Welcome to the week’s roundup of all the largest information within the knowledge middle trade, curated, distilled, and put in context by Data Center Knowledge.
Switch Exploring Potential REIT Conversion
Switch and Elliott Investment Management, the info middle supplier’s largest Class A shareholder, are taking a detailed take a look at the corporate’s monetary construction, exploring a REIT conversion as one of many potential outcomes of the evaluate.
Elliott, a widely known activist investor, holds 11 % of Switch Class A shares. As a part of the method being kicked off, Switch plans so as to add Elliott portfolio supervisor Jason Genrich to its board of administrators. He might be one in all 4 Switch administrators on the REIT committee evaluating the conversion.
- Some of the biggest US-based knowledge middle suppliers function as REITs, together with Equinix, Digital Realty, CoreSite, QTS, CyrusOne, and Iron Mountain.
- REITs don’t pay company taxes in trade for an obligation to pay out dividends to their shareholders, who then pay taxes on these dividends.
- Switch inventory rose sharply on the announcement of the evaluate Friday, leaping from roughly $20 to $25 per share.
- The firm went public in 2017, with the opening IPO worth of $17 per share and a $4.2 billion valuation.
- Switch reported second-quarter earnings Thursday (see outcomes beneath).
QTS, Iron Mountain, Switch Report Solid Q2 Earnings
The US-based publicly traded knowledge middle operators’ 2021 second-quarter earnings season is now full. QTS, Iron Mountain, and Switch reported their outcomes this week, following last week’s reports by Equinix, Digital Realty, CyrusOne, and CoreSite.
All three operators that reported this week had a stable quarter, with wholesome income progress. (Numbers within the chart beneath)
- This might be the final earnings report we’ll see from QTS, which is within the means of being acquired and brought personal by Blackstone. Shareholder approval of the acquisition continues to be pending, with a vote scheduled for August 26. If the approval is secured, the deal is anticipated to shut earlier than the top of the third quarter.
- “We consider the introduced acquisition of QTS by Blackstone represents a robust return for shareholders whereas positioning QTS to attain our strategic goals in our subsequent section of progress,” QTS CEO Chad Williams stated in a press release.
Iron Mountain’s numbers within the chart beneath mirror the whole thing of its enterprise, which along with a rising knowledge middle operation additionally contains the doc storage and administration companies the now seven-decades-old firm is finest recognized for. (Iron Mountain is celebrating its seventieth anniversary this month.)
- Iron Mountain doesn’t escape income from its knowledge enter enterprise. The firm, nonetheless, stated its knowledge middle income grew 15.3% yr over yr within the second quarter.
- Iron Mountain stated it signed 12.6MW in leases through the quarter and now expects to have leased greater than 30MW within the full yr. Its earlier knowledge middle leasing steerage for 2021 was 25MW to 30MW.
A pair notes on the Switch numbers within the chart:
- Switch isn’t a REIT but, so FFO per share isn’t reported.
- The income quantity doesn’t embrace Data Foundry’s income for the quarter, which was $3.3 million. Switch closed its Data Foundry acquisition in early June.
Dropbox Says Energy Powering Its Storage Servers Is 100% Renewable
Dropbox introduced that the power utilized by storage servers in its knowledge facilities is now “lined by 100% renewable electrical energy.”
It’s unclear whether or not that 100% is achieved by way of offsets, renewable power credit, purchases of power that powers amenities instantly on the native grids, or a mix of all three. (A mix is the most definitely situation.)
- Dropbox said it’s making “important investments to acquire renewable power” this yr.
- Last yr it committed to sourcing one hundred pc renewable power for all its operations and reaching carbon neutrality for scope 1, 2, and three enterprise journey emissions by 2030.
- Complicating issues on the info middle aspect of issues is Dropbox’s reliance on a mix of on-prem knowledge facilities and cloud companies. It has to barter with its knowledge middle suppliers and cloud operators area by area to get renewable power to every web site.
- Even in locations the place it’s attainable to safe sufficient technology capability to match a knowledge middle’s energy consumption, there’s at present no scalable resolution to intermittency of wind and photo voltaic.
- Solving the know-how, market-structure, and regulatory obstacles to powering knowledge facilities with carbon-free power across the clock is a purpose a few of the world’s largest knowledge middle operators, most notably Google and Microsoft, have got down to hit by 2030.
Hyperscaler Landlord Vantage Makes Zero-Carbon Pledge
Vantage Data Centers has set a purpose to totally get rid of carbon emissions that end result from its operations by 2030. It plans to get there by working with utilities, investing in know-how, and collaborating with its knowledge middle tenants.
The firm acknowledged that it will not be attainable to go absolutely carbon-free inside the timeframe it’s committed to and that it’s going to probably have to make use of carbon offsets to fill the hole.
