Thursday, June 30th, 2016

Time	Event
12:00p	How Brexit May Impact the Data Center Market *Updated with comments by Eric Schwartz, president, Equinix EMEA. While the long-term impact of Britain’s vote to exit the European Union remains to be seen, the immediate impact is uncertainty, which is rarely a good thing for any market, including the data center market. Some of the biggest data center providers in Europe saw that immediate impact of uncertainty in their stock performance right after the referendum’s outcome was announced last Thursday. Equinix, Digital Realty Trust, and Interxion stock value dropped immediately, and while US-based Equinix and Digital have since recovered – Digital’s stock was actually trading higher than ever in the afterhours on Wednesday – the Netherlands-based Interxion had yet to regain its pre-referendum level. As far as Brexit’s possible long-term impacts, among the chief concerns are potential expenses associated with compliance with whatever new regulations the UK establishes if and when its process of severing from the EU is completed, data center customers adjusting their infrastructure location strategies, the status of data center industry workers in the UK who are EU citizens but who do not have British passports, and whether or not British tech and financial-services industries, both of which have historically been a big source of revenue for data center providers and equipment vendors, will continue to see the same level of investment they have seen in the past. It’s obviously unclear at this point whether all these long-term concerns turn into real problems and how big those problems will be exactly. “It’s too early to really tell what the impact on the data center industry will be,” Zahl Limbuwala, founder and former chairman of the Data Center Specialist Group within the British Computer Society, a UK industry group for IT professionals, told Data Center Knowledge. “Before everybody panics, let’ see what happens.” Limbuwala is currently CEO of Romonet, a data center management software company he co-founded. Romonet is headquartered in London but has offices in the San Francisco Bay Area. Most of the company’s staff are in the UK, and about a quarter of them may be impacted by Brexit, since they don’t have UK citizenship, he said. While there is some risk that data center providers in the UK – some of them are Romonet customers – may eventually feel stronger competition from other major European data center markets, such as Frankfurt, Amsterdam, or Dublin, as a result of Brexit, the reality is physical location of a company’s servers still matters a lot, and data center customers aren’t likely to suddenly move their servers from London to Dublin simply because London is no longer part of the EU, Limbuwala said. London is one of the world’s biggest data center markets, and there are no indications of this changing any time soon. Digital Realty CFO, Andy Power, told Data Center Knowledge that he spoke with a major customer the day after the results of the referendum were announced, who assured him that the company would continue to consider London a strong market and that it had no plans to vacate its data center space there or in other European markets. While Digital has had substantial presence in a number of European markets for a long time, it recently increased its stake in Europe in a big way by buying eight data centers from Equinix, which was required to sell them in order to get the greenlight from EU regulators to complete its acquisition of TelecityGroup, another major European player. Digital agreed to pay about $874 million for the property portfolio, which included five London data centers, two data centers in Amsterdam, and one in Frankfurt. Read more: With Telecity Deal Equinix Secures European Market Lead Why Equinix Data Center Deal is a Huge Win for Digital Realty CyrusOne, a major US data center provider with presence in the London market, declined to comment. Digital Realty’s leadership did take into consideration UK’s potential exit as they were making the decision to buy the Equinix portfolio. The deal was announced in May, and the company “definitely anticipated that dice could droll like this,” Power said. The bulk of Digital’s European portfolio is occupied by multinational businesses that provide IT outsourcing and cloud services, and the company expects them to continue requiring data center capacity in the UK and other major European markets. Additionally, internet and mobile giants like Facebook or Uber will continue to have to support all those active markets, meaning demand for local data center services will remain even after UK exits, Power said. “Fundamentally, we think the whole EU referendum is not going to materially impact global data center demand,” he said. “We are still committed to our global strategy.” Comments by Eric Schwartz, Equinix president for the EMEA region, were along similar lines. Continuing growth of data traffic, Equinix’s global footprint, and the multinational nature of the bulk of its customer base would cushion the company from potential market-specific fallout, he said, adding that the trend toward distributed IT infrastructure is here to stay, all of which positions Equinix well to withstand any further post-Brexit turbulence that might be in store. “Our well diversified customer base is broadly deployed, with more than 80 percent of our revenue coming from customers deployed across multiple metros,” Schwartz said in an emailed statement. “We believe the trend of enterprises distributing their IT at the edge to be closer to end users to increase performance will continue regardless of how Breixt is implemented.” The vote’s outcome is “complex and will unfold over the next several months,” he said. “During that time we’ll be closely monitoring how the exit will be implemented.” Despite all the uncertainty and potential disruptiveness of Brexit, there may be some upsides for the data center industry, Limbuwala said. As a country that’s independent from the rest of Europe, UK can do things to position itself as a more attractive data center market. Different states in the US compete with each other for data center projects using things like tax incentives. “There’s no reason the UK couldn’t do some of that,” he said. These could be incentives not just for data center providers, but also for vendors and manufacturers who serve the industry and who could be incentivized to move some of their manufacturing capabilities to the UK. If the UK does indeed remain outside of the EU and after the initial turmoil subsides, “I would hope that the UK data center market petitions the government,” Limbuwala said. “This is something the UK could do as an independent.” (Comment on this)
