Thursday, January 19th, 2017

Time	Event
1:00p	How Cloud is Changing the Colocation Data Center Market Hyperscale cloud providers are sucking more and more customer workloads away from data center providers, while gobbling up more and more data center capacity to host those workloads, changing in a big way the dynamics in the global colocation data center market. One big result is that growth in retail colocation is slowing, while growth in the wholesale data center market is accelerating, according to the latest report by Structure Research. The analysts project a growth rate of 14.3 percent for retail colocation from 2016 to 2017 and 17.9 percent for wholesale; retail colocation services currently have 75 percent market share, with wholesale responsible for the rest. The global colocation market size reached $33.59 billion in 2016, including both retail and wholesale services, Structure estimates. The firm expects it to grow 15.2 percent this year. Here’s how total colocation data center market revenue is split among regions (chart courtesy of Structure Research): Numerous factors are responsible for the changes in growth rates between wholesale and retail, but the role of massive-scale public clouds by the likes of Amazon and Microsoft is the biggest one, according to Structure. Microsoft, for example, last year signed leases totaling more than 125 MW of data center capacity in the US alone, according to the commercial real estate firm North American Data Centers. In its attempt to catch up to rivals, Oracle leased more than 30 MW in seven wholesale data center deals in the US in 2016. While nowhere near the capacity Microsoft took down, this was a lot more than Oracle had leased in the past. The company recently launched cloud availability regions in Northern Virginia, London, and Turkey, following the launch of its first region in the Phoenix market. Each region starts with a multi-megawatt two- or three-site deployment, and Oracle is nowhere near being done with expanding the geographic reach of its new cloud platform. About two-thirds of the nearly 30 largest data center leases signed in 2016 in North America were signed by hyperscale cloud service providers, according to NADC. In addition to Microsoft and Oracle, they included Salesforce, IBM SoftLayer, and Box. Read more: Who Leased the Most Data Center Space in 2016? Growth Slowing Down for Smaller Players The trend doesn’t mean the retail colocation data center market is declining, Structure pointed out. It remains a healthy market that’s “on a positive growth trajectory.” Most of the growth, however, is concentrated at the top of the market, driven by the largest providers, Jabez Tan, research director at Structure, who co-authored the report, said in an interview with Data Center Knowledge. The bottom and middle of the market are seeing growth slow down as cloud providers chip away at the overall retail colocation revenue. The addressable market for smaller colocation providers who aren’t operating at multi-region scale is shrinking, as they are essentially targeting local small and mid-size businesses, and those businesses are prime candidates for moving applications to the cloud. Many smaller providers have been trying to accelerate revenue growth by adding more sophisticated managed services capabilities, Tan pointed out, but “a lot of them are not growing as fast.” From Carrier Neutrality to Cloud Neutrality Another major change being forced by the cloud is a shift of focus from carrier neutrality in colocation data centers to cloud neutrality. As more and more enterprises move workloads to the cloud, data center companies expect them to want to use multiple cloud providers, so offering easy access to as many clouds as possible has become a big part of the strategy for colocation providers. Some providers (especially Equinix) have been talking about the need to enable multi-cloud strategies for data center customers for several years now. However, there is no evidence that actual multi-cloud deployments are taking place en masse. For now, multi-cloud appears to be more of a table-stakes effort for colo providers. “I’m seeing it in very early stages,” Tan said. “It’ll start to develop over time.” Asia Pacific Expected to Overtake North America Another future development Structure is projecting is that Asia Pacific will soon outgrow North America in terms of colocation data center market share. China will continue driving most of the growth, but the region is replete with emerging markets, such as Malaysia and Thailand, feeding on the momentum in mature markets, such as India, Japan, Singapore, and Australia, Tan explained. This combination will result in Asia Pacific outgrowing North America’s colocation data center market share by 2020, according to Structure’s projections. Here’s how Structure estimates the balance of power in the global colocation market will shift over the next three years: You can buy the latest Global Data Center Colocation Marketshare report by Structure Research here. (Comment on this)
