Thursday, February 16th, 2017

Time	Event
1:11a	Equinix Accelerates Global Data Center Expansion Equinix added five locations to the list of nearly 20 announced data center expansion projects already underway. The world’s largest retail colocation data center provider said Wednesday that it expects to spend $175 million on data center construction in Chicago, Toronto, Amsterdam, Rio de Janeiro, and Dubai. “We are scaling significantly faster than our peers,” Equinix CEO Steve Smith said on the company’s fourth-quarter earnings call the same day. Skyrocketing growth in internet video and other online services, cloud services, and outsourcing of enterprise data center footprint to colocation providers has translated into a boom for data center providers like Equinix over the recent years. Competing for the opportunity, they have been expanding by building and acquiring data center facilities. See also: Here are the 10 Largest Data Center Providers in the World In addition to simultaneous construction in more than 20 locations, Equinix recently acquired 24 data centers in North and South Americas from Verizon. That’s after it closed the acquisition of the European heavyweight TelecityGroup early last year and Japan’s Bit-isle at the end of 2015. On Wednesday’s call, Smith described the Verizon deal as a “transformative acquisition.” It brought the company’s total footprint to nearly 180 data centers in 44 metros across 22 countries. Most importantly, however, it brought under Equinix’s control the massive NAP of the Americas carrier hotel in Miami, which is a primary network interconnection hub between the US and South American markets, and a large campus in Culpeper, Virginia, which Equinix views as strategically important because of its large concentration of federal government customers. Read more: Why Equinix is Buying Verizon Data Centers for $3.6B A big portion of the company’s year-over-year revenue increase in 2016 was attributable to Telecity ($400 million) and Bit-isle ($149 billion). Equinix’s full-year 2016 revenue was about $3.6 billion – up 33 percent from 2015 but only 14 percent organic growth in constant currency. The company’s first-quarter revenue, executives warned, is likely to suffer from LinkedIn moving its equipment out of some 1,300 cabinets across numerous Equinix data centers in North America. LinkedIn has been transitioning to a hyperscale data center strategy, consolidating its footprint into fewer large-scale company-run facilities. The churn will leave a $6.8 million dent in Equinix’s first-quarter revenue, CFO Keith Taylor said on the call. Equinix also announced on Wednesday the addition of Salesforce to the list of cloud providers whom customers can connect to via private network links that bypass the public internet. This is a core part of the data center company’s current strategy, meant to attract more large enterprise customers that want to use public cloud services but require the reliability and security of private network connections to those services. Read more: You Can Now Plug Directly Into Salesforce Servers at Equinix Data Centers (Comment on this)
5:14p	Why is IoT Popular? Because of Open Source, Big Data, Security and SDN By The VAR Guy Why is everyone talking about the Internet of Things (IoT)? It’s not because the IoT is a new concept — it’s not — but rather because the IoT intersects with several other key trends in the tech world, from open source and big data to cybersecurity and software-defined networking. If you think the IoT is a new thing, think again. The term Internet of Things has been around since the late 1990s. Devices other than computers and phones have been connecting to the Internet for decades. Neither the concept nor the substance of the IoT is very novel. The IoT and Everything Else Yet it has been only in the past couple of years that the IoT has become such a big deal. Why? A large part of the answer is that the IoT is based on, complements or extends other highly influential technological trends that shape the way we compute today. Those trends include: Open source. The IoT isn’t built solely using open source software, but open source plays a key role. Linux serves as the operating system for many connected devices. Open source networking standards make it possible for devices from different vendors to communicate. Some IoT devices are even designed to be  hackable by users in a way that extends the open source software concept to include open hardware. In all of these ways, the IoT plays on open source’s strengths and brings open source to new frontiers. Big Data. The IoT promises to take big data to a new level. IoT devices not only generate huge amounts of information, which can then be fed to data analytics tools. They also rely on data-based