Friday, June 30th, 2017

Time	Event
4:10p	Top 10 Data Center Stories of the Month: June 2017 Here are the 10 most popular stories that appeared on Data Center Knowledge this month: Switch Backs Away from Uptime’s Tiers, Pushes Own Data Center Standard – The company is proposing a new standard it calls Tier 5, which includes data center design elements other rating systems cover, as well as elements it says they lack. British Airways: Engineer Wrongly Disconnected Data Center Power Supply – An engineer had disconnected a power supply at a data center near London’s Heathrow airport, causing a surge that resulted in major damage when it was reconnected, Willie Walsh, chief executive officer of parent IAG SA, told reporters in Mexico. Playboy’s First Data Center, or Birth of the Internet Colo – The debut episode of The Data Center Podcast, featuring Peter Ferris, one of the data center colocation industry’s forefathers. Switch’s Las Vegas Data Center Stronghold Reaches North of 2 Million Square Feet – Switch has officially launched the latest massive facility on its homebase Las Vegas data center campus, bringing its total capacity in Sin City to more than 2 million square feet and about 315MW. Switch’s Las Vegas 10 data center (Photo: Switch) Most Data Center Outages aren’t Caused by Tech Failure – Many critical industries such as nuclear energy, commercial and military airlines—even drivers’ education—invest significant time and resources to developing processes. The data center industry … not so much. DuPont Fabros Deal Gives Digital Realty More Firepower in the War for Cloud Deals – Acquiring DuPont Fabros Technology significantly expands Digital Realty Trust’s play in key existing and emerging North American data center markets — especially its ability to win large, multi-megawatt deals with hyper-scale cloud platforms — but it also ensures one of the several well-financed new players doesn’t acquire DuPont Fabros and turn its strong position in the top metros against Digital. At nearly 450,000 square feet, ACC7 in Ashburn, VA is the largest data center in DuPont Fabros Technology’s portfolio. (Photo: DFT) DCK Investor Edge: Digital Realty Signs Biggest Hyper-Scale Deal After All – If there were any lingering questions regarding a “new normal” for wholesale data center leasing, Digital Realty’s acquisition of DuPont Fabros put them to rest. Super-wholesale is now officially an asset class of its own. TierPoint Now Has a Huge Rival in Secondary Markets – If and when it closes, the $1.67 billion deal to take Denver-based ViaWest off the balance sheet of its current owner, the Canadian telco Shaw Communications, will not only give Peak 10 nation-wide reach, it will make it one of the two biggest player in so-called tier-two US data center markets. HPE’s Gen10 Servers Will Have Security Drilled into Silicon – The security feature works at the firmware level, utilizing custom HPE silicon. HPEs iLO firmware chip. Photo: HPE Microsoft Joins Hot Open Source PaaS Project Cloud Foundry – Several years ago, news of Redmond shelling out bucks to become a card carrying member of an open source project would’ve been heresy. Then came cloud. Stay current on data center industry news by subscribing to our RSS feed and daily e-mail updates, or by following us on Twitter or Facebook or join our LinkedIn Group – Data Center Knowledge (Comment on this)
4:41p	Tech Mega-Buyouts Edge Toward Comeback as BMC, CA Plot Deal Kiel Porter and Alex Sherman (Bloomberg) — Four years after Blackstone Group LP and Silver Lake Management battled to take Dell Inc. private, buyout firms are back in the market for big leveraged technology deals. BMC Software Inc., owned by Bain Capital and Golden Gate Capital, and CA Inc. are considering a potential deal that would see the software companies combine as part of a transaction to take CA private, according to people familiar with the process. CA shares rose as much as 16 percent Tuesday, valuing the New York-based company at more than $15 billion. If a deal goes ahead, and if it’s structured as a leveraged buyout by the private equity firms followed by a combination with BMC, it would be the biggest LBO of a tech company since Silver Lake and Michael Dell won the fight to buy Dell in 2013 in a transaction valued at almost $25 billion. Two years later, Dell announced its own mega-deal: the $67 billion acquisition of EMC Corp. Another big tech deal is also in the works, as a group led by Boston-based Bain and Japanese investors is the leading bidder for Toshiba Corp.’s memory chip business. The buyers have indicated that they’re willing to pay 2.1 trillion yen ($19 billion) for the semiconductor unit, people with knowledge of the matter have said. The parties are aiming to reach final agreement by June 28 and close by March, Toshiba said Wednesday. Private equity firms’ appetite for big deals has been tempered in recent years, with the specter of the leveraged-buyout boom of 2005 to 2007 still hanging over the industry. During that period, buyout firms spent