AboveNet connects London and New York. AboveNet (ABVT) has launched a low latency end-to-end transatlantic connection between financial centers in London and New York. Seeing a demand for low latency transatlantic connectivity, AboveNet says it can now offer latency gurarantees on this premium service as low as sub-1ms round-trip for access to hundreds of buildings in the New York and London metro markets. “Adding the low latency capability between New York and London is a natural extension of our industry-leading Agility Guarantee program,” said AboveNet Chief Technology Officer Rajiv Datta. “In addition, we can now provide high bandwidth connectivity between London and our 16 U.S. markets for a broad range of customer applications.”

Equinix connects Two cities in The Netherlands.  Equinix (EQIX) announced the connection of its International Business Exchange (IBX) data centers, located in Zwolle (ZW1) and Enschede (EN1), to the Amersterdam-based Netherlands Internet Exchange (NL-ix).  “In view of our substantial growth ambitions, the NL-ix connection of the Equinix data center in Amsterdam, set up a year ago, was a very logical step for us. Following our excellent experience of partnering with Equinix, we didn’t have to think twice about connecting its data centers in Zwolle and Enschede to the NL-ix,” said Mar Gauw, NL-ix Commercial Director. ZW1 and EN1 data centers target small to medium size businesses but can also serve as a business continuity / fall-back location for the Equinix AM1 Amsterdam IBX center, which is one of the world’s largest single metro area Internet exchanges.

Telx expands colo with Hypercube. Telx announced that HyperCube, a premier provider of local and national tandem services to the nation’s largest carriers, has established a colocation center within Telx’s Miami, Florida facility. By doing this HyperCube will reduce backhaul network costs and it will allow them to offer their full set of services to the Miami market. Doug Davis, chief technology officer of HyperCube said “after evaluating several colocation providers in Miami, we found it to be the broadest carrier ecosystem in the area, providing us with more connectivity choices via a simple cross-connection.”

Equinix selected by Boston Options Exchange. Equinix announced that the Boston Options Exchange (BOX), an all-electronic equity options market, is moving its operations featuring an ultra-fast matching engine, to the Equinix NY4 data center.  According to BOX Senior Vice President Alan Grigoletto, “Equinix provides a healthy exchange ecosystem – in essence a ‘living reef’ – where all participants can access additional data feeds and other technology vendors via cross-connects, and where market makers, high-frequency traders and order flow providers can co-exist.”  Participants of BOX services can now connect from Equinix hubs in Chicago and New York, or directly from space in the NY4 facility. Adding BOX to the Equinix eXchange Ecosystem opens up opportunities for all community members through Equinix cross connect services.

Nirvanix added as cloud provider by Nasuni. Enterprise cloud storage provider Nirvanix announced that it has been added to the list of cloud storage providers by Nasuni.  Nirvanix will provide Nasuni customers with unlimited cloud capacity, allowing companies to use and pay for only what they need, when they need it. Last month Nasuni unveiled the Nasuni Filer, a gateway to cloud storage, running on VMware as a virtual NAS. “The Nasuni gateway is a technological milestone in the cloud storage industry that enables organizations to easily benefit from Nirvanix’s unique enterprise cloud storage offering,” said Jim Zierick, President and CEO of Nirvanix.

Ixia hosts low-latency measurement summit. Converged IP network test solutions provider Ixia (XXIA) announced the world’s first Low-Latency Measurement summit, which took place Thursday in Santa Clara. The summit was designed to help data center planners and enterprises that require low-latency communications create and deploy next generation converged data centers. “Low-latency devices are critical to the delivery of time-sensitive data flows, as in financial transactions,” said Douglas Gourlay, Vice President of Marketing for Arista Networks. “Low-latency testing, as performed at iSimCity, is crucial for data center equipment and network deployment.” Ixia is a global company, offering test systems to validate the functionality and reliability of complex IP networks, devices and applications. Earlier in the week Ixia and AT&T announced that the Ixia K2 100 Gigabit Ethernet test solution was implemented in AT&T’s testing of a standard-ready, single-flow, 100GE field trial.

“Think what happens when the iPad takes off,” Lillie said. “People are surfing the Internet and streaming video on their mobiles, and it’s just starting. As prices come down for these new devices, the growth of traffic will surpass expectations.”

Lille was the keynote speaker this morning at Data Center World Spring 2010 at the Gaylord Opryland in Nashville, Tenn. He warned the audience of 800 data center professionals that the coming tsunami of mobile traffic will be disruptive to their networks and facilities.

“The mobile Internet will have a profound impact,” said Lillie. “We’re just at the beginning, but we’re not ready. This is the message we’re bringing to the carriers. And they know it.” He said some carriers are preparing to increase their network capacity ten-fold over the next decade.

Lillie said the growth is being driven by the development of mobile apps for the iPhone, Blackberry, Android phones and other mobile devices. As these new apps bring a universe of everyday tasks into the palms of users’ hands, usage is accelerating – along with the data traffic streaming across global networks.

As these apps and devices proliferate, network latency will become an increasingly important challenge for corporate IT departments and data center managers.

“We believe the mobile wave will be bigger than the fixed Internet wave,” Lillie said. “It has the potential to change the way we do business.” An example: Lillie said Equinix is redesigning its systems for mobile access, including customer management portals and capacity planning tools for the iPhone and Blackberry.

A similar transition awaits many of the companies represented at Data Center World, he said. “What are you doing to handle this growth?” Lillie asked. “You have to think about your networks and how they may need to grow. The numbers (for traffic volume) are getting to be extraordinary. Most of it is video, and it’s just starting to kick off.”

One technology likely to see broader adoption as a result of mobile traffic is WAN optimization, which can help companies better manage their existing network infrastructure to (See our WAN Optimization Outlook for an overview of the major players in this niche).

The LEED certification follows an expansion and green retrofit of SV2 that was completed in mid-2009. The retrofit included the installation of air-side economizers, fans incorporating variable frequency drives (VFDs) and LED light fixtures and occupancy sensors. Equinix estimates that the retrofit will save it more than 4 million kWh in energy  annually, and will pay for itself in under four years.

“Earning LEED certification is another example of our commitment to advancing energy efficient data center operations and further demonstrates the efficiency gains that can be achieved through innovative thinking and strategic upgrades to an existing facility,” said Dave Pickut, the CTO of Equinix.

“This commitment carries through to all new Equinix IBX data centers, as well, which are designed in accordance with our best-practice guidelines,” Pickut said. ”We’re very proud of the fact that retrofit projects, such as SV2, and recently designed IBX data centers, such as those in New York and Sydney, have achieved industry-leading efficiency ratings.”

Other examples of Equinix’s energy efficiency initiatives include:

• Offering enterprise customers in Europe the ability to calculate their CO2 footprint and identify projects to offset data center energy consumption through its European Carbon Offset program.
• Receiving certification from Naturemade Star, the Swiss label for green power production and green electricity products, that its four IBX data centers in Switzerland operate using 100% green energy.
• Participating in Singapore’s NEWater program, a joint initiative between Singapore’s Public Utilities Board (PUB) and the Ministry of the Environment and Water Resources (MEWR) aimed at studying the suitability of using reclaimed water as a source of raw water to supplement Singapore’s water supply.
• Achieving energy savings of up to 30 percent at the Equinix SG2 IBX data center located in Singapore through automatic control of high efficiency fans as dictated by standby operation, room cooling load or underfloor static pressure.
• Using air-side economizers to provide free cooling and partial free cooling during the winter months at the Equinix SY2 IBX data center in Sydney, Australia.

Equinix intends to use the money raised from the offering for expansion capital expenditures and repaying debt, including some debt it expects to assume in connection with its deal for colocation rival Switch and Data. Completion of the $689 million acquisition is delayed by pending approvals from federal antitrust regulators, and not likely to close until the second quarter.

Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are acting as joint book-running managers and BofA Merrill Lynch, Barclays Capital Inc., Goldman, Sachs & Co., ING Financial Markets LLC and RBS Securities Inc. are acting as co-managers for the offering.

With the current enthusiasm about cloud computing, some have argued that cloud platforms will replace the data center, or reduce the need for physical infrastructure. Or perhaps that all the world’s applications will run out of just five huge cloud computign facilities.

Here’s the reality: Data center builders are the arms dealers to the cloud. Every cloud computing application will reside in a data center. And the cloud players who can’t afford to build their own massive data centers will lease data center space and services from those who can. As a result, companies that are rarely mentioned in the cloud computing buzz are building a nice, cloudy business.

An example is Equinix( EQIX), the colocation specialist whose facilities are crucial intersections for major networks. Equinix, a company founded way back in the dot-com boom of 1998, reported this week that it has seen a “meaningful increase in demand” from cloud computing providers.

Serving & Connecting Cloud Providers
“We have a tremendous opportunity to connect the world’s clouds through Equinix,” said CEO Steve Smith. “We’re targeting several of these players to deploy their infrastructure with us and then provision the cloud offerings out of our data centers. We’re going to be the on and off ramps to the cloud for a lot of providers.”

Equinix offers colocation space – leased data center space where customers can house their servers and stroage, often in secure cabinets or cages – in 34 data centers. When the company completes its acquisition of rival Switch & Data, it will have a  global footprint of more than 6 million square feet of data center space in  facilities in North America, Europe and Asia-Pacific.

Equinix says it has has more than 120 customers that have deployed infrastructure to support both public and private cloud offerings. Recent wins include Amazon, Citrix Online, IPsoft and Zynga. Salesforce.com runs its entire infrastructure out of Equinix facilities in California, Virginia and Singapore.

Connectivity Central
Equinix data centers are where Internet companies and service providers make the physical connections between their networks, usually through traffic-swapping agreements known as peering. Any interruption in that high-speed bitstream would quickly ripple across the Internet.

That’s why the company’s data centers are supported by the industry’s sturdiest power and cooling infrastructure, with several levels of redundancy built into each system to ensure that power failures won’t knock servers offline. Visitors to Equinix data centers must pass through five layers of biometric security between the street and the servers. (See our video tour offering a look inside an Equinix data center). It’s a level of resiliency and connectivity that’s not easy to duplicate, especially for startups.

Equinix is hardly alone among old-school data center builders who are thriving on cloud-driven business. In 2010 Facebook was a huge customer for data center REITs Digital Realty Trust and DuPont Fabros Technology. Both Twitter/NTT and Facebook boosted growth at Fortune Data Centers.

Earnings beat The Street
Equinix discussed its growing business in cloud computing during its quarterly earnings conference call Wednesday. The company posted fourth quarter revenue of $242.6 million and profits of 45 cents a share; exceeding analysts’ consensus estimates of $238.1 million and 34 cents.

One legacy of the company’s having survived the dot-com bust is its experience managing through an economic downturn. Equinix has continued to invest in growth, expanding in 14 of the 18 markets where it operates.

“As the year unfolded and the demand for our services remained strong, we made an important decision to continue to invest in the core of our business to better position us to capitalize on our longer term opportunity,” said Smith. “As many competitors were constrained in their ability to invest in their growth, we’ve now gained an important competitive advantage.”

Strength in Financials
That includes the financial vertical, where Equinix has seens trong demand in its New Jersey and Chicago data centers from trading firms seeking high-speed access to exchanges.

“In the financial vertical we saw a significant increase in demand for our services with continued growth from our electronic trading communities,” said Smith. “We now have over 430 customers in this vertical with over 80 deployed in multiple regions. We’ve seen accelerating growth in this ecosystem and annual contract value has increased 39% year-over-year. With the ongoing shift to electronic trading of multiple asset classes we believe that we’re in the early stages of growth in this ecosystem.”

Equinix now operates four data centers in Frankfurt, all of which are directly linked by redundant dark fiber, enabling all Frankfurt-based customers to interconnect as if they were in the same physical location.

“Equinix is seeing strong demand for colocation and interconnection services in Frankfurt, with significant growth coming from the city’s financial services industry,” said Eric Schwartz, president of Equinix in Europe. “Equinix’s Frankfurt IBX data centers are already a key destination for financial services firms wishing to improve their trading operations by directly connecting with their trading partners and utilizing low-latency links to other financial markets around the world. The new FR4 center, together with the planned expansion of FR2, will provide the capacity to grow this community even further.”

The phase I opening of the $30 million FR4 center, which is located in the southwestern region of Frankfurt, comprises 1,700 cabinet equivalents and 6,000 gross square meters (65,000 gross square feet) of data center space. The data center is being built out in multiple phases and, when complete, will total 12,000 square meters (130,000 square feet), with capacity for approximately 3,300 cabinet equivalents.

Elsewhere, in the north of the city, the planned $18 million expansion of the FR2 IBX will add 2,500 square meters (27,000 square feet) of data center space, with capacity for approximately 660 cabinets. The FR2 IBX expansion will be completed in phases, between April and September 2010.

Equinix has also opened its new Dusseldorf-2 (DU2) IBX data center, adding 560 cabinets and 2,700 square meters (29,000 square feet) of gross data center space in Dusseldorf. Located southeast of the city, the new center will be tethered to Equinix’s original Dusseldorf IBX data center (DU1) through dark fiber links, enabling existing DU1 customers to seamlessly grow their data center operations.

“Demand for premier data center services continues to outpace supply across all major European metro regions,” said Schwartz. “Equinix is focused on closing this gap between demand and supply and is committed to expanding its capacity, by both building new data centers and systematically upgrading existing ones.”

Switch and Data (SDXC) recently moved to settle three lawsuits related to the sale to Equinix. A memorandum of understanding between Switch and Data and lawyers for plaintiffs would have all claims dismissed with prejudice in return for attorneys fees and costs, estimated at about $900,000.  

“Switch and Data and the other defendants deny all of the allegations in the lawsuits and believe that the existing disclosures regarding the proposed merger are appropriate under the law,” the company said in an SEC filing. “Nevertheless, Switch and Data and the other defendants have agreed to settle the putative class action lawsuits in order to eliminate the risk, burden and expense of further litigation, to fully resolve all claims raised in the lawsuits, to permit the merger to be consummated without the risk of injunctive relief or delay, and to permit Switch and Data’s stockholders to receive the consideration provided for in the merger.”

The biggest deal in the data center industry for 2009 was the news that Equinix (EQIX) would acquire Switch and Data in a $689 million transaction. As the year draws to a close, we’re learning more about the behind-the-scenes maneuvering that led to the deal, in which Switch and Data (SDXC) spent months weighing competing bids from Equinix and an international provider.

The negotiations with the rival suitors, which began in earnest in April and concluded in late September, are detailed in an SEC filing by Equinix. The existence of a rival suitor for Switch and Data was first noted by Paolo Gorgo in an analysis at Seeking Alpha last week.

In January Switch and Data was approached by “a privately-held firm in its industry based outside of the United States” to discuss a possible business combination. This international company proposed a merger of equals with Switch and Data, which emphasized that it was not for sale but began discussions in March.

Equinix contacted Switch and Data in April to express interest, kicking off five months of talks. Equinix dropped out of the talks in mid May, but resumed discussions in early July. On Sept. 26, the Switch and Data board determined that the Equinix bid – which represented a 32 percent premium to its stock price – was the best outcome for its shareholders.