- As outlined within the story about Dropbox above, powering knowledge facilities with carbon-free power across the clock is a gargantuan problem.
- But Vantage’s enterprise revolves round constructing and leasing knowledge middle house wholesale to the world’s largest tech firms, together with the likes of Google and Microsoft, each of whom have dedicated to get to zero carbon by 2030 as nicely.
- Because hyperscaler platforms lease loads of their capability from the likes of Vantage, their resolution to reaching their carbon objectives will embrace power that powers their knowledge middle landlords’ amenities.
I Squared Capital Agrees to Buy Mexican Operator Kio
I Squared Capital has agreed to accumulate Kio Networks, which it described as the biggest knowledge middle supplier in Mexico.
The sale worth was not disclosed, however Bloomberg reported final yr that Kio, backed by Tresalia Capital, was exploring a possible sale that might fetch as a lot as $1 billion.
Kio is a serious knowledge middle supplier to the Mexican authorities. Its reliance on that relationship as a enterprise was cited as an element working in opposition to Tresalia’s efforts to promote. Moody’s final yr explained its B2 score of Kio’s inventory (a score reserved for dangerous, junk shares) by the supplier’s “weak liquidity and income focus in Mexico, with a very giant publicity to the federal government of Mexico and to some giant contracts.”
I Squared Capital, also referred to as ISQ, is an infrastructure funding supervisor. It has invested in utilities, power, transport, and social infrastructure and says it has made six investments in digital infrastructure that whole $3 billion.
- Kio operates 11 core knowledge middle campuses and 11 edge amenities in Mexico, Central America, and the Caribbean, totaling 20MW of put in capability and “important enlargement potential,” in accordance with the announcement.
- ISQ owns the Hong Kong community and knowledge middle operator HGC, which it acquired in 2017.
- In July, ISQ introduced acquisition of the Houston-area fiber community operator ICTX WaveMedia by way of a newly shaped Ezee Fiber platform for funding in fiber networks in rising and underserved US markets.
- In 2020, ISQ reached an settlement to accumulate the worldwide community operator GTT for $2.15 billion, however the deal seems to have stalled.
Mantra Data Centers Says It Has $1 Billion to Build Data Centers in India
Another new participant is promising to enter the worldwide knowledge middle market. An organization known as Mantra Data Centers introduced plans to take a position $1 billion in knowledge middle building in India, one of many hottest rising cloud and knowledge middle markets.
MDC, which describes itself as an “impartial platform and wholesale colocation supplier,” stated it would begin by constructing 20MW knowledge facilities in Mumbai, Delhi, Chennai, Bangalore, Hyderabad, and Kolkata. The firm stated it has signed MOUs for knowledge middle growth in three of these markets with the respective state governments.
- American and Chinese cloud suppliers are investing in infrastructure to serve India’s large inhabitants. International and Indian knowledge middle suppliers – each established and newly shaped – are racing to reap the benefits of the chance to lease knowledge middle amenities to these cloud platforms and help enterprise necessities.
In its announcement, MDC stated that in addition to India’s rising digitization, knowledge middle demand available in the market might be additional spurred by enactment of the Personal Data Protection Bill that’s been into consideration since 2019. If enacted, the invoice would require all “delicate private knowledge” of Indian residents to be saved in India.
Other Great Reads (and a Podcast) on DCK This Week
Pliops Decides Its SSD Performance Accelerators aren’t Just for Hyperscalers – The startup guarantees large SSD efficiency and effectivity enhancements for enterprise knowledge facilities.
VPS CEO Dean Nelson on Flipping Data Centers’ Wasteful Status Quo – The former infrastructure head at eBay and Uber talks about his first yr on the seller aspect, VPS’s know-how imaginative and prescient, zero carbon, and extra on The Data Center Podcast.
SolarWinds CEO Talks Securing IT in the Wake of Sunburst – Lessons discovered from the pandemic and the aftermath of the Sunburst cyberattack places the IT traits report issued by SolarWinds in a particular context.
Inside the Famed Black Hat NOC – Network operations middle managers Bart Stump and Neil Wyler (aka Grifter) once more head up the present community, however with a brand new hybrid twist.
A Look Into an XR Future With IFTF’s Toshi Anderson Hoo – AR/VR know-how is on its technique to turning into larger than gaming. Get a really feel for what work could also be like a couple of years from now at Data Center World.
Open Compute Project: Redefining Open Source for the Data Center – OCP expanded the which means of “open supply” past software program to deal with the identical issues open supply software program is supposed to deal with.
Digital Realty’s Hybrid Cloud Strategy Rests On Connectivity, Partnerships – The firm’s focus is on making connectivity simpler for patrons, whereas companions allow hybrid structure options.