huge amounts of money on about 20 supersized deals — each valued at more than $10 billion — many of which failed to deliver returns in line with expectations. Since the start of 2008, just one such deal other than Dell has been led by a private equity firm: Apollo Global Management LLC’s $12.3 billion acquisition of ADT Corp. last year. More Cautious Now, buyout firms are testing the waters again. As well as the potential BMC-CA deal, cloud-services company Citrix Systems Inc. has been working with advisers to seek possible suitors, attracting interest from private equity investors including Bain, Carlyle Group LP and Thoma Bravo, Bloomberg reported in May. There are signs, though, that the firms are being more cautious this time around: Discussions between Citrix and potential financial bidders have stalled because the company’s asking price was too high and the business too large, people familiar with the process said earlier this month. That’s a shift from the boom years, when private equity’s debt-fueled spending spree saw it triumph in several deals valued at more than $30 billion. Those included the record $48 billion buyout of TXU, now called Energy Future Holdings Corp., which was the only total equity wipeout of the 19 mega-deals. The company’s 2014 bankruptcy vaporized an $8.3 billion bet led by KKR & Co., TPG and Goldman Sachs Group Inc. Large Checks Leveraged buyouts, in which financial sponsors raise a large amount of debt to finance an acquisition, rely on banks’ willingness to write large checks. BMC and CA have already approached banks about putting together a debt package to finance the potential purchase of CA, said the people, who asked not to be identified because the information isn’t public. Talks are at an early stage and there is no guarantee a deal will be reached, the people said. BMC has been owned by Bain and San Francisco-based Golden Gate since 2013, when they took the company private in a deal valued at about $6.9 billion, according to data compiled by Bloomberg. The firms, which took a $750 million dividend from the company in 2014, may contribute new equity to help finance the deal for CA, the people said. BMC, Bain and Golden Gate declined to comment. Representatives for New York-based CA didn’t respond to requests for comment. Dry Powder As private equity firms grapple with record amounts of dry powder for acquisitions, they’re looking for more creative ways to deploy it, according to Stephanie Cohen, head of financial sponsors M&A at Goldman Sachs. Buyout firms are sitting on about $600 billion of capital, which is more than during the LBO boom that preceded the financial crisis, Cohen said Tuesday in a Bloomberg Television interview at the Goldman Sachs Leveraged Finance Conference in California. “They’re taking their portfolio companies and turning them into strategic acquirers,” Cohen said. Structuring deals that way allows private equity firms to compete more equally with corporate acquirers, which can typically bid higher than financial buyers in auction processes. It also gives a buyout firm the chance to benefit from synergies between the company it already owns and the new asset, as well as creating a potentially bigger paycheck once the combined, larger business is taken public or sold. Watch the full interview on private equity’s dealmaking potential here Computer Associates CA, led by Chief Executive Officer Michael Gregoire, develops applications for cloud and mobile computing, with most of its revenue coming from maintenance contracts and subscriptions. Founded in 1976 as Computer Associates International, the company went public in 1981 and eight years later was the first software company to reach $1 billion in revenue, according to its website. It has grown through smaller acquisitions, agreeing to buy app-security testing firm Veracode Inc. for $614 million in cash, after announcing the acquisitions of Automic Holding GmbH in 2016 as well as Rally Software Development Corp. and Xceedium Inc. in 2015. Acquisitions have helped offset slowing organic sales growth at CA’s mainframe business, according to a report from Bloomberg Intelligence. The company’s mainframe solution unit generated about 54 percent of revenue in fiscal 2017, while enterprise solutions contributed 39 percent and services made 7 percent. Legacy mainframe software vendors have proved popular among private equity firms looking for stable returns from their subscriber base. A year after the BMC buyout, Compuware Corp, a Detroit-based seller of business software, agreed to be taken private by Thoma Bravo in a deal valued at $2.5 billion, following pressure from activist investor Elliott Management Corp. “An influx of capital allocated to the sector and favorable debt terms means we can expect to see more leveraged buyouts in the tech space in the foreseeable future,” said Ron Murphy, a partner at EY’s Americas transaction advisory services unit. (Comment on this)
