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Strong Euro Demand Drives IXEurope Deal

Posted by Rich Miller on June 28, 2007

Demand for premium colocation space in leading European markets outpaces supply by a 6-to-1 ratio, executives of Equinix said today in a conference call with analysts to discuss the company's $482 million acquisition of IXEurope. "We've seen increasing demand from our U.S. customers for Equinix data center operations in Europe," said Equinix CEO Steve Smith, who said about a third of existing Equinix customers have expressed interest in European colo.

IXEurope has 280,000 square feet of data center space in 14 data centers, which are about 77 percent full, according to CEO Guy Willner. Most importantly, the company has new next-generation data centers under construction in London and Paris, providing short-term growth opportunities in the major European business centers.

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June 28, 2007

Equinix Buys IXEurope for $482M

Equinix, Inc. (EQIX) will buy European colocation specialist IXEurope Plc (IXE) for $482 million, the two companies said this morning. Equinix had been discussed as a potential acquirer since IXEurope announced last month that it had received buyout offers. The deal provides Equinix with a European presence to go with its network of facilities in the U.S. and Asia.

IXEurope’s business includes 14 data centers with 380,000 square feet of space throughout Europe, including centers in London, Zurich, Frankfurt, Munich, Paris, Dusseldorf and Geneva. The company’s 450 enterprise and Internet customers include Merrill Lynch, Avis Europe, Deutsche Boerse, Citigroup, Rackspace and SurfControl. The deal gives Equinix a total footprint of more than three million square feet of data center space.

"The strategic acquisition of IXEurope by Equinix will solidify Equinix’s position as the world’s market leading colocation provider with high-quality data centers across the United States, Asia-Pacific and Europe," said Steve Smith, CEO of Equinix. "Customers are increasingly demanding global solutions as the colocation industry continues to grow at double digit rates, and IXEurope has become one of the top providers of colocation services in Europe, operating high-quality data centers in key markets."

The acquisition will be financed out of Equinix corporate cash reserves and unsecured debt financing under existing debt facilities from Citigroup.

Posted by Rich Miller June 28, 2007 | Permalink | Newsletter

June 27, 2007

Mellon Expands Year-Old Data Center

Mellon Financial Corp. plans to invest $70 million to expand and upgrade a Pittsburgh-area data center that is less than a year old, the company said today. The move is driven by Mellon's pending merger with the Bank of New York, and is expected to create more than 200 new jobs in Armstrong County. But the expansion will also feature "a number of utility improvements related to power delivery, distribution and climate control." The face that the center was built in early 2006 and is already getting infrastructure upgrades demonstrates how quickly data center power and cooling requirements have escalated.

The project will more than double the amount of data center space at the site, which currently stands at 120,000 square feet. Mellon says the expansion will take about 36 months, with work starting early in 2008.

"Our decision to expand this new facility makes great business sense, given its excellent performance since startup, the expandability of its design and the high level of technology skills and experience supporting global operations available here in the Pittsburgh area," said Mellon Chief Executive Robert Kelly. "Mellon's information technology group has done a great job with startup, and this major expansion will continue and strengthen the momentum of our data center development project."

Posted by Rich Miller June 27, 2007 | Permalink | Newsletter

Citigroup Hiring for $450M Austin Project

Citigroup Inc. has begun advertising for IT staff for its $450 million data center project in Georgetown, Texas, a suburb of Austin. The financial services expects to hire 50 people at an average annual salary of about $70,000 for the facility, which is being built on a 55-acre site on the SE Inner Loop. Citigroup began searching locations in the Austin area last fall, and purchased the Georgetown site in January after considerign several other Austin-area locations. Bourn Partners LLC is the project developer.

Citigroup is advertising for an operations and facility manager and a delivery team manager for the Georgetown site. The company has posted the jobs at Diversity Inc. and LatPro, a job board for Hispanic and bilingual professionals, as well as the Citigroup web site.

