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Wednesday, August 9th, 2017
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| 12:00p | Exclusive: San Francisco to See Its First Data Center Build in More Than a Decade No colocation data center has been built in San Francisco since the early 2000s, when hosting company AboveNet (now defunct) built the city’s now famous data center at 365 Main Street. That building is now owned by Digital Realty Trust, and together with Digital’s other San Francisco facility, at 200 Paul Avenue, they are two of only a handful of commercial data centers in the city. At least one property, close to 200 Paul, has been marketed for data center development by various real estate agents over the years, but no-one has bitten, and the building at 1828 Egbert Avenue remains a commercial storage facility. San Francisco is a notoriously difficult city to build in and has some of the country’s highest electricity rates. It’s also difficult for PG&E, the utility that serves the area, to provide the kind of multi-megawatt energy feeders in the city a data center would require. Bay Area’s data center cluster is in Silicon Valley; that’s where virtually all of the region’s server-farm construction has taken place over the last two decades. But one developer is moving ahead with construction of what will be the first new commercial data center facility San Francisco will have seen in well over a decade. Fifteenfortyseven Critical Systems Realty, a Matawah, New Jersey-based data center builder and landlord, has acquired a piece of land at 400 Paul Avenue (right next to 200 Paul) and expects crews to put shovels in the ground sometime in the fourth quarter. The deal, on which fifteenfortyseven partnered with the Los Angeles-based real estate and infrastructure investment firm CIM Group, closed August 4. “That’s the starting gun,” Todd Raymond, fifteenfortyseven’s CEO and managing director, said in an exclusive interview with Data Center Knowledge. The partners bought the property in the city’s Bayview district from The Cambay Group, the Bay Area-based real estate developer that built 200 Paul in 1999. Cambay has been marketing it as a data center development site for several years and has already secured all the necessary permits from the city, Raymond said. “We’re essentially shovel-ready at this point.” The developer’s representatives have spoken with about a dozen companies interested in leasing space in the facility, he said. They include the full range of businesses you’d expect to be curious about data center capacity in San Francisco: hyper-scale cloud, social media, managed cloud, retail colocation, and international telecoms players. “I would say it’s not New York City financials,” Raymond said. But the project is fully funded, and the partners are not planning to wait until they close a contract with an anchor tenant to start building. They do plan to look for debt financing at some point in the future, ideally after an anchor tenant signs.
Rendering of fifteenfortyseven’s future data center at 400 Paul (Image: fifteenfortyseven) At the moment, the plan is to build a two-story, 187,000-square foot powered shell. PG&E has agreed to provide a 12MW power feeder to the site and another 12MW feeder once it completes a substation upgrade, according to Raymond. The property has two existing three-story buildings, which the developer plans to turn into office space for future tenants. While Raymond is optimistic that there is enough demand to lease the future data center at attractive rates, Jabez Tan, research director at Structure Research, said there does not appear to be pent-up demand in the city, due primarily to cost and availability of cheaper options elsewhere on the West Coast. “It has been hard to justify the premium to deploy directly in San Francisco when there are more cost-effective options to serving the Northern California market,” Tan said. Markets like Portland and Hillsboro, Oregon; Phoenix; Las Vegas; and Sacramento, where costs are much lower than in the Bay Area, have seen strong growth in recent years, while the two major colocation data centers in San Francisco, 365 Main and 200 Paul, “are still at modest utilization levels of 80 percent and 68 percent, respectively,” he said. It may be easier for the site to compete with Silicon Valley, where the data center market is tight on supply, and little land is available for new construction. The most attractive qualities of the building will be its location – San Francisco is a high-tech hotbed, and today has more tech-company offices than it’s ever had – and the potential for future tenants (or tenant) to interconnect with networks at the neighboring 200 Paul, one of the region’s primary peering sites. But while many IT shops still like to have their data centers near their offices so they can send their own technicians there, the industry is trending toward managing infrastructure remotely, and cost benefits almost always outweigh proximity benefits. (Amazon and Microsoft being headquartered in Washington State hasn’t deterred them from building out their largest cloud data center clusters in Northern Virginia, where land and power are relatively cheap, and where they can peer with a large number of networks.) Raymond, however, believes there are enough attributes to 400 Paul that will make it attractive to data center tenants. “There’s demand in urban San Francisco,” he said. Besides location and connectivity, there’s value in the future offices at the site. You could have a 10MW data center and 25,000 square feet of office space to house your entire tech-support office; and that combination is not readily available anywhere else in the area, he said. |
