Switch Datacenter Group today announced the transfer of its AMS1 data center and operations to Equinix, Inc. – in an all-cash transaction for €30 million ($34 million).
Switch Datacenter Group sees it as a logical next step on its path to strengthening their focus on the colocation wholesale market and customer-specific site development for enterprises and hyperscale customers.
Over the last couple of years, Switch Datacenter Group has evolved from a high-end classical retail colocation provider into a professional designer, developer and operator of high-end (wholesale) data centers. Switch Datacenters has made significant investments in R&D and the development of state-of-the-art data center infrastructure technologies including patented indirect adiabatic cooling technology and OCP-ready (Open Compute Project) data center infrastructures.
‘’As the Amsterdam data center market is booming and many new companies are entering the local playing field, we see there is a strong need for a flexible, experienced data center development & operations company in this Amsterdam market to assist customers in finding the right location, assuring connectivity and power, while also offering a full data center services portfolio around a proven concept of long term SLA based DCaaS sites,” said Gregor Snip, CEO and founder of Switch Datacenter Group.
“Over the years, Switch has created the right skillset and references in this market. At first as a hosting company and later on as a renowned retail colocation provider, while we are now for years already highly experienced in building, designing and improving data center sites. Now it is the right time to bring this unique knowledge forward and focus even more on becoming a data center technology development leader.”
Other Wholesale Data Centers
“The transfer of the AMS1 data center to Equinix shows that Switch is respected and trusted by leading global players,” said Edgar van Essen, Managing Director of the Switch Datacenter Group.
‘’This message is in line with the trust received from many other market leading names in the industry who trust us their ICT infrastructures and business. It is also another proof that the world starts to know Switch as a highly capable, innovative, state of the art data center development company.”
Switch Datacenter Group runs two more high-end data centers in the Amsterdam metropolitan region and is actively involved in the planning of more wholesale data centers to come.
The transaction was guided and completed by AC Niellsen Data Centers, represented by Frank de Fremery, as exclusive broker for the project on behalf of the shareholders Plain Vanilla Investments (represented by Coen Binnerts) and SDC Holding (represented by Gregor Snip).
Huawei Technologies is adopting the Open Rack initiative in its new public cloud datacenters around the world. The company aims to optimize the environmental sustainability of its datacenter racks.
Proposed by Open Compute Project (OCP), the Open Rack is an initiative designed to redefine the datacenter rack. It integrates the rack into the datacenter infrastructure and handles the interdependency of all the things in a datacenter, including power grids and gates in the chips on each motherboard.
Adoption of Open Rack will help Huawei to optimize the energy used by servers, drive operational efficiency, and reduce the time required to install and maintain racks.
“Huawei’s strategic investment and commitment to OCP is a win-win,” said Mr. Kenneth Zhang, General Manager of FusionServer, Huawei Intelligent Computing Business Department.
“Combining Huawei’s extensive experience in Telco and Cloud deployments together with the knowledge of the vast OCP community will help Huawei to provide cutting edge, flexible and open solutions to its global customers. In turn, Huawei can leverage its market leadership and global datacenter infrastructure to help introduce OCP to new geographies and new market segments worldwide.”
Huawei is already a Platinum member of OCP. The company is investing and showing its commitment to OCP and the open source community with the new move.
Additionally, Huawei Technologies has also announcedthat it will expand its work with the OCP Community. The company will put its efforts on extending the design of Open Rack standard and further enhance time-to-market and reduce TCO.
“Huawei’s engineering and business leaders recognized the efficiency and flexibility that Open Rack offers, and the support that is available from a global supplier base. Providing cloud services to a global customer base creates certain challenges. The flexibility of the Open Rack specification and the ability to adapt for liquid cooling allows Huawei to service new geographies. Huawei’s decision to choose Open Rack is a great endorsement!” stated Bill Carter, Chief Technology Officer for the Open Compute Project Foundation.
In the third quarter this year, the capital expenditure (capex) of hyperscale data center operators touched $26 billion. It’s the second time in 2018 that capex reached this level, according to the new data by Synergy Research.
The capex of hyperscale for the first three quarters in 2018 is up 53% as compared to the same period in 2017.
Hyperscale operators are the big companies which have a distributed infrastructure that can be scaled up to meet the increased demand for additional physical space, electrical power, cooling etc.
Top 5 hyperscale spenders
The research finds that Google, Microsoft, Facebook, Apple and Amazon are the top five companies to have spent the most on hyperscale infrastructure in Q3 2018.
These companies have been in the list of top five spenders for last ten quarters, accounting for 70% of hyperscale capex. The capex of Microsoft reached a record level in the third quarter, while the capex of other four leaders slightly decreased compared to the growth witnessed in last quarter.
