Tuesday, August 16th, 2016

Time	Event
12:00p	CoreSite Cranks Up Data Center Construction Spending CoreSite Realty is planning to spend more money on data center construction this year than in any past year, and the big property it is planning to buy in Northern Virginia for $60 million is part of this capital-deployment push. By the end of this year, the data center REIT expects to invest $260 million in capital, $220 of which will go to data center construction, Steve Smith, senior VP of sales at CoreSte, said. Its normal yearly capital expenditures range between $130 million and $160 million, he said. But this isn’t a normal year, with demand for data center space outpacing supply in all major US markets. CoreSite and its competitors, other top data center REITs, are racing to expand capacity in those markets to take advantage of all the demand, a lot of it coming from top cloud providers, who are also quickly expanding data center capacity as they compete for share of the growing cloud services market. “We’re deploying more capital here than we ever have, by almost 2X,” Smith said. “We’re not slowing down, that’s for sure.” In the second quarter alone, CoreSite kicked off construction of an 8,000-square foot expansion in Denver, placed into service a nearly 140,000-square foot data center it built for a single client in Santa Clara, California, as well as 50,000-square foot and 40,000-square foot expansions in Northern Virginia and Los Angeles, respectively. The company is also nearing completion of its latest multi-tenant data center in Silicon Valley called SV7. See also: CoreSite Realty: Strong Q2 Overshadowed By CEO Tom Ray’s Departure Last week the company announced that it has agreed to buy a 22-acre light industrial/flex office park in Reston, Virginia, which is 0.3 miles from its two existing Reston facilities, VA1 and VA2. It expects to close the deal in the fourth quarter but has already started going through the initial steps necessary before kicking off data center construction. The site, called Sunrise Technology Park, has four existing buildings, totaling 315,000 square feet. CoreSite believes it can build out more than 660,000 square feet of data center capacity on the parcel in multiple phases. It will essentially be an expansion of the existing nearby Reston campus nearby, Smith said. The future campus will have direct network links to the existing one, meaning its future tenants will have access to the many networks and cloud service providers who are the company’s current customers in Reston. See also: What’s Behind CoreSite’s Fortune 100 Channel Partner Deals The company expects to spend about $90 million on the first phase of construction at STP, which will entail redevelopment of an existing 48,000-square foot industrial building to turn it into a data center, construction of a new 90,000-square foot data center shell, as well as another 90,000-square foot building that will house infrastructure to support these and future data centers on the campus. How quickly CoreSite will build out the campus will depend on its ability to pre-lease capacity there, Smith said. “We’ve had some good interest so far. There’s a decent amount of inventory that’s in play already.” CoreSite isn’t the only data center provider with big expansion plans in Northern Virginia, the biggest and most highly sought after data center market in the US. CyrusOne recently bought land in Loudoun County for its third data center in the market. Another example is DBT-DATA, which acquired land for data center construction in Ashburn and Sterling. Developer Corporate Office Properties Trust also recently announced that it has bought about 60 acres of land in Prince William County, where it plans to build two massive data centers for a single Fortune 500 client. COPT, which has built data centers in Northern Virginia for Amazon, didn’t name the client in this particular deal. See also: Data Center Market Spotlight: Northern Virginia (Comment on this)
3:00p	Keppel DC REIT Finds Safe Entry into Milan Data Center Market Keppel DC REIT, subsidiary of one of the biggest data center providers in Singapore, has acquired a massive data center in Milan, for the first time extending its European footprint into Italy. The €37.3 million deal exemplifies the REIT’s strategy of acquiring low-risk, fully or mostly leased data centers. The data center in Milan, which comprises of three interconnected four-story buildings is fully leased to what Keppel describes as “one of the world’s largest telecommunications companies,” whose name it has not disclosed. The company has done several similar deals globally since it was spun out of Keppel Data Centers in 2014 through an IPO. So far, it has focused its international expansion on Europe and Asia-Pacific. The REIT has data centers in its native Singapore, Malaysia, Australia, UK, Ireland, Germany, the Netherlands, and now also Italy. The Milan acquisition follows Keppel’s entry into Germany last year, when it acquired a data center under construction from mainCubes One Immobilien for €84 million in a sale-leaseback transaction. Both Keppel DC REIT and Keppel Data Centers are parts of Singapore’s marine, property, and infrastructure giant Keppel Corp. Keppel Data Centers is focused primarily on the local Singapore market, while its sister DC REIT does international expansion through its low-risk acquisition strategy. “They like doing very stable, predictable deals,” Jabez Tan, research director at Structure Research, who specializes in Asian data center markets and companies, said. “They don’t like to acquire an empty shell and have to fill it up themselves.” Besides being low-risk, preleased properties don’t require the landlord to keep operational teams in every location, making for a relatively quick and low-cost way to move into new markets. The REIT’s only assets that aren’t fully leased are its data centers in Singapore and Dublin, Tan said. See also: Singapore is a $1B Data Center Market and Growing Fast The reason Keppel has been buying properties in Europe and not in North America is that Europe is a less mature market, so there is a greater upside for a new entrant, he explained. Milan hasn’t been a significant data center market historically, but some major players have been active there recently. Last year, IBM launched its first cloud data center in Italy in Cornaredo, which is in the province of Milan, and Switch, the Las Vegas-based data center provider famous for its massive-scale campuses, announced its first data center construction project in Europe in Siziano, which is also just outside of Milan. Amazon CEO Jeff Bezos met with Italy’s prime minister, Matteo Renzi, in July to discuss the company’s expansion plans in the country, which reportedly include construction of a distribution and logistics center outside of Rome and potentially a cloud data center somewhere in the country. From a geographical standpoint, Tan said, Milan stands out as a south European alternative to Europe’s biggest data center markets concentrated in the north – markets like London, Frankfurt, Amsterdam, and also increasingly Dublin. Milan is also centrally located between Western Europe and Eastern Europe, so it could also be a good “bridge” location between the two regions, Tan added. Another thing that could be making it attractive as a data center market is its relative proximity to Africa, putting it in good position to play a role as a connectivity bridge between European and North African markets. (Comment on this)