| 5:12p | Pernod Ricard, Maker of Absolut Vodka, Suffered Cyberattack in London (Bloomberg) — Pernod Ricard SA suffered a cyberattack this week at its London office, forcing some U.K. employees of the French distiller to turn in their computers to be checked for infection, people familiar with the matter said. While London appears to have been most affected, other sites may have been targeted as well, said one of the people, who did not want to be identified discussing private information. The producer of Absolut vodka and Chivas Regal Scotch whisky is the latest of several consumer-goods companies that have been hit by recent cyberattacks, disrupting operations. Nivea-maker Beiersdorf AG said earlier this month that an IT disruption caused about 35 million euros ($41 million) in lost sales in the first half. The same global attack affected thousands of computers at Durex condom maker Reckitt Benckiser Group Plc, causing an estimated loss of 1 percent of annual sales, or about 90 million pounds ($117 million). Pernod Ricard shares fell as much as 2.1 percent to an intraday low of 116.9 euros in Paris after news of the attack. A spokesman declined to comment. See also: Europe’s Cyber Victims Are Racking Up Hundreds of Millions in Costs |
| 5:44p | HPE Deal Big Switch’s Latest Step in Becoming VMware of Data Center Networks Two weeks after raising a $30.7 million funding round (bringing its total money raised to more than $120 milion), Big Switch Networks announced this week that Hewlett Packard Enterprise will sell its open networking data center switches with Big Switch’s software-defined networking (SDN) products. “It signals that the market adoption for disaggregated open networking is clearly growing,” said Susheel Chitre, Big Switch’s vice president of business development. The companies on Tuesday announced that HPE will resell Big Switch’s Big Cloud Fabric and Big Monitoring Fabric on three models of its Altoline open networking switches: the Altoline 6960, 6941 and 6921 switches. Big Cloud Fabric is Big Switch’s flagship software and allows cloud service providers, enterprise data centers and other customers to implement SDN. Big Monitoring Fabric is a network packet broker that allows IT administrators to monitor and secure their networks. Brad Casemore, IDC’s research director of data center networks, said the partnership should help Big Switch capture more market share in the still emerging SDN marketplace that includes competitors such as Cisco, Juniper Networks, Nokia’s Nuage Networks, and a host of startups. The agreement with HPE comes three years after Big Switch struck a similar deal with Dell (now Dell EMC). “[HPE] is obviously another significant player in IT infrastructure for data centers, so this will help Big Switch grow its presence in the marketplace,” Casemore said. “They’re already on a good growth trajectory, and this will help expedite that.” Big Switch tackles the market with an SDN controller that offers a single pane of glass to operate and manage the entire fabric as one logical switch. According to company executives, Big Cloud Fabric has built-in integration for VMware software-defined data centers, Red Hat OpenStack clouds, and Kubernetes/Docker container environments. Big Switch’s technology essentially provides hyper-scale network design to the masses, Casemore said. Companies with hyper-scale data centers, such as Alphabet’s Google, Amazon Web Services, and Facebook, pioneered the use of the disaggregated model, in which they purchased whitebox switches from an original design manufacturer and used open-source software or their own internal software to perform network orchestration and management, he said. See also: How Open Source is Changing Data Center Networking If done right, it lowers capital expenditures and increases operational efficiencies while providing IT administrators with the flexibility, agility, and automation they need to effectively manage their networks, Casemore said. “Big Switch is taking the SDN practices used by the cloud giants and bringing them to the other 99 percent,” he said. Big Switch chief marketing officer Gregg Holzrichter said the company hopes to emulate the success that VMware had with server virtualization and be to networking what VMware was to the server space. With HPE in the fold, the company hopes to add more partnership with other hardware vendors in the future, he said. “If you think back 12 to 15 years ago, when VMware was coming onto the scene and had a smart software layer and all the x86 server vendors partnered with VMware, we hope to do the same with networking,” he said. As for the HPE-Big Switch partnership, HPE is only selling Big Switch’s products on three Altoline switches for now, but the two companies are continuing to do testing and HPE may add more switches in the future, Chitre said. In the meantime, both companies will work together to provide customer support, he said. |