Synergy mentionedthat capex in third quarter would have been the highest ever, had it not been for Google’s purchase of Manhattan’s Chelsea Market building in March. This purchase had boosted the Q1 numbers by $2.4 billion.
Apart from these five, capex of Alibaba jumped up in Q3, putting the company way ahead of other hyperscale operators.
Following Alibaba, the other top hyperscale operators with highest capex included Baidu, IBM, JD.com, NTT, and Tencent.
“Business at the hyperscale operators is booming. Over the last four quarters their year-on-year revenue growth has averaged 24% and they are investing an ever-growing percentage of their revenues in capex,” said John Dinsdale, a Chief Analyst at Synergy Research Group.
“That is a real boon for data center technology vendors and for colocation/wholesale data center operators, but it has created a huge barrier for companies wishing to meaningfully compete with those hyperscale firms. This is a game of massive scale and only a few can play that game.”
The rapid adoption of public cloud and the onset of new technologies like the internet of things, neural networks, artificial intelligence, machine learning and mega-scale online retailing are reshaping the data center industry, driving demand for data center capacity and cloud connectivity.
QTS is the leading data center provider that serves current and future needs of both hyperscale and hybrid colocation customers via software-defined data center experience. We recently interviewed Chris Ortbals – Executive Vice President, Products & Marketing, QTS, to know about his take on the changing data center requirements and QTS strategy of redefining the data center.
1. Please share an overview of QTS’ journey from inception till date with DHN readers. How has it transformed from being a single data center to becoming one of the leading national data center providers?
QTS is the creation of Chad Williams, a business and real-estate entrepreneur who had a strong vision of what a data center can and should be. Williams foresaw increasing IT complexity and demand for capacity and recognized the opportunity for large, highly secure, multi-tenant data centers, with ample space, power and connectivity.
In 2005, QTS was formally established with the purchase of a 370,000 square foot Atlanta-Suwanee mega data center. Williams focused on building an integrated data center platform delivering a broad range of IT infrastructure services ranging from wholesale to colocation, to hybrid and multi-cloud, to hyperscale solutions, and backed by an unwavering commitment to customer support.
Since then, we have grown both organically and through acquisition into one of the world’s leading data center and IT infrastructure services providers, and in 2013 we began trading on the New York Stock Exchange under symbol (NYSE: QTS).
Today, QTS offers a focused portfolio of hybrid colocation, cloud, and hyperscale data center solutions built on the industry’s first software-defined data center and service delivery platform and is a trusted partner to 1,200 customers, including 5 of the worlds’ largest cloud providers. We own, operate or manage more than six million square feet of data center space encompassing 26 data centers, 600+ megawatts of critical power, and access to 500+ networks including connectivity on-ramps to the world’s largest hyperscale companies and cloud providers.
More recently, we have been accelerating momentum as a hyperscale data center provider able to meet unique requirements for scale and speed-to-market delivered at the right economics being sought by the biggest Internet-based businesses.
2. Throw some light on the recent QTS strategy of redefining the data center. What’s the Software-Defined Data Center approach, how do you plan to execute it and how will it help hyperscale and hybrid colocation customers?
We believe that QTS’ Service Delivery Platform (SDP) enables QTS as one of the first true Software Defined Data Centers (SDDC) with 100% completeness of vision. It is an architectural approach that facilitates service delivery across QTS’ entire hybrid colocation and hyperscale solutions portfolio.
Through policy-based automation of the data and facilities infrastructure, QTS customers benefit from the ability to adapt to changes in real-time, to increase utilization, performance, security and quality of services. QTS’ SDP approach involves the digitization, aggregation and analysis of more than 4 billion data points per day across all of QTS’ customer environments.
For hybrid colocation and hyperscale customers, it allows them to integrate data within their own applications and gain deeper insight into the use of their QTS services within their IT environments. It is a highly-automated, cloud-based approach that increases visibility and facilitates operational improvements by enabling customers to access and interact with information related to their data center deployments in a way that is simple, seamless and available on-demand.
3. How do you differentiate yourself from your competition?
QTS software-defined service delivery is redefining the data center to enable new levels of automation and innovation that significantly improves our customers’ overall experience. This is backed by a hi-touch, enterprise customer support organization that is focused on serving as a trusted and valued partner.
4. How does it feel to receive the industry leading net promoter score for the third consecutive year?
We were extremely proud to announce that in 2017 we achieved our all-time high NPS score of 72 and the third consecutive year that we have led the industry in customer satisfaction for our data centers across the U.S.
Our customers rated us highly in a range of service areas, including customer service, physical facilities, processes, responsiveness service of onsite staff and our 24-hour Operations Service Center.
As our industry-leading NPS results demonstrate, our customers continue to view QTS as a trusted partner. We are also starting to see the benefits of our service delivery platform that is delivering new levels of innovation in how customers interact with QTS and their infrastructure, contributing to even higher levels of customer satisfaction.
