Expansion plans, mergers, acquisitions, high-tech undersea cable deployments and global partnerships. The second quarter of 2017 is off to a stellar start for the data center sector. Take a look at the top news stories that have piqued our interest:
Apple investing $1bn in Expanding its Nevada Data Center
Now, Apple has announced plans to invest a staggering $1 billion in doubling the size of its Reno Technology Park data center to cope with increasing demand for iCloud storage. The expansion will create 400 new jobs in operations and construction. It’s also been revealed that the company agreed to purchase land in downtown Reno for a $4 million shipping and receiving warehouse which, in turn, will provide considerable tax breaks for the tech giant.
Earlier this month, Apple posted a second quarter revenue result of $52.9 billion which was a significant drop from the first quarter which was $78 billion.
Tesla announced in September last year that it would build a $5 billion gigafactory in an industrial center just outside the center of Reno creating 6,500 jobs by 2020.
Equinix Officially Acquires 29 Data Centers from Verizon in $3.6 Billion Deal
This month, global data center operator Equinix finalized the acquisition of 29 colocation facilities from Verizon for a whopping $3.6 billion. The purchase substantially expands Equinix’s international footprint, delivering access to South America via a new data center in Colombia, as well new facilities in Miami, Texas and Virginia. The Miami location is termination point for fifteen submarine cables systems and over 120 networks, making it the fourth largest exchange in the United States. Equinix now manages 170 global data centers.
Equinix CEO Steve Smith noted that organizations are increasingly hosting their data closer to customers to reduce network delays. These acquisitions will support clients as they transition from a centralized hub to a distributed model. As part of the deal, Equinix also gained 1,000 Verizon customers and 250 Verizon employees.
IBM Launches Four New US Cloud Data Centers
IBM is staking its reputation on cloud services and infrastructure, announcing the opening of four new data centers in the United States. The facilities, in Dallas and Washington DC, bring IBM’s global data center presence to 55 sites, with plans underway to purchase another two centers from Lloyds Bank. By investing heavily in cloud infrastructure, IBM hopes to tap into the growing demand for big data, blockchain, IoT, cognitive and quantum computing resources.
IBM’s earnings from cloud services are up 33% since last quarter, with annual cloud revenue hitting $14.6 billion. IBM is fast becoming a major player in an industry still dominated by Google, Microsoft and Amazon. But it’s a major gamble for the company, with revenue from other business units shrinking. Cloud is one of the few bright spots in IBM’s business model, particularly as the company has seen revenue fall for 20 consecutive quarters.
INDIGO Data Superhighway Targets Exponential Growth of APAC Traffic
A syndicate of APAC telecoms giants has teamed up with Google to deploy a 9,000km undersea cable connecting Australia, Singapore and Indonesia. The consortium, including Telstra, Singtel, Indosat, AARNet and SubPartners, has engaged Alcatel Submarine Networks to build the cable system. The new cable, codenamed INDIGO, will address the exponential growth of Internet traffic around the region. Asian Demand for broadband services grew by 70% in 2016 alone.
The dual-fiber open-cable design uses spectrum-sharing coherent optical technology to deliver massive capacity of at least 32 TB per second – equivalent to simultaneously transmitting over seven million HD movies. Construction is scheduled for completion by mid-2019.
“The construction of INDIGO is timely to meet the rising demand for high-speed broadband between Asia and Australia”, said Ooi Seng Keat, Vice President of Carrier Services at Singtel.
China Telecom, Daily-Tech and Global Switch Announce Data Center Collaboration
Communication behemoth China Telecom Global (CTG) recently revealed a new partnership with data center operators Daily-Tech and Global Switch. Daily-Tech manages Chinese infrastructure, and Global Switch operates a network of facilities across Europe and the Asia Pacific region, with a combined space of over three million square feet.
The group will cooperate on services and marketing, while Daily-Tech and CGT will gain access to Global Switch’s existing ten data centers in London, Sydney, Hong Kong, Singapore, Paris, Frankfurt, Amsterdam and Madrid. The deal is expected to create new opportunities for growth and collaboration among some of the industry’s leading service providers, and fulfills the objectives of China’s Belt and Road Initiative.
Consortium Acquires 365 Data Centers, Appoints Bob DeSantis as CEO
A consortium led by Chirisa Investments has purchased colocation operator 365 Data Centers for an undisclosed figure. The group, which includes Longboat Advisors and Lumerity Capital, appointed Bob DeSantis (co-founder of Xand) as CEO. The acquisition gives the consortium eight facilities – New York, Chicago, Detroit, Philadelphia, Indianapolis, Nashville, Tampa and Buffalo – with total floor space of almost 12,000 square meters.
IBM to Purchase Cloud and Managed Hosting Business from Verizon
The same week Verizon completed its $3.6 billion sale to Equinix, the global telecoms conglomerate also announced its intention to sell its cloud and managed hosting business to IBM. Verizon began withdrawing from the cloud services market in 2016, after closing down its public cloud. The telco has been gradually divesting expensive infrastructure and transitioning to less costly business models such as managed services. In 2015, IBM also took ownership of AT&T’s managed hosting business, and is now the world’s leading private cloud operator, although it still lags well behind Amazon, Google and Microsoft in public cloud.
Cyxtera Technologies Emerges from the Sale of CenturyLink’s Data Center Operations
CenturyLink has sold its colocation and data center business to a consortium comprised of BC Partners, Longview Asset Management and Medina Capital Advisors. The $2.15 billion deal merges CenturyLink with Medina’s data analytics and security businesses – Catbird, Brainspace, Cryptzone and Easy Solutions – to create a new company called Cyxtera Technologies. Cyxtera will operate a total of 57 data centers around the world, and CenturyLink will maintain a 10% stake in Cyxtera.
Crown Castle to Acquire Wilcon in $600 Million Deal
Communications services company Crown Castle has agreed to purchase Los Angeles data center operator Wilcon in a $600 million deal that will see Crown Castle broaden its presence via Wilson’s colocation facilities and dark fiber infrastructure, which includes 3,000 miles of fiber connecting more than 1,000 Internet hubs. Wilcon manages three data centers in LA, with a combined floor space of 23,700 square feet. Crown Castle already manages 40,000 towers and 26,500 miles of fiber.