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Friday, June 10th, 2016
- Newark, California: 137 million kWh in 2015
- Reno, Nevada: 46 million kWh in 2015
- Prineville, Oregon: 54 million kWh in 2015
- Maiden, North Carolina: 218 million kWh in 2015
| Time | Event |
| 12:54a | Cogeco Peer1 Recovers from Atlanta Data Center Outage Cogeco Peer1’s data center in Atlanta experienced a partial power outage Thursday afternoon, affecting some of the customers in the facility. The data center outage started around 1:30 pm local time, company spokesperson, Shawna Gee, said. The company posted regular updates on its Twitter feed during the outage, and in a tweet around 6:30 pm Eastern reported that full power had been restored to the facility. “There was a disruption in power to the facility,” Gee said. “It was partially affecting certain areas of the facility.” As of Thursday evening, the root cause of the outage or the reason the facility’s backup power systems did not pick up the load had not been determined, she said. “Everything has been restored. Our customer are back online.” As with any major data center outage, some of Peer1’s customers took to Twitter to vent their frustration:
Another common occurrence is a competitor trying to lure angry customers from the provider experiencing the outage:
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| 12:00p | Exclusive: Why QTS Expects to Win Where DuPont Fabros Failed The fact that QTS Realty Trust stock has risen this year along with the entire data center REIT sector should not be surprising. However, many investors may not realize that QTS shares have gained 158 percent since the October 2013 IPO at $21 per share. Part of the QTS secret sauce has been CEO Chad Williams’ mantra that “low cost basis is forever.” The Overland Park, Kansas-based data center provider continues to pursue a strategy of buying large-scale, infrastructure-rich properties at bargain-basement prices and then retrofitting them into state-of-the-art colocation data centers. QTS operates mega-scale data centers in Atlanta; Richmond, Virginia; Dallas; Princeton, New Jersey, and plans to open the initial phase of its Chicago campus this summer. Read more: Exclusive: How QTS Plans to Keep Momentum After Two Years of High Growth Its recent $125 million purchase of the DuPont Fabros Technology data center campus in Piscataway, New Jersey, was a “stealth deal,” announced only after it was completed. How can QTS succeed where DFT struggled for years? QTS CIO Jeff Berson warned us in an interview to beware of reports of slow leasing activity in New Jersey that only looked at large-scale deals, of 1MW or greater. The New Jersey market is not a great wholesale market — the reason DFT sold and got out of New Jersey — in large part due to high cost of electrical power. Read more: Data Center Market Spotlight: New Jersey QTS believes that the market sweet spot will likely be 250kW to 500kW deals and smaller-scale colocation deployments. The demand will mainly be from local customers looking to expand or companies looking to get a point of presence in the New York-New Jersey market. Low Cost BasisThe $125 million sales price equates to about $7 million per 1MW for the 88,000-square foot NJ1 facility. Berson believes that DFT spent $14 million per 1MW to build it initially, which according to QTS is more than would be required today to meet market requirements for space and power. He estimated that it would cost $12 million per 1MW for a competitor to construct a large-scale ground-up data center ideally designed for smaller customers, with the flexibility to provide N, N+1, or 2N infrastructure redundancy. Higher costs for suitable land (above the hurricane flood plain), site development, and construction labor and material make the New York-New Jersey market a more expensive proposition than most other markets, Berson said. Read more: QTS Managing for Long-Term Growth, Expanding in Seven US Markets While developing for $7 million per 1MW or lower might be achievable in Northern Virginia or Dallas, purchasing the well-built DFT facility and infrastructure for that price gives QTS a competitive cost advantage in New Jersey. The Art of the DealThe purchase price was also structured so that the deal would be slightly accretive from day one. There are nine customer leases in place, totaling 56,000 square feet, with one customer due to vacate in early 2017. The remaining eight customers all represent new logos for QTS, including a large media customer, a large healthcare customer, and five leading financial services firms. QTS will have to invest in capital improvements to allow smaller customers to operate efficiently in the 30,000 square feet immediately available for lease, but those costs would be relatively minor to the provider given the big picture, Berson said. Another value-add is that only 14MW of the 18MW of available power will be used when the first phase is at capacity, he said. This would make 4MW available to help lower the costs of the the second 88,000-square foot data hall. The existing leases have been “marked to market” by QTS. This means that when above-market leases expire, QTS should be able to re-let the space accretively. Additionally, the cash rent received by QTS for the remainder of the five-plus-year weighted-average lease terms will actually be higher than how the leases are booked under generally accepted accounting, or GAAP. In a similar fashion, DuPont Fabros will book a $25 million gain on the $125 million sale to QTS, because the New Jersey campus had already been marked down on the books. What Makes Acquisitions Accretive?Last year QTS closed on its $326 million acquisition of Carpathia Hosting, which added over 230 cloud and hosting customers. The acquisition immediately increased revenues derived from cloud and managed hosting from 10 percent to 25 percent. It also bolstered the QTS security and compliance offerings, including its government offerings. The Carpathia purchase, at 9.6x EBITDA, was immediately accretive to operating FFO and AFFO. Read more: Why QTS Dished Out $326M on Carpathia Hosting These are important REIT metrics which add back depreciation, amortizations, and other non-cash adjustments to earnings. AFFO is also referred to as cash available for distribution (CAD), which supports the REIT dividend distribution. The QTS shares currently trade at an earnings multiple in the ballpark of 20x per share, so this makes acquisitions at lower multiples accretive to existing shareholder, rather than dilutive on an FFO/AFFO per share basis. |