5. QTS last year entered into a strategic alliance with AWS. Can you elaborate what is CloudRamp and how will it simplify cloud migration?
AWS came to us last year telling us that a growing number of their customers were requiring colocation as part of their hybrid IT solution. They viewed QTS as a customer-centric colocation provider with the added advantage of our Service Delivery Platform that allowed us to seamlessly integrate colocation with AWS as a turnkey service available on- demand.
We entered a strategic collaboration with AWS to develop and deliver QTS CloudRampTM – direct connected colocation for AWS customers made available for purchase online via the AWS Marketplace.
By aligning with AWS, we were able to offer an innovative approach to colocation, bridging the gap between traditional solutions and the cloud. The solution is also groundbreaking in that it marked the first time AWS had offered colocation to its customers and signaled the growing demand for hybrid IT solutions. At the same time, it significantly accelerated time-to-value for what previously had been a much slower purchasing and deployment process.
For enterprises with requirements extending beyond CloudRamp, QTS and AWS provide tailored, hybrid IT solutions built upon QTS’ highly secure and reliable colocation infrastructure optimized for AWS.
6. Tell us something about Sacramento-IX. How will the newly deployed Primary Internet Exchange Hub in QTS Sacramento Data Center facilitate interconnection and connectivity solutions?
QTS is strongly committed to building an unrestricted Internet ecosystem and we are focused on expanding carrier neutral connectivity options for customers in all of our data centers.
Interconnection has evolved from a community driven effort in the 90’s to a restrictive, commercial industry dominated by a few large companies. Today there is a movement to get back to the community driven, high integrity ecosystem, and QTS is aligning our Internet exchange strategy as part of this community.
A great example is how the Sacramento Internet Exchange (Sacramento-IX) has deployed its primary Internet Exchange hub within QTS’ Sacramento data center. It is the first internet exchange in Sacramento and is being driven by increased traffic network performance demands in the region. It expands QTS’ Internet ecosystem and simplifies our customers network strategies by providing diverse connectivity options allowing them to manage network traffic in a more cost-effective way.
Once considered the backup and recovery outpost for the Bay area, Sacramento has quickly become a highly interconnected and a geostrategic network hub for northern California. It also solidifies our Sacramento data center as one of the most interconnected data centers in the region and as the primary west coast connectivity gateway for key fiber routes to Denver, Salt Lake City and points east.
7. Hyperscale data centers are growing at an accelerated pace and are expected to soon replace the traditional data centers. Can you tell us some factors/reasons that aid the rise of hyperscale data centers?
The rapid adoption of public cloud, the Internet of things, artificial intelligence, neural networks, machine learning, and mega-scale online retailing are driving unprecedented increases in demand for data center capacity and cloud connectivity.
Hyperscale refers to the rapid deployment of this capacity required for new mega-scale Internet business models. These Hyperscale companies require a data center growth strategy that combines speed, scalability and economics in order to drive down cost of compute and free up the capital needed to feed the needs of their core businesses. Think Google, Uber, Facebook, Amazon, Apple, Microsoft and many more needing huge capacity in a quick timeframe. They are looking for mega-scale computing capacity inside hyperscale data centers that can deliver economies of scale not matched by conventional enterprise data center architectures.
This demand for scale and speed delivered at the right economics is opening the door for a new breed of Hyperscale Service Provider being sought by the biggest Internet-based businesses. These are data centers whose ability to deliver immense capacity must be matched by an ability to provide core requirements for speed, quality, operator excellence, visibility and economics, that leaves out a majority of conventional hosting and service providers who are not interested in or capable of meeting them.
And while the organization may have need for very large geostrategic 20, 40, 60 megawatt deployments, typically they want a provider that can deliver it incrementally to reduce risk and increase agility.
8. Throw some light on your current datacenters and future expansion plans.
Chad Williams’ had the vision for identifying large, undervalued – but infrastructure-rich – buildings (at low cost basis) that could be rapidly transformed into state of the art “mega” data center facilities to serve growing enterprise demand for outsourced IT infrastructure services.
In Chicago, the former Chicago Sun Times printing plant was transformed into a 467,000 square foot mega data center. In Dallas and Richmond, former semi-conductor plants are now state of the art mega data centers encompassing more than 2 million square feet. And in Atlanta, the former Sears distribution center was converted into a 967,000 square foot mega data center that is now home to some of the world’s largest cloud and social media platforms.
However, in some cases, a greenfield approach is the more viable option. In Ashburn Va. the Internet capital of the world, we are building a new 427,000 square foot facility from the ground up that is expected to open later this summer. Expansion plans also call for new data center builds in Phoenix and Hillsboro, Oregon.
9. What is your datacenter sustainability and efficiency strategy?
At QTS, we understand that being a good environmental steward takes much more than just a simple initiative. That’s why we have focused our efforts on developing a company-wide approach – one that utilizes reused and recycled materials, maximizes water conservation and improves energy savings.
Central to this is our commitment to minimizing the data center carbon footprint and utilizing as much renewable fuel as possible by implementing a 3-pronged sustainability approach featuring solutions in containment and power usage effectiveness (PUE) metric products.
1. Develop and Recycle Buildings
Part of our data center sustainability strategy is reusing brownfield properties and transforming them into state-of-the-art data centers.
2. Water Conservation
With a large data center comes a big roof that is capable of harvesting rainwater. We collect millions of gallons of water using a harvesting system on a portion of the roof.
3. Energy Efficiency
As a data center provider, cooling is a critical part of our job and is approximately 30% of the electricity load at the data center.
QTS is one of the first data center companies to invest in renewable energy specifically for its hybrid colocation and hyperscale customers.
A recent example is a multi-year agreement with Citi to provide 100% renewable power for our 700,00 sq. ft. mega data center in Irving, Texas. The power and renewable energy credits will come from the Flat Top Wind Project, a 200 megawatt utility-scale wind energy facility in central Texas. QTS will purchase 15 MW of 100% renewable power for its Irving data center, with plans for a similar agreement in its Fort Worth data center later this year.
The investment supports QTS’ commitment to lead the industry in providing clean, renewable energy alternatives for QTS hybrid colocation and hyperscale customers that include five of five largest cloud providers and several global social media platforms.
In addition to the new wind power initiative in Texas, QTS’ New Jersey data center features a 14 MW solar farm to offset emissions associated with power consumption at that facility. QTS plans to expand renewable power initiatives in existing and new data centers including those being planned for Phoenix and Hillsboro, OR.
10. What’s in the roadmap for the year 2018?
QTS is now executing on our 2018 strategic growth plan that involves continued innovation with the Service Delivery Platform. It enables a software-deﬁned data center experience for hyperscale and hybrid colocation customers. QTS’ SDP represents a big data approach enabling customers to access and interact with information related to their specific IT environment by aggregating metrics and data from multiple sources into a single operational view.
More importantly, it provides customers the ability to remotely view, manage and optimize resources in real time in a cloud-like experience, which is what customers increasing expect from their service providers. In addition, through a variety of software-defined networking platforms, enterprises can now get direct connectivity to the world’s largest cloud providers with real-time visibility and control over their network infrastructure using QTS’ SDP application interface.
According to a new analysis by Gartner, public cloud services market is projected to grow from $153.5 billion in 2017 to $186.4 billion in 2018, which is a rise of 21.4 percent.
Amongst the cloud segments, IaaS (Infrastructure-as-a-service) was identified as the fastest growing segment, predicted to grow 35.9 percent in 2018, reaching $40.8 billion, led by leading IaaS providers like Amazon Web Services (AWS) and Microsoft Azure.
SaaS (Software-as-a-service) was again identified as one of the largest segments of the cloud market with a revenue growth expected of 22.2 percent, to hit $73.6 billion in 2018. Gartner also predicted that by 2021, SaaS will reach 45 percent of the total application software spending.
SaaS based application models are becoming a preferred choice for most of the enterprises. Sid Nag, who is a research director at Gartner, thinks that the SaaS demands are changing with users seeking more purpose-built solutions that can meet their specific business outcomes.
Under PaaS (Platform-as-a-Service) segment, dbPaaS (database platform as a service) is seeing the highest demand, expected to hit $10 billion by the year 2021. As a result, the hyperscale cloud providers are expanding their range of services to include dbPaaS.
Talking about the high demand of dbPaaS, Mr. Nag said that the customers should explore other dbPaaS service offers apart from the one offered by the large service providers, to avoid any lock-in.
Despite the high forecast rates, Gartner expects the growth rate to stabilize from 2018 onwards, due to the maturity that cloud services might gain within the IT segment.
One of the primary challenges here is to avoid vendor lock-in. With most of the big cloud providers like AWS, Microsoft etc. offering major cloud services, companies that once use any vendor’s cloud platform can find it very expensive and complicated to move away again.
Gartner said that this scenario might give rise to new demands by customers who want easy migration of their apps and data, without any penalties.
QTS Realty Trust, a leading datacenter solutions provider, recently announced its plan to redefine the organization by creating digital communities that can enable enterprises to directly interact with cloud, digital media and e-commerce companies.
The digital communities of QTS leverage an SDDC (software-defined data center) experience, which helps customers to interact and control their hybrid IT environment physically and virtually in real time. SDDC is a datacenter service where all the infrastructure is virtualized and delivered as a service.
QTS provides a Service Delivery Platform, an automated and cloud-based approach, which allows enterprises to gain in-depth insight into QