories You Might Have Missed: January 15
By Talkin’ Cloud Each week Talkin’ Cloud compiles a list of cloud computing financing stories for readers who might have missed the news earlier in the week. This week’s column features funding news from Anaplan, Zerto, VeloCloud Networks, MiMedia, and Scalr. These stories have been gathered from Talkin’ Cloud’s article database and other media sources. If we missed something, feel free to leave a comment below. We might just add it into the mix. Here’s this week’s list of 5 Cloud Computing Funding Stories You Might Have Missed, Jan. 15.Anaplan Raises $90 Million and Appoints James Budge as Chief Financial Officer. Enterprise planning cloud company Anaplan has secured $90 million in a funding round led by Baillie Gifford, Founders Circle Capital and Harmony Partners. Anaplan noted the funding will be used to “fulfill increasing global demand for its cloud-based business planning and modeling platform.” In addition, Anaplan has named former Genesys executive James Budge as its chief financial officer. Zerto Announces $50 Million Growth Financing Led by IVP, Achieves Fourth Consecutive Year of 100%+ Sales Growth. Zerto has added $50 million in a Series E funding round led by IVP, with participation from Access Industries and other investors. The disaster recovery software provider said the funding will be used to support its ongoing product development. VeloCloud Raises $27M to Meet Growing Global Demand for SD-WAN. VeloCloud has closed $27 million in Series C financing led by March Capital Partners, with participation from New Enterprise Associates (NEA) and Venrock. The cloud-based software-defined wide area network (SD-WAN) provider noted the funding will enable it to expand its business operations and sales and marketing teams. MiMedia Raises $15M To Accelerate Growth For Next Generation Consumer Cloud. MiMedia, which provides a personal cloud for digital content, has secured $15 million in a Series C funding round led by Thorney Investment Group, R&R Venture Partners and other investors. Chris Giordano, MiMedia’s CEO, said the funding will help take his company “to the next level, expanding its reach and capabilities.” Scalr Raises $7.35 Million in Series A Funding From OpenView Venture Partners. Cloud management platform provider Scalr has raised $7.35 million in Series A financing. OpenView Venture Partners led the funding round. Scalr pointed out the financing will allow it to expand its U.S. sales team and bolster its product. This first ran at http://talkincloud.com/cloud-computing-f |
| 7:52p | IT Innovators: Ziosk Serves Restaurants’ Growing Appetite for Data
By WindowsITPro Ziosk’s table-top platforms are revolutionizing the dining experience in more than 2,700 restaurants across the U.S., including Chili’s, UNO Pizzeria & Grill, Ruby Tuesday, and Red Robin. Restaurant customers use these tablets to scan menus, find out which wines pair best with their entrées, order and pay electronically, and in some cases, even pay with American Express rewards points. Behind the scenes, these table-top platforms are also stirring up a growing appetite for data, as restaurant managers analyze and interpret real-time information and survey feedback. Such information provides visibility into everything from specific servers’ popularity, to which entrées are most frequently ordered at various times of the day and whether seating arrangements or restrooms are up to par. However, during Ziosk’s rapid expansion—the company now owns 95 percent market share in the deployed table-top tablet space and has tablets interacting with more than 50 million guests per month—its recipe for success involved much more than just a good business idea and the vision to see it through. In fact, much of the company’s ability to provide comprehensive and frequent reports for its restaurant partners has been contingent on the technology that it has decided to enlist. Kevin Mowry, Director of Engineering at Ziosk, has been a driving force behind choosing which types of technology would best serve Ziosk and its restaurant partners. About a year ago, he was confronted with several challenges. First, Ziosk’s surveys were generating a ton of feedback in free-form writing, but there weren’t enough people available and simply not enough time to sift through all the information and form conclusions. In addition, the company was rapidly expanding and needed a platform that could scale with it. Mowry knew that maintaining Ziosk’s existing physical infrastructure to handle the growth would be challenging, and the cost of hardware and people required would add up in large amounts. Furthermore, Mowry was looking for a way for reports to be delivered frequently enough that restaurant management could address concerns as soon as a guest expressed them through the platform. Having this ability would afford management the opportunity to intervene and improve the dining experience before a customer ever walked out the door. Mowry decided to enlist the help of Artis Consulting to help build new infrastructure. Together, they set up a proof-of-concept to preview Microsoft cloud technologies including Azure Machine Learning, Azure Data Factory, Azure HDInsight, and Power BI. Then, they tried out this solution with Ziosk’s largest customer, Chili’s. “We were leveraging Microsoft technologies such as data warehousing and various management systems, like a content management system and a guest relationship management system, and it was a natural move for us to shift some of the technology into Azure,” Mowry says. “We began to explore ways in which we could leverage technologies and do it in concert with a leading customer (Chili’s), using data tools to improve the restaurant.” Fortunately, the proof-of-concept was an evident success. Free-form writing survey results were sent up to a Microsoft machine that utilized semantic analysis capable of pulling up keywords to get a quick and accurate view of whether each response was positive or negative and what the subject was about. Furthermore, data was streamed into the cloud to analyze and scale with hundreds of thousands of Ziosk tablets and millions of guests interacting and generating loads of data. The new solutions also positioned Ziosk on the leading edge of power BI for predictive analytics—something Ziosk has since been focusing on and exploring areas for further improvement. “Now, with easy access to graphs, charts, geographical snapshots of information, and new ways to slice and dice information, restaurants are identifying what they need to focus on and how to deliver on those concepts better than ever before,” Mowry says. Renee Morad is a freelance writer and editor based in New Jersey. Her work has appeared in The New York Times, Discovery News, Business Insider, Ozy.com, NPR, MainStreet.com, and other outlets. If you have a story you would like profiled, contact her at renee.morad@gmail.com. The IT Innovators series of articles is underwritten by Microsoft, and is editorially independent. This first ran at http://windowsitpro.com/it-innovators/it-i |
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