| 4:51p | Report: Microsoft Dominates Cloud Infrastructure Software Market  Brought to you by The WHIR Cloud deployments and cloud-enabled systems now account for well over half of the $29-billion-per-quarter data center infrastructure market, according to Synergy Research Group. Synergy released Q1 2016 data on the cloud-building technology market this week, showing that Microsoft continues to dominate the cloud infrastructure software market with a share of over 40 percent. VMware has the second-largest share at just under 20 percent. Cisco and Hewlett Packard Enterprise hold the highest market share in public and private cloud hardware. Dell was third in both hardware categories. IBM, EMC, Lenovo, and Huawei were other vendors with substantial market share. See also: Top Cloud Providers Made $11B on IaaS in 2015, but It’s Only the Beginning “With spend on cloud services growing by over 50 percent per year and spend on SaaS growing by over 30 percent, there is little surprise that cloud operator capex continues to drive strong growth in public cloud infrastructure,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst. “But on the enterprise data center side too we continue to see a big swing towards spend on private cloud infrastructure as companies seek to benefit from more flexible and agile IT technology. The transition to cloud still has a long way to go.” In a soft quarter typical for the beginning of the year, infrastructure sales grew by 13 percent annualized in Q1, and 20 percent over the past year. Synergy calculated total public cloud revenues at $20 billion per quarter as of September. This first ran at http://www.thewhir.com/web-hosting-news/m |
| 10:14p | Apple Creates Energy Company to Sell Renewable Energy it Generates Apple has created an energy company called Apple Energy LLC so it can sell energy generated by renewable-energy plants it has invested in around the US, including utility-scale solar installations and fuel-cell plants that convert biogas to energy. The company revealed its new subsidiary in documents filed with the Federal Energy Regulation Commission, spotted first by 9to5Mac. In the documents, Apple is asking for FERC permission to sell energy from close to 90MW of renewable-energy generation capacity it owns and its 130MW power purchase agreement with a solar-farm developer in California. Apple has been striving to power 100 percent of its operations, including several large-scale data centers, with renewable energy. Its data centers started consuming more energy than any other part of the company’s operations in 2013. See also: Cleaning Up Data Center Power is Dirty Work With the exception of colocation facilities it uses in addition to the data centers it owns, Apple has been able to claim that its data center infrastructure is powered entirely by renewable energy, using a combination of its own generation capacity and renewable energy purchases. The application doesn’t mean Apple may eventually sell energy directly to consumers. The company is asking the commission to grant its new subsidiary market-based rate authority, which is a license to sell energy on the wholesale market at market rates, as opposed to rates established by energy regulators. The authority is a mechanism to enable energy companies that aren’t vertically integrated in a given market – meaning they don’t own enough generation and transmission infrastructure to be essential to ensuring the region has enough power – to compete with the ones that do, while the ones that do have to sell energy at rates set by regulators because they hold too much power in the market. There’s also no indication that Apple is looking for a way to sell excess energy its renewable-energy generation projects produce. The commission’s approval would simply give it more flexibility to sell the energy it generates to make it more economical. Google has had a subsidiary registered as an energy company for years for this reason. If a company invests in a utility-scale photovoltaic installation or a wind farm, it usually cannot plug its data center into the generation source directly. The energy has to go to the same utility grid all other electricity users in the area are on. Google sells the clean energy it pays for on the wholesale energy market, recouping its costs and applying renewable energy credits to the regular grid power it buys for its data centers, making it “carbon-neutral” as a result. The company has said this scheme makes using renewable energy at least as economical as simply buying grid energy if not more economical in some cases. As the cost of renewable energy goes down over time, Google expects to actually make a profit from the energy it sells. See also: Google Makes its Biggest Renewable Energy Purchase Yet Apple owns four data center sites in the US, which together consumed 455 million kilowatt-hours of energy in 2015, according to the company’s latest sustainability report: The company has data center projects underway in Mesa, Arizona, Athenry, Ireland, and Viborg, Denmark. It also uses shared colocation data centers in the US and elsewhere around the world, but says the vast majority of its online services are supported by its own facilities. The company has built three solar arrays and a fuel-cell plant in North Carolina, a solar array in Nevada, and two micro-hydro systems in Oregon, which use the power of water flowing through local irrigation canals. |
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