5:02p	Coming Microsoft Reorg to Support Cloud-First Strategy: Report Brought to you by IT Pro Microsoft is expected to unveil a business reorganization plan on July 5 that will support its shift towards a cloud-first organization, according to a report Friday by the subscription-based Puget Sound Business Journal. It’s been several years since Microsoft introduced its “mobile first, cloud first” mantra, but the catchphrase continues to guide the company even as it invests in emerging areas like machine learning and artificial intelligence, gaining ground on Amazon Web Services (AWS) market share. At the beginning of June, Microsoft consolidated and realigned some of its cloud, AI and data platform business units, a report by ZDNet said. Among the changes was the creation of a new Cloud AI Platform organization, to be led by Corporate Vice President Joseph Sirosh; the organization will oversee Azure Search, Azure Machine Learning, the Microsoft Bot Framework, R Server and the Algorithms and Data Science Solutions team. Earlier this year, Microsoft implemented changes to its partner and services teams under the Worldwide Commercial Business group, which the company said didn’t result in any job losses. But since Microsoft CEO Satya Nadella took over, the company has shed about 4 percent of its workforce, according to a report by The Street. This article originally appeared on IT Pro. (Comment on this)
5:30p	‘Wiper Malware’ in Global Attack Actually Destroys Data Brought to you by MSPmentor A malware strain at the center of this week’s global attack that crippled networks in multiple countries was not ransomware as first suspected, but rather a “wiper” that encrypts data and makes it unrecoverable, top cyber security experts now say. The alarming revelation means the hacker campaign that struck Europe, the U.S., France, Italy, Germany and elsewhere since Monday, was merely posing as a ransomware attack and is actually intended to destroy target files. What was originally believed to be a variant of the Petya ransonware – which was stolen last year from a National Security Agency cyber weapons toolkit – has since been determined to be an entirely new type of malware dubbed “ExPetr.” “Our analysis indicates there is little hope for victims to recover their data,” a statement from Kaspersky Lab said. “We have analyzed the high level code of the encryption routine and we have figured out that after disk encryption, the threat actor could not decrypt victims’ disks.” The problem lies with the new malware’s inability to obtain the installation ID needed for decryption. “In previous versions of ‘similar’ ransomware (like Petya/Mischa/GoldenEye) this installation ID contained the information necessary for key recovery,” the statement from the security software vendor explained. “ExPetr does not have that, which means that the threat actor could not extract the necessary information needed for decryption. “In short, victims could not recover their data.” This week’s attack marked the second time in as many months that hackers crippled networks by locking computers and demanding $300 ransoms. Last month’s WannaCry ransomware campaign resulted in more than 200,000 attacks in more than 150 countries, enabled by successful spear-phishing and unpatched Windows operating systems. The ensuing rush to update Windows might have facilitated the latest attack. “The most significant discovery to date is that the Ukrainian website for the Bakhmut region was hacked and used to distribute the ransomware to visitors via a drive-by-download of the malicious file,” Kaspersky officials said. “To our knowledge no specific exploits were used in order to infect victims. “Instead, visitors were served with a malicious file that was disguised as a Windows update.” Who would commit such an attack and why remained an open question today. Matt Suiche, founder of cyber security firm Comae Technologies, suggested the campaign appears designed to conceal a state-sponsored attack against Ukraine. That country was hardest-hit by the malware, which targeted power companies, airports, banks, state-run television stations, postal facilities and large industrial manufacturers. “We believe the ransomware was, in fact, a lure to control the media narrative, especially after the WannaCry incident, to attract the attention on some mysterious hacker group rather than a national state attacker,” Suiche told The Hacker News. Decrypting the data would have been problematic nonetheless, because the German email service provider cited by the hackers in ransom instructions cut off the cyber criminals’ access to the account shortly after the attacks began. Thus, even victims who paid the bitcoin ransom would not have been able to email proof or obtain decryption keys. Kaspersky Lab offers the following advice to network administrators: “Use the AppLocker feature of Windows OS to disable the execution of any files that carry the name “perfc.dat” as well as the PSExec utility from the Sysinternals Suite.” This article originally appeared on MSPmentor. (Comment on this)

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