4:43p	Amazon Committed to UK Data Center Opening Despite Brexit (Bloomberg) — Amazon’s cloud computing division remains “committed” to opening a London data center by early next year, even after the British public’s vote for the UK to leave the EU. It will also offer local customers the option of hosting data in Germany or Ireland, a company executive said Thursday. “Demand for all our services is growing across all Europe. For us it’s business as usual,” Stephen Orban, head of enterprise strategy at Amazon Web Services, said in an interview at a customer conference Thursday in Frankfurt. Britain’s vote last week to break away from the EU has raised concerns about how data-storage regulations in Europe and the UK will evolve. Orban confirmed Amazon’s planned UK data center would open despite the uncertainty, opening later this year or early next as planned. “We’re watching the situation but I can’t speculate how everything is going to unfold,” Orban said. AWS offers data protection agreements that have been approved by the EU’s Article 29 working group and plans to work with “the various different compliance rules and regulations” on the Continent, he said. See also: How Brexit May Impact the European Data Center Market Britain’s decision to leave the EU could make using the planned London center more complicated for customers if the UK adheres to different rules than the rest of Europe about storing and safeguarding data. The Brexit process raises concerns that Europe’s new General Data Protection Regulation, approved in April and set to take effect in 2018, will no longer apply in the UK once it leaves the EU. If the UK needs to create its own set of protection rules it could complicate business in Europe for cloud providers such as AWS, Microsoft’s Azure service, and data businesses. Customer Considerations “We were considering using the UK one, mostly for UK customers,” said Charles Phillips, Chief Executive of Infor, a New York-based business software company that’s one of AWS’s biggest customers. “It’s less likely given what’s going on. I don’t want to rush in there and then have customers tell us to do something different.” Phillips, a former high-ranking executive at Oracle, said Infor plans to keep hosting British customers’ data from Amazon’s Dublin center, though he had hoped Amazon’s UK center would offer faster Web response times. “Most of our customers we know are OK with Ireland,” he said. “We don’t know if they’re OK with the UK.” See also: After Brexit Vote, US Tech Giants Face Splintered Digital Future in Europe Orban said European customers that don’t want to tap computing capacity from the upcoming UK cluster of data centers could still host their applications in Amazon’s Frankfurt and Dublin locations. Amazon’s cloud division, which the company says is on track for $10 billion in revenue this year, rents computing capacity and software that businesses can tap online instead of installing and maintaining their own servers. Amazon serves customers from 13 data center clusters worldwide and plans to open four additional locations in the coming year. “Everything new we’re building on AWS,” said Eric Bowman, VP of engineering at Zalando, the fast-growing Berlin-based Web apparel retailer. Each of its 110 developer teams has its own AWS account, which lets the company build new capabilities quickly without getting tangled in one another’s code or waiting weeks for new servers to arrive. The UK cluster would offer EU customers “strong data sovereignty,” Amazon’s CTO, Werner Vogels, said in a blog post last year. That’s an important issue in Europe, where regulations require data resides on computers in the EU, and many businesses, especially in Germany, insist it say in their own country. (Comment on this)
6:38p	Satya Nadella Writing Book on Reinventing Microsoft and Himself: Hit Refresh By IT Pro While others are looking for a light beach read, Microsoft chief executive Satya Nadella has something a little more ambitious in mind this summer: Working on a book of his own. Harper Business announced that it will be publishing Nadella’s mix of manifesto, autobiography (but, he stresses, it’s not a memoir), and strategy, which will go on sale November 15, 2017. The official description: As told by Microsoft CEO Satya Nadella, Hit Refresh is the story of corporate change and reinvention as well as the story of Nadella’s personal journey, one that is taking place today inside a storied technology company, and one that is coming in all of our lives as intelligent machines become more ambient and more ubiquitous. It’s about how people, organizations and societies can and must hit refresh—transform—in their persistent quest for new energy, new ideas, relevance and renewal. At the core, it’s about us humans and our unique qualities, like empathy, which will become ever more valuable in a world where the torrent of technology will disrupt like never before. As much a humanist as a technologist, Nadella defines his mission and that of the company he leads as empowering every person and every organization on the planet to achieve more. Listed at 320 pages, the book isn’t set to release until November 15, 2017 but is already available for preorder in Kindle format from Amazon: Hit Refresh by Satya Nadella This first ran at http://windowsitpro.com/windows/satya-nadella-writing-book-reinventing-microsoft-and-himself-hit-refresh (Comment on this)

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