Wednesday, October 5th, 2016

Time	Event
4:00a	VMware Sells Its Governments Cloud Business to QTS VMware has agreed to sell its government cloud business to QTS Realty Trust, one of the biggest data center service providers in the US. The deal comes about a month after VMware, now majority-owned by Dell, announced a major shift in cloud strategy, choosing to focus more on providing technologies that help customers use other cloud providers’ services rather than trying to compete with market leaders, such as Amazon and Microsoft, as a cloud provider itself. For QTS, the acquisition means it will now be able to sell the services under its own brand, rather than act as a service provider on behalf of VMware. Carpathia Hosting, whom QTS acquired last year, has been operating the infrastructure and providing services to government clients for VMware. Terms of the deal were not disclosed. Government agencies are under pressure from the White House to reduce costs by outsourcing as many applications as feasible to the cloud instead of hosting them in their own data centers, and VMware vCloud Government Service is one of a number of cloud services that have been certified as compliant with FedRAMP, a centralized government system for certifying cloud providers that meet federal cybersecurity standards. While there is baked-in demand for FedRAMP-compliant cloud services, there’s also a lot of competition. QTS is among more than 70 providers that have been authorized to provide cloud services to government agencies, although it is competing only with the portion of those providers who sell Infrastructure-as-a-Service, rather Software-as-a-Service, or Platform-as-a-Service. Still, the IaaS category includes some heavyweights, such as Amazon Web Services, IBM, and Microsoft Azure. The deal should cause little if any disruption for existing vCloud Government Service customers and staff who work in the two Carpathia data centers that host the service, according to Dan Bennewitz, COO sales and marketing at QTS. “It’s a seamless transition,” he said, adding that the only thing that may be different for customers is that they will get invoices from QTS rather than VMware. QTS plans to phase out the vCloud Government Service brand, folding the service under the existing QTS Government Cloud unit. Customers will see changes as a result of investment QTS is planning to make to grow the service, Bennewitz said. The company is planning to improve connectivity options by providing access to more carriers and access to major public cloud providers, such as AWS. These capabilities are supported by QTS’s data center in the Atlanta metro, which is connected to the Carpathia data center in Dulles, Virginia – one of two facilities supporting VMware’s government cloud. The second one is in Phoenix, and both are leased from Digital Realty Trust. This Dulles-Atlanta link is crucial to the way QTS’s strategy for differentiating from other FedRAMP-compliant providers. The company’s business strategy in general relies on being able to offer a wide variety of services beyond data center space, and it wants to leverage those capabilities to attract government clients as well. “We’re the only national provider that has this broad portfolio of services, from colocation, all the way to QTS Government Cloud,” Bennewitz said. These services include managed services, managed hosting, public and private cloud, as well as a series of solutions tailored to specific industry verticals (government is one of those verticals). Bennewitz declined to share how much revenue VMware’s government cloud business generates or how many agencies are customers. The business has grown over the past year, he said. “We’re very pleased with the results; we’re investing so this can actually grow faster.” (Comment on this)
6:04p	Couture Meets Data Centers During Paris Fashion Week It’s not very often that the public outside of the IT world gets curious about the nature of internet infrastructure. But, every so often, an artist or a celebrity will get fascinated with it and draw the broader public’s attention to the nuts and bolts behind Netflix, Facebook, Snapchat, and Spotify. Naturally, artists’ fascination is with the way data centers look and sound, and it’s the neat racks of servers, perforated tiles, blinking lights, and colored cabling that inspired the Chanel collection displayed as part of Paris Fashion Week Tuesday against a backdrop that looks very much like a data center, devised inside the 116-year-old Grand Palais. There didn’t appear to be a grand message behind the show’s theme, other than the comment on how much society depends on technology. Karl Lagerfeld, the designer behind the collection and the set, told Reuters, “We all depend on it. Imagine your life without the telephone and the next step will be artificial intelligence and robots.” Here’s a taste of “Chanel data center” at Paris Fashion Week. Click on the arrows to flip through