| 7:02p | Equinix Lands Latest SaaS Giant Partnership: SAP Equinix this week announced partnerships with two very different cloud service providers. One is with the German enterprise software giant SAP, whose Customer Relationship Management (CRM) cloud infrastructure can now be accessed directly via private network links inside Equinix data centers. SAP has second-largest CRM market share after Salesforce. The other deal is with Rescale, a provider of high-performance computing infrastructure as a service. Rescale’s IaaS cloud is also now accessible by Equinix customers through direct connections that bypass the public internet. Rescale will offer access to its new ScaleX HyperLink infrastructure to meet enterprise users’ burst requirements. In other words, if your on-premises data center cannot handle a spike in demand, you’ll be able to add cloud capacity temporarily using this service. A Big Deal for SAPThe partnership with SAP brings direct connections to the enterprise SaaS at eight Equinix data centers. This is important for SAP, considering that its biggest competitor in the CRM arena — industry leader Salesforce — began offering direct connections through Equinix in February. “SAP joined the Equinix Cloud Exchange platform to address customer requirements for enterprise hybrid architecture in an environment that lends itself to the very highest levels of performance and reliability,” Christoph Boehm, senior vice president and head of SAP’s Cloud Delivery Services, said in a statement. “With SAP’s traditional base of more than 300,000 software customers seeking ways to take the next step in a cloud-enabled world, SAP has established efficient capabilities to deliver on those requirements.” Direct connections to cloud services target enterprises, who are being courted by both data center operators and cloud providers. Since these connections bypass the internet, they are seen as all but doing away with security, latency and throughput issues that are thought to be keeping many enterprise customers from embracing public clouds. In June, Equinix’s major rival and landlord Digital Reality Trust released results of a study of direct connections between its data centers and IBM Bluemix, which revealed 50X less latency and more than 55X greater throughput. Security is also improved with direct connections, because data doesn’t mingle with internet traffic. SAP has much to gain through arrangements such as this one. The company has been paying a price for being late to the cloud game, which it entered in 2012, and doubtlessly hopes that partnering with Equinix will help its efforts to catch up. Citing 2016 figures, Forbes reported that Salesforce, which entered the cloud-based CRM space early, has seen its market share double since 2010 to 22 percent, while SAP has seen a decline from 15 percent in 2010 to around 11 percent. For Equinix, the worlds leading global colocation data center provider, deals like this are now business-as-usual. The company has long offered direct connections to all major IaaS public cloud providers — Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM Bluemix, and Oracle Cloud — and has been on a tear signing direct-connection partnerships with major enterprise SaaS providers like Microsoft 365, Google G Suite, Salesforce, and now SAP. Going after top SaaS providers has been a big part of the company’s strategy since at least 2015. “Equinix recognizes that enterprise cloud needs vary, and by aligning a company’s business requirements to the best cloud services they can create a more agile, flexible, and scalable IT infrastructure,” Charles Meyers, Equinix’s recently appointed president of strategy, services and innovation, said in a statement. See also: Equinix Positioning for Next Wave of Cloud Data Center Deployments Direct connections with SAP will initially be offered in Amsterdam, Frankfurt, Los Angeles, New York, Silicon Valley, Sydney, Toronto, and Washington, D.C., with more to be added later this year. Compute-Intensive Hybrid CloudThe partnership with Rescale also targets the enterprise, primarily by offering hybrid cloud customers a way to easily scale out from their on-premises infrastructure to the public cloud during times of peak demand. “Although many enterprises have already made the move to cloud for certain data services, many are reluctant to make the move for one of their largest investments: on-premise, high-performance computing,” Tyler Smith, Rescale’s head of partnerships, said in a statement. “Rescale helps ease the migration process with a hybrid and burst solution, making best use of existing and cloud resources in tandem, and the partnership with Equinix adds a compelling layer of ultra high-speed data transfer and best-in-class security, while allowing the enterprise to keep their preferred private/public cloud model.” Steve Steinhilber, VP of business development at Equinix, indicated that this partnership might be seen as adding to their data centers’ infrastructure in a way that will be enticing to potential enterprise customers. “By working with Rescale, we are able to add a big compute stack to our existing interconnection offerings and IaaS capabilities,” he said, “and it enables our customers to run high-performance computing jobs in a turnkey and on-demand fashion. Through colocation or just leveraging the Equinix platform, Rescale and Equinix are providing a holistic approach to compute intensive workloads.” Traditionally, most of Equinix’s users have been service providers. |
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