Posted by Rich Miller June 27, 2007 | Permalink | Newsletter

Data Domain Shares Jump After IPO

Shares of data backup provider Data Domain (DDUP) shot up more than 55 percent in their first day or trading after the company's successful IPO. The company priced its offering at $15, and at mid-afternoon shares were trading at $23.28 per share. Data Domain is among the leading providers of data deduplication to eliminate redundant file backups, a technology which is lightly adopted at present but poised for significant growth.

The strong showing follows a similar first-day pop for content delivery network (CDN) provider Limelight Networks (LLNW), which shot up to $22 in the early hours after going public at $15. Shares of Limelight are currently trading at $17, off their first-day highs but still above the IPO price.

Posted by Rich Miller June 27, 2007 | Permalink | Newsletter

The 'New and Improved' Terremark

It's been a busy year for Miami Internet infrastructure specialist Terremark Worldwide (TMRK), which has launched an expansion in Virginia, switched stock exchanges, bought managed hosting provider Data Return and arranged $250 million in financing for its expansion. The result, according to CEO Manuel Medina, is a "new and improved Terremark."

"We have evolved into a very unique player in the IT solution provider space," Medina told analysts in the company's June 14 earnings call. "We are a carrier-neutral operator of world-class data centers that at the same time provides customers with a full suite of managed services. We have built a company unlike any other. We now have the team, the services, the technology infrastructure and the financing in place to implement our strategy."

One interesting note: Terremark said it is maintaining current price levels for colocation services. With demand running strong and supply tight in key markets, many major colocation and managed service providers have raised colo prices, with existing customers having their contracts repriced upon renewal. Terremark says it is keeping prices level to maintain low customer churn, and is instead focusing on selling managed services to its colocation customers. A factor in that decision may be Terremark's space utilization rate, which currently stands at 61.1 percent of its technical space and just 18.6 percent of its overall data center square footage. Those percentages are influenced by the large amount of available space at the company's 750,000 square foot Technology Center of the Americas in Miami.

Posted by Rich Miller June 27, 2007 | Permalink | Newsletter

June 26, 2007

Software: Google's Secret Sauce?

Google held a Conference on Scalability in its Seattle office last Saturday, which featured a look at the back-end operations of Google and YouTube, along with presentations by executives from VeriSign, Symantec and Amazon.com. Rackspace CTO John Engates summarized the discussion on the managed hosting company's Racklabs blog. An excerpt:

Essentially the Google model is to deploy an extremely large amount of commodity (cheap) hardware and storage. The magic is in the software that Google runs on top of this hardware. ... What this tells me is that you need to spend your money on developers instead of hardware. It also means your developers need to understand the infrastructure underneath their software. They shouldn’t be allowed to develop their software with the expectation that they can always get a bigger server. My advice…give your developers a hardware budget that consists of as many low end servers as they need. No more than 4 cores in a server, no SAN storage, no RAID, and only one power supply. Then let them get creative.

John briefly reviews the hardware and software architecture used by Google, which may be of interest if you haven't previously dug into the public discussions of the company's technology.

Posted by Rich Miller June 26, 2007 | Permalink | Newsletter

Flywheels Gain as Alternative to Batteries

With the growing emphasis on environmentally-friendly data centers, flywheels are gaining attention as an alternative to using batteries in a data center UPS (uninterruptible power supply) system.

A flywheel is a spinning cylinder which generates power from kinetic energy, and continues to spin when grid power is interrupted. In most data centers, the UPS system draws power from a bank of large batteries to provide "ride-through" electricity to keep servers online until the diesel generator can start up and begin powering the facility.

Advocates of flywheel technology say they are preferable to batteries, and can address most data center power interruption scenarios. "I don't care much for batteries," said John Sears, the marketing manager for Hitec Power. "I favor flywheels for a number of reasons. The products are mature, they've been on the market for a while, and can handle load for enough time to start the generator." Sears also likes the smaller footprint of flywheel-based UPS systems, which take up considerably less space than battery banks.

Flywheels represent about 6 percent of the three-phase UPS market, according to analysts at Frost & Sullivan, which tracks the UPS market. Many data center managers have reservations about flywheels in a scenario where the generator doesn't start immediately. But Frost notes that "flywheel UPS, with its longer life cycle and lower cost of maintenance, is likely to witness increased demand in the future." Adoption of flywheels appears to be on the rise in Europe, where two large data center projects announced this spring that they would rely on flywheel UPS systems.