logic in order to perform many of their “smart” functions. Take your Nest thermostat, for example. It collects data from your home, then runs analytics based on the data it collected along with external information (like weather reports) to predict when to turn on your furnace. Cybersecurity. Security and privacy aren’t new concerns. But they are on the minds of consumers now more than ever, thanks to the seemingly never-ending reports of breaches at major organizations. The IoT serves both to feed and to alleviate those concerns. IoT devices raise huge new security challenges, especially when it comes to things like critical infrastructure. But they also offer ways to help keep users more secure by adding extra barriers of defense to data and persons. Software-defined networking (SDN). The shift from physical network infrastructure to networks that are composed mostly of virtual, software-defined devices and links is revolutionizing the way information is exchanged. SDN and the IoT go hand-in-hand. SDN is essential for handling the networking demands of the IoT, while the IoT provides new use cases for SDN. The IoT’s relationship with these trends defines the IoT’s relevance today. People weren’t talking about the IoT ten years ago because that time, open source, big data, cybersecurity and SDN were not nearly as important as they are now. But that has changed, and the IoT is ready for primetime thanks to other developments across the channel. This article originally appeared on The VAR Guy. (Comment on this)
8:52p	Will the Submarine Cable Boom Drive More Revenue to Colos? As cloud giants seek to control their bandwidth destiny by funding submarine cable projects, commercial data center providers are jumping on the new business opportunities those projects create, locating facilities near future cable landing stations to provide access points for network, cloud, content, social media, and enterprise customers. While it’s difficult to show correlation between the rapid increase in the number of submarine cables under construction and elevated data center leasing demand using hard numbers, it’s logical that the exponential increase in data flowing through new and existing cables will benefit data center providers with facilities located where they land. Mining Sunken Treasure Equinix, the world’s biggest retail colocation data center provider, recently won deals to gain access to about a dozen cable landing locations and continues to pursue two dozen more around the globe, CEO Steve Smith said while speaking at an investor conference in January. He highlighted the trend again on the company’s earnings call this week. “These undersea cables generate traffic, which is lifeblood for Equinix,” he said. Read more: Facebook and Google to Build Transpacific Submarine Cable Amazon’s Cloud Arm Makes Its First Major Submarine Cable Investment Data Center Connectivity: Dare to Bypass New York? Transpacific Data Center Connectivity Hub Launches in Seattle Equinix and its rivals, such as Digital Realty Trust and Interxion, as well as fiber network operators, are well-positioned to benefit from all the submarine cable construction activity, RBC Capital Markets managing director Jonathan Atkins wrote in a recent market research note. The Survey vessel is exploring transatlantic routes for the future Hawaiki Submarine Cable, funded in part by Amazon (Photo: Hawaiki Submarine Cable) Smith’s viewpoint dovetails with a comprehensive data center research note published in mid-December. Managing director Jonathan Atkins and his team at RBC Capital Markets included a detailed overview of 2015-2018 sub-sea cable deployments in this report. “We anticipate these initiatives could be positive catalysts for attracting connectivity-centric business for the data center operators,” he wrote. Here are some of the recent deals data center providers have won to give their customers access to new landing stations, as highlighted in the RBC report: Interxion: Marseilles, France Global Switch: Sydney and Singapore CoreSite: Boston; One Wilshire (LA-1) and (LA-2) in Los Angeles; New York Digital Realty: New York (32 Ave of the Americas, 111 8th Ave, 60 Hudson St.); Hillsboro, Oregon Equinix: New York (NY4); London (LD4); Germany; Silicon Valley; Seattle; Los Angeles; Melbourne (ME1); Sydney (SY1); Singapore (SG3); Jakarta (JK1); Sao Paulo (SP2); Sydney (SY3) and (SY4) in 2018 The RBC report was published one day before Equinix announced its blockbuster data center portfolio acquisition from Verizon in December, which also increased the number of cable landing stations Equinix has access to. The exterior of 111 8th Avenue, one of the premier carrier hotels in Manhattan. Submarine Cable Economics A new and potentially disruptive pricing model can make one transatlantic cable offering particularly attractive for non-traditional enterprise customers. It offers flexibility to access international cloud and IT service providers on an as-needed basis, lowering the upfront cost of that kind of access. Aqua Comms is the developer of AE Connect, the first carrier-neutral submarine cable linking New York with Dublin, and London. Both Digital Realty and Equinix have signed agreements to connect their data centers, along with carriers AT&T and CenturyLink. “In some respects, it is like terrestrial real estate development,” Aqua Comms CEO, Nigel Bayliff, said in an interview with Data Center Knowledge. “Sub-sea cable operators strive to have from 30 percent to 50 percent of capacity pre-leased to credit customers on long-term leases. Although these submarine cable anchor tenants negotiate favorable pricing, they must pay upfront for these 20-year or 30-year leases in a lump sum. These tenants also pay a small maintenance fee annually.” The anchor leases allow a new cable project to proceed, but most of the profits reside in smaller lease agreements. Bayliff expects digital content to drive many such deals. For example, he expects broadcasts of major sporting events, such as World Cup and the Summer Olympics, to be streamed globally, in 3D, with unlimited camera angles, allowing viewers to have a virtual reality experience. The bandwidth required for these types of streaming applications will certainly help ring the register for cable operators like Aqua Comms. Elastic Undersea Bandwidth Aqua Comms is able to provide on-demand transcontinental connectivity services through a partnership with the Australian SDN-enabled interconnection provider Megaport, which recently announced an offering designed to attract both traditional and non-traditional tenants to use the AE Connect system. Megaport CEO Denver Maddox explained in a blog post how this joint offering will work: “If your infrastructure is physically located in New York City and you wish to directly connect to the availability zone of a cloud operator in London, you don’t need to be physically located in London to make that happen. Simply configure your New York-based Megaport with a VXC [virtual cross connects] to your chosen provider and, in less than 60 seconds, you have a direct connection at the level of capacity you need.” A key point is customers are no longer forced to forecast bandwidth needs and sign a contract for a year or more – which has typically been the case with carrier-owned submarine cables. Megaport and Aqua Comms offer elastic capacity and usage-based billing. This flexibility should encourage new use cases, as Megaport provides enterprise customers an affordable way to self-provision elastic capacity on the AE Connect cable system. This is the first phase of a larger partnership between Aqua Comms and Megaport that may include additional capacity and terrestrial landings in the future. Edge Content Spans Continents EdgeConneX is best known for providing low-latency solutions in edge data center markets to help content and cloud companies optimize delivery of their services to end users. However, coastal EdgeConneX facilities are also strategically located with an eye toward submarine cable landing locations. Its backers, including Comcast Ventures and Liberty Global, have both colocation and content distribution needs. Liberty has significant operations in Europe and Latin America. In addition to having rolled out two dozen US edge data centers during the past few years, EdgeConneeX has also been constructing massive projects for hyperscale customers, such as Microsoft, outside of Chicago, Dublin, London, and Amsterdam. See also: EdgeConneX to Tap into Submarine Cables for Better Data Center Connectivity Investor Takeaway It is too early to tell just how disruptive Aqua Comms and Megaport’s self-provisioning and on-demand billing for international bandwidth will be for the colocation industry. Equinix’s IBX Platform and cloud exchange are currently the gold standard for connectivity. Asked about the edge at the conference earlier this year, Smith said, “Equinix can cover almost any enterprise requirement from its existing footprint.” He seemed to dismiss the edge as being any kind of threat. However, several competitors with strategically located data centers and deep pockets are now offering colo customers SDN-enabled fabrics with elastic pricing. Competitive offerings engineered to access submarine cable routes should be suitable for at least a portion of SMB and FTSE Global 2000 enterprise applications. Investors should closely watch how the competitive landscape around connectivity hubs evolves over the next few years. (Comment on this)

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