5:35p	Facebook Data Center Coming to Denmark *Updated with comments from Facebook A company official has confirmed earlier reports that a Facebook data center project was underway in Denmark. Niall McEntegart, Facebook’s director of data center operations for the EMEA and Asia-Pacific regions, made the announcement at a press conference Thursday, Reuters reported. The future facility outside of Odense, Denmark’s third-largest city, will be the third data center outside of the US Facebook will have built on its own. The company leases data center space in at least one other international location: Singapore. It will also be the second Facebook data center in the Nordics, where several web-scale companies have chosen to build infrastructure for their global platforms. The region is attractive because of plentiful low-cost power, renewable energy sources (mostly hydro), cool climate and a friendly tax environment. Read more: Facebook Data Center FAQ Facebook operates a data center in Luleå, Sweden; Google has one in Hamina, Finland; Yandex, Russia’s answer to Google, has one in Mäntsälä, Finland; and Apple has one in Viborg, Denmark. Details on the Facebook data center project near Odense, where the company acquired a 0.5 square kilometer plot of land last year, are scarce. McEntegart told local press that the company expects it to cost more than $100 million. Rendering of Facebook’s future data center campus outside of Odense, Denmark (Image: Facebook) See also: Inside the Facebook Data Center in Sweden (Video) Facebook currently plans to construct two data center buildings at the site, about 270,000 square feet each, as well as a 70,000 square foot administrative building, a company spokesperson wrote in an email to Data Center Knowledge. The data center design will include features typical for Facebook, such as a cooling system that combines free outside-air cooling with indirect evaporative cooling, McEntegart wrote in a blog post. The company plans to power the facility with “100 percent clean and renewable energy.” According to Reuters, the site is expected to come online in 2020. For a comprehensive look at Facebook’s data center infrastructure, visit the Facebook Data Center FAQ section on DCK. (Comment on this)
9:16p	Rationalizing the Move Toward the Software-Defined Data Center to Achieve IT as a Service Michael Elliott is Cloud Evangelist at NetApp. Consumers today are moving toward an “Everything-as-a-Service” model. Businesses have the same expectations for their IT department. They want IT-as-a-Service (ITaaS). With the shifts in the economic purchase cycle, organizations are embarking on digital transformation, the development of new competencies built around the capability to be more agile, consumer-oriented, innovative, connected, aligned and efficient. IT is expected to be agile, responding to reduced time to market pressure, all while managing cost and reducing complexity. These business realities are universal and have always existed for the CXO. What has changed now is increased competition from new sources, and often from companies that are born in the cloud. Small startups can shake the industry, leaving traditional market leaders out of business rapidly. At the core of all this transformation is the evolving data center trying to keep up with business objectives. For IT, the Software-Defined Data Center (SDDC) can provide a strategic approach to support the goals of the business and provide the agility and flexibility to thrive with digital transformation. Traditional Data Center Design Silo Applications Pictured below is what most recognize as the typical data center design. Every department, every application, has its own infrastructure. Most traditional Fortune 100 companies use a similar design principle for their data center. However, in today’s changing environment, this design architecture only limits IT’s ability to effectively and efficiently serve the business goals. Diagram 1: Traditional data center design The promise of the SDDC breaks this siloed approach. It goes beyond traditional abstraction and establishes a universal plane to serve the entire data center structure. SDDC elevates lower level IT functions such as provisioning storage, database, networking, hypervisors, into services that can be consumed by higher level functions. The SDDC is, in essence, an integrated abstraction layer that defines a complete data center by means of a software layer that connects the physical, virtual, security and management layers. Diagram 2: Software Defined Data Center Design Encapsulation the Data Center via Fabric Layers In the new SDDC design architecture shown in diagram 2, each individual function is encapsulated via a fabric layer. The physical, virtual, management and security layers are all aligned into fabrics that represent a layer of abstraction to be presented to adjacent fabrics via APIs. These APIs act as the communication mechanism from which every physical and virtual component can be accessed and interfaced. With SDDC, developers who have never formatted a hard drive will now be able to provision terabytes of data without knowing or caring about how to access the underlying infrastructure. APIs will be invoked to access storage, initiate a database, allocate bandwidth, or even move applications to another region. A web application developer will be able to set up complex load balancing environments without ever logging into a router. The Software Defined Data Center will be the core principle for enabling IT as a Service. Benefits of the Software-Defined Data Center SDDC is designed to support all workloads in a holistic approach and to do so in the most optimal way possible across the entire data center. To achieve this, a properly configured SDDC must exhibit the following three main principles: The SDDC must be dynamic and adaptive in its ability to respond to changes in the resource workload. This adaptability should be automated and built on defined configurations and according to the demands of the applications it runs. Automation is the hallmark of a well-defined SDDC. When using software to define and access the data center ecosystem, the framework must have built-in intelligence to eliminate complexity and create elastic computing without needing direct human guidance. Resiliency is key. SDDC must be able to compensate for hardware and software failure. Coupled with automation and adaptability, the SDDC should be automated in its approach to adapt to possible problems and continue with the highest level of availability. Proposed Value of SDDC With a properly configured SDDC, the agility, resiliency, efficiency and productivity of a data center can be improved significantly. A few of the main benefits that can be achieved include: Unified IT service delivery Improved IT staff productivity Simplified administration / operations Faster provisioning Single point of support This doesn’t mean you can go out and purchase a SDDC solution and have it up and running over-night. “One size fits all” options don’t exist when it comes to SDDC. The recommended course for every IT leader requires weighing various benefits and tradeoffs specific to their environment. To spur conversation, the chart below provides a suggestion for how to approach this process: Option Approach Benefit Risk Easy Button Implement Unified / Hyper Converged System Easier to implement, easier to run Vendor Lock-In, Scale VMware Centric Adopt Cloud Foundation Leverage skill set you may already have Cost, cost, cost Microsoft Centric Azure Pack Leverage existing investment in Microsoft Evolution is slower than other solutions Open Standards OpenStack Goodness of Open Standards Waiting on Open Standards evolution to match existing solutions Organizations that have standardized on Microsoft or VMware will probably find that growing within that environment makes practical sense. Both companies are pushing their version of the SDDC to enable data centers into the future. Other organizations might find that they want to begin the journey with a unified or hyper-converged architecture. Still others might look to open standards and adopt OpenStack as their SDDC of the future. There is no right or wrong answer, only what fits into their future data center evolution strategy. Conclusion Utilizing SDDC to create IT as a Service provides a strategic roadmap for IT leadership. It sets the founding principle on how a data center needs to and will evolve; it creates an evolutionary path for the data center. The Software Defined Data Center can be a strategic approach to ensure the data center can support the goals of the business and provide the agility and flexibility required to enable the business to embrace and thrive. Opinions expressed in the article above do not necessarily reflect the opinions of Data Center Knowledge and Penton. Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library.     (Comment on this)
9:58p	Alibaba’s Deal to Promote Its Cloud at the Olympics Is Worth $800M (Bloomberg) — Alibaba Group Holding Ltd.’s deal to sponsor the Olympic Games through 2028 is worth $800 million, according to a person familiar with the matter. The agreement, the biggest in the Olympic movement’s history, would help the Chinese e-commerce giant gain exposure across the world, putting it on the same footing as a dozen or so “ TOP” Olympic partners, like Coca Cola Co. and Samsung Electronics Co. in the highest rung of sponsorship. Alibaba will provide online computing services and data analytics for the sporting contest, while creating a marketplace for official merchandise. It will also help develop an online video channel for viewers in China, the world’s largest consumer market. “This is so much more than about marketing or sponsorship,” said Michael Payne, a former marketing head of the  International Olympic Committee who was part of a team that put the deal together with Beijing-based sports consultancy Shankai Sports. “It is potentially the single biggest, groundbreaking partnership the IOC has done to date.” Read more: Alibaba Cloud to Launch its First European, Middle East Data Centers as Part of Global Push Neither the IOC nor Alibaba disclosed the size of the agreement. Alibaba declined to comment on the reported financial terms and the IOC didn’t respond to an e-mail seeking comment. Alibaba becomes one of the few Chinese sponsors, such as Lenovo Group Ltd., to pay for the right to sport the iconic five-ring logo. The agreement also makes Alibaba the first Chinese company to sign on as a partner for the 2022 Winter Games in Beijing. The company typically eschews costly marketing, but is keen to showcase its nascent cloud computing business on an international stage while reaching out to consumers around the world. For the IOC, its involvement spells greater Chinese engagement and, potentially, revenue. “It’s an insightful deal by (Alibaba founder) Jack Ma, in the sense that it makes Alibaba instantly as credible as a company like Coca Cola, Visa, or McDonald’s,” said Rick Burton, a professor of sport management at Syracuse University and a former U.S. Olympic Committee chief marketing officer. “For Companies in the U.S. like Amazon or Google or Facebook, it’s symbolically launched Alibaba as an international player to be reckoned with.” See also: Alibaba’s Cloud Arm Set for Centerstage as E-Commerce Plateaus The IOC’s sponsorship agreements are typically part cash and part service, with companies providing their expertise to help put together Olympic Games. In return, the companies get the biggest platform to showcase their skills, according to Tim Crow, chief executive officer of London-based Synergy, a sports-marketing consultancy that supports Olympic sponsors. Fighting Counterfeiters For Alibaba, the partnership also adds pressure on the company to fight sales of counterfeit merchandise. In December, the U.S. Office of the Trade Representative added Alibaba to its “notorious marketplaces” list of companies that violate intellectual property rights. As host to more than 12 million businesses that sell more than a billion items, policing such a vast digital world is difficult, Alibaba’s Ma said in a press conference at the World Economic Forum in Davos, Switzerland, when asked about seemingly counterfeit Olympic memorabilia on the site. The company has roughly 2,000 people working on the problem and is adding new technology to better scrub its sites, Ma said. “It’s difficult to clean all the dirty things in one night,” he said. It’s been almost a decade since Chinese enthusiasm for the Olympics peaked with the 2008 Beijing Summer Games, when the country emerged as a dominant athletic powerhouse. The nation’s medal showing at the Rio de Janeiro games last year, however, was criticized back home. Read more: China’s Kingsoft Aims to Take on Alibaba in Cloud Computing Major Chinese businesses have started investing heavily in sports amid a call from the country’s government to grow the sector. A national plan announced in 2015 contains the audacious goal of spurring an industry worth 5 trillion-yuan ($747 billion) by 2025. Since then Chinese companies, led by some of the country’s richest men including Ma and Dalian Wanda Group Co. Chairman Wang Jianlin, have secured assets at home and abroad. Wanda in 2015 became the first top tier sponsor of soccer governing body FIFA. Alibaba will kick off its Olympic tour in Tokyo in 2020. Companies including Canon Inc., Nippon Life Insurance and Fujitsu Ltd. are already paying upwards of 15 billion yen ($125 million) for their own partnerships, according to Japan’s Kyodo News. The move dovetails with its long-term ambitions. Alibaba wants to get half its revenue from outside its home country, yet as of 2016 three-quarters of sales still come from China. It’s been touting that dominant home-market share to try and get U.S. merchants to use its sites to sell to Chinese consumers — a way to offset slowing growth at home — but Alibaba remains an unfamiliar name to many. Its cloud business — modeled on Amazon.com Inc.’s AWS — is its most international and, though just a few years old, is already close to breaking even. Alibaba has now placed cloud at the heart of its global expansion, eyeing top share in Japan in two years and beefing up its presence from the Middle East to the U.S. The service already hosts more than a third of China’s websites. (Comment on this)

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