Who was the mystery suitor? Paolo notes that the description fits Interxion, which already had a joint marketing agreement with Switch and Data. At the time, we noted that the partnership “appears to be a competitive response to the growth of Equinix, which acquired IXEurope last fall, providing it with facilities in major Internet markets on both sides of the Atlantic.”

The description could also fit KDDI, the Japanese company that owns colocation and peering providers Telehouse America and Telehouse Europe. KDDI has been actively expanding its Telehouse network in Europe and Asia, but has not announced plans for expansion in the U.S. beyond its three existing facilities.

Averting A Global Competitor
By stepping up to outbid the international firm, Paolo notes that Equinix was able to “avoid the creation of a global competitor in the sector, and stopped a foreign entity from achieving a US listing (without going through an IPO) and a strategic footprint in the most important market for the colocation sector.”

The acquisition was also driven by the economics of data center development, allowing Equinix to enter new geographics and add capacity in key existing markets for less than it would have cost to build new facilities in those locations.

The Equinix-Switch and Data deal combines two of the largest players in the market for colocation and interconnection services, and gives Equinix a presence in 16 new markets across North America, including Atlanta, Denver, Miami, Seattle and Toronto.

Equinix will integrate Switch and Data’s data center business and operations, including the company’s 34 data centers in 22 markets in the U.S. and Canada. The acquisition will add more than 1 million gross square feet of data center capacity, bringing Equinix’s total global footprint to more than 6 million square feet across 79 data centers in 34 markets in North America, Europe and Asia-Pacific.

Vote Set For Jan. 29
The deal is currently undergoing regulatory review, and Switch and Data shareholders are scheduled to vote on the Equinix proposal at a Jan. 29 shareholders meeting.

The deal may have additional ripples as competitors weigh their strategic options going forward. The Sunday Times of London reports that Interxion may be planning an IPO in 2010. The paper says the company has been in discussions with investment banks about a public offering on the NASDAQ market.

It’s important to note that this is not the first time UK media have predicted an Interxion offering. Exactly two years ago the Guardian wrote that Interxion was discussing an IPO with investment banks. Instead, the company remained privately held and raised $190 million to continue its aggressive expansion of its data center network, which now spans 26 facilities in 11 countries.

• Apollo Opens PoP in Equinix London. Transatlantic submarine cable system company Apollo announced Thursday that it has opened a new Point of Presence (PoP) in Equinix’s (EQIX) LD4 London Slough data centre.  This new PoP provides resilient, intercontinental access between the UK and major cities in the USA.  Apollo chose the Equinix LD4 facility to meet increasing customer demand for reliable, linear wavelengths between London and the USA.  “Directly connecting to LD4 will offer our customers diversity from other London networks and meet the growing requirements of our customer base,” said Richard Elliott, managing director of Apollo.  “By investing in this new PoP, we have enhanced our network in a way that cuts latency, increases diversity and ensures optimum resilience.”  Apollo is a UK based company jointly owned by Cable & Wireless and Alcatel-Lucent.
• Telehouse West preview. Key members of the press and analyst groups were given a tour of the Telehouse West facility in London.  In April 2009 Data Center Knowledge reported that the Greater London Authority had approved a plan in which waste heat from the $180 million facility would be used in a district heat network for the local Docklands community. The facility is expected to open in the first quarter of 2010 and the waste heat will keep 1,600 homes nice and warm.  Silicon.com has a few photographs of the facility and construction progress of the 9 story building.
• Infinity wins Datacentre Leaders award. London-based data centre company Infinity received the ‘Future Thinking and Design Concepts’ award at the Datacentre Leaders Award Tuesday.  A sustainable biomass plant at the Infinity ONE facility enables “dark green energy to be generated from bio-matter supplied by a local group of cooperating farms.”  Infinity is committed to reducing both the energy waste and the carbon footprint of the IT sector and has adopted recommendations within the EU Code of Conduct on Data Centre Energy Efficiency.