5:08p	9 Questions Data Center CEOs Must Ask about Revenue Generation When a data center operator grows beyond 200 employees, there’s almost always a C-level executive responsible for revenue generation — most commonly a Chief Revenue Officer (CRO). The CRO usually — but not always — has a good grasp on the necessary talent, technology, and strategy needed to stay competitive and relevant in today’s buyer-centric data center marketplace. In smaller data centers that don’t have the resources to invest in a strategic executive hire at that level, the CEO has to wear these hats — or suffer from severely delusional revenue generation expectations. With an estimated 70% of the buyer’s journey over before most IT influencers and decision makers are ready for a conversation with someone from your team, and that number is expected to rise even further, a lack of attention to revenue generation could hobble a data center CEO’s career. Often when I meet leaders of data center operators and other companies in the data center ecosystem, I’m asked: CEO: “So Joshua, what do you do?” My response: My team helps companies like yours create scalable, predictable revenue growth by differentiating, getting found earlier in today’s buyer’s journey, and earning a seat at the table as a trusted advisor. CEO: “Oh, so you’re a marketing company?” My response: Well that’s one piece of the puzzle. Maybe 25% of all of the problems that need to be addressed. But if marketing strategy lives in a vacuum in your data center, you will fail. Got a minute or two? Let me tell you why and share the nine questions that you’ll want to ask your team around revenue generation: Is your marketing team focused on helping the sales team achieve revenue goals? (more specifically: SMART goals that are specific, measurable, attainable, relevant, and time-bound) Is there a mutual service level agreement (SLA) between your marketing teams and sales teams around lead quota, the monetary value of different kinds of leads, and how quickly and thoroughly a sales accepted lead is worked? Do you have an up-to-date set of thorough buyer personas to align marketing, sales, and your services team around which kinds of clients and contacts are ideal? And which are a distraction and waste of time? Do your marketing and sales teams meet on a weekly basis to talk about which opportunities closed, which didn’t, and what questions and objections sales reps hear from prospects and clients? Are subject matter experts on your sales team regularly interviewed by your company’s content creation and content promotion team? Does your marketing team do regularly-scheduled ride along’s with members of your sales team to get a better grasp on prospects’ challenges? Is your marketing platform fully integrated with your sales platform/CRM system? Does your sales team have access to real-time lead intelligence on how prospects are interacting with blog posts, downloadable content, video, webinars, and emails? Does your marketing team have real-time access to how your sales team works and closes opportunities — closed loop reporting — so it knows exactly which top-, middle-, and bottom-of-the-funnel marketing activities are influencing revenue generation? Long gone are the days when a data center’s sales team can be effective by harassing their way into prospects’ voicemail boxes, email inboxes, and offices — let alone c-suites. The way in which IT influencers and decision makers research data center products and services has changed drastically. So much so, that often as much as 70% of the decision-making process is over before you’re even looped in. Is your company staying relevant and competitive with today’s marketplace realities? Or are you burying your head in the sand and hoping that Michael J. Fox’s famed Delorean time machine and flux capacitor from Back to the Future will bail you out? Use the nine questions in this blog post to have a realistic conversation with your team members about where you stand and what gaps need to be addressed to achieve scalable, predictable revenue growth. At Data Center World Fall conference in New Orleans this September, be sure to catch Joshua Feinberg’s session on How Data Centers Use Thought Leadership to Attract World-Class Clients and Talent on Thursday, September 15, 2016 at 10:20 am in room R215 of the Ernest N. Morial Convention Center in New Orleans. Register for Data Center World today! About the author: Joshua Feinberg is Vice President and Co-Founder of SP Home Run, Inc. — which helps data center, managed service, hosting, and cloud providers grow their leads, client base, revenue, and profitability. (Comment on this)
6:40p	Nutanix Said to Start IPO Roadshow as Soon as September (Bloomberg) — Nutanix, the maker of software for data centers, aims to start its initial public offering roadshow as soon as next month, according to people familiar with the matter. The company first publicly filed for its IPO in December with a $200 million placeholder, which is an amount used to calculate fees that may change. The timing for the roadshow isn’t final and could be delayed several weeks depending on market conditions, said the people, who asked not to be identified because the matter is private. Read more: Nutanix May Become First Hyperconverged Infrastructure Startup to Go Public The offering would be one of only a handful of venture capital-backed technology companies to go public in the US this year. Only four such companies have listed this year, raising a combined $455 million compared with 11 companies that raised $1.8 billion in the same period last year, according to data compiled by Bloomberg. A spokesman for Nutanix declined to comment. Nutanix sells technology for storing and analyzing data on commodity hardware. The company last raised money privately in August 2014 at a valuation of about $2 billion — double the valuation it fetched seven months earlier. Read more: Why Hyperconverged Infrastructure is so Hot LightSpeed Venture Partners and Khosla Ventures are the two biggest shareholders, according to the prospectus, with stakes of 23 percent and 11 percent, respectively. The San Jose, California-based company posted a 90 percent increase in sales to $241 million in the year-ended July 31, 2015, according to its IPO prospectus. Even so, the company has yet to report a profit. Nutanix has applied to list on the Nasdaq Global Select Market under the symbol NTNX. Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co. and Royal Bank of Canada are leading the deal. Read more: Five Myths about Hyperconverged Infrastructure (Comment on this)

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