the slides: PARIS, FRANCE - OCTOBER 04: Models walk the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Designer Karl Lagerfeld walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Chanel goodie bags are seen ahead of the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Models walk the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Usher attends the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Razane Jammal, bag detail, attends the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: A model walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)     PARIS, FRANCE - OCTOBER 04: A model, bag detail, walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: A model,bag detail, walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: Models walk the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: A model, dress detail, walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   PARIS, FRANCE - OCTOBER 04: A model,dress detail, walks the runway during the Chanel show as part of the Paris Fashion Week Womenswear Spring/Summer 2017 on October 4, 2016 in Paris, France. (Photo by Pascal Le Segretain/Getty Images)   (Comment on this)
11:13p	Verizon Said to Be Nearing Data Center Deal, Most Likely With Equinix Equinix is the most likely buyer of a 14-data center portfolio Verizon Communications has been looking to offload since at least January, according to a note by Cowen and Company analysts issued Tuesday, in which they said a transaction is likely imminent. The portfolio consist primarily of data centers Verizon gained when it acquired Terremark in 2011, and the analysts estimate that Equinix may pay about $3.5 billion in the transaction, which would be neutral for Verizon and positive for Equinix, given high quality of the Terremark facilities and their locations, which would further increase Equinix’s already enormous global scale. Verizon is one of several big telcos who expanded their data center footprint several years ago in hopes of capturing share of the growing cloud and data center services market but eventually found it difficult to compete with giants that have specialized in those services, companies like Amazon, Microsoft, Equinix, and Digital Realty Trust. Other examples are CenturyLink, which has been shopping a data center portfolio the bulk of which it took over in 2011 when it acquired Savvis, and AT&T, which reportedly has been trying to divest about $2 billion worth of data center assets. Read more: Why CenturyLink Doesn’t Want to Own Data Centers Of the 14 data centers Cowen & Co. believes may be in play, the 750,000-square foot NAP of the Americas in Miami is the crown jewel. Colocating about 160 carriers, it is the primary interconnection hub for networks that carry traffic between the US and Latin America. The analysts estimate that this facility alone is responsible for about $100 million of the $250 million to $275 million in revenue they believe the portfolio generates for Verizon. Verizon’s NAP of the Americas in downtown Miami (Photo: Verizon) Another important site in the portfolio is NAP of the Capital Region campus in Culpeper, Virginia, right outside of Washington, DC. The nearly 1 million-square foot campus has reportedly enjoyed a lot of success with major private-sector enterprise clients. Read more: Who May Buy Verizon’s Data Centers? In addition to the Miami and Culpeper sites, the portfolio includes three locations in North America, five in Europe and Middle East, two in Asia Pacific, and two in Latin America. Cowen & Co. highlighted the LatAm facilities (São Paulo and Bogota) in its report because they would be complementary to the ALOG data centers in Brazil Equinix acquired in 2014. Here’s a more detailed list of the locations: North America Culpeper, Virginia Herndon, Virginia Miami, Florida Richardson, Texas Santa Clara, California Latin America Bogota, Colombia São Paulo, Brazil EMEA Amsterdam, The Netherlands Brussels, Belgium Frankfurt, Germany Istanbul, Turkey Madrid, Spain Asia Pacific Hong Kong Singapore If Cowen & Co. analysts end up being right, and Equinix and Verizon reach a deal, it will bring up at least two big questions. One is whether Equnix would still consider a potential acquisition of some CenturyLink data center assets. The company’s executives have implied they were considering both Verizon and CenturyLink portfolios. Another question is whether Equinix would be required to divest some of its properties for the deal to be approved by antitrust regulators. It was compelled to sell eight European data centers earlier this year in order for its TelecityGroup transaction, which made it the biggest data center provider in Europe, to get a regulatory green light. Read more: Why Equinix Data Center Deal is a Huge Win for Digital Realty Equinix and Verizon spokespeople did not respond to requests for comment in time for publication. (Comment on this)

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