Posted by Rich Miller June 26, 2007 | Permalink | Newsletter

Green Marketing and Green Hype

In recent months we've seen a wave of corporate announcements about green data center technology and environmentally-friendly IT. Some are genuinely substantive and progressive, and others less so. Chuck Hollis, the VP of technology alliances at EMC, is concerned that it's becoming harder to tell the difference:

I'm watching with mixed emotions as more and more vendors start to describe their products as addressing challenges associated with reducing power and cooling in the data center. On one hand, clearly it's a monumental challenge -- and opportunity. On the other hand, I'm starting to see vendors with thinner and thinner claims start to add this message to their marketing drumbeat. That's not a good thing.

Hollis reviews some of EMC's efforts, and discusses those of some other major players, noting that there are differing opinions on the best way to solve these problems. He also calls on vendors to offer substantive ways for customers to evaluate environmental marketing claims, arguing that the issue is "too important to be messing around." An excerpt:

It seems to me that there's a lot of opportunistic positioning going on. Global warming is a serious issue. Running out of energy in data centers is a serious issue. The people who are concerned about these issues aren't fooling around. And neither should be vendors. If you've got a compelling story to tell, and the tools and methodologies to back it up, the more than merrier. No one vendor is going to have a lock on solving this problem. But if you're just looking for another way to spin your latest feature, let's do everyone a favor and show a bit of restraint.

Posted by Rich Miller June 26, 2007 | Permalink | Newsletter

June 25, 2007

HP Blows A Data Center To Bits

How far will data center vendors go to demonstrate the disaster-proof nature of their products? Pretty far, it seems. First we had Sun Microsystems putting a Blackbox on a shake table to simulate a major earthquake. HP has turned the publicity stunt volume up to 11, and has actually blown up an entire data center (link via ComputerWorld) to demonstrate the fail-over capabilities of its technology.

At a high-tech ballistics center managed by National Technical Systems in Camden, Arkansas, HP simulated a gas leak using real explosives that resulted in a very real explosion and datacenter destruction. What was blown up? Products from the entire spectrum of HP products, including HP servers, HP StorageWorks products, HP Software and HP Procurve networking products running in five operating environments—HP-UX, HP OpenVMS, HP NonStop, Red Hat Enterprise Linux and Microsoft Windows Server 2003.

Words can't compete with explosions, so go have a look and then come back. :)

Posted by Rich Miller June 25, 2007 | Permalink | Newsletter

DataPoint Expands Baltimore Data Center

DataPoint, Inc., a Baltimore-based managed service provider, will expand its Tide Point, Md. data center facility by 2,000 square feet to give it a total footprint of 13,000 square feet of rack space. The infrastructure improvements will begin immediately, and are expected to be completed by mid-September at a total cost of more than $1 million. Datapoint said the facility is nearing capacity after the addition of more than 150 new customers over the past year, giving it a total of 2,000 business customers in the Baltimore area.

Carter Smith, General Manager at DataPoint, says plans for a second expansion are already in the works. "Now we’re seeing new customers come from as far away as Washington D.C., California, New York, Massachusetts and Europe," he said. DataPoint has epxnaded through several M&A deals, including its December 2006 acquisition of Velocity Server, followed by its January 2007 acquisition of CharmNet. DataPoint is part of Landmark Communications and its wholly owned subsidiary, Continental Broadband.

Posted by Rich Miller June 25, 2007 | Permalink | Newsletter

Strong Euro Demand Drives IXEurope Deal

June 28, 2007

Equinix Buys IXEurope for $482M

June 27, 2007

Mellon Expands Year-Old Data Center

Citigroup Hiring for $450M Austin Project

Data Domain Shares Jump After IPO

The 'New and Improved' Terremark

June 26, 2007

Software: Google's Secret Sauce?

Flywheels Gain as Alternative to Batteries

Green Marketing and Green Hype

June 25, 2007

HP Blows A Data Center To Bits

DataPoint Expands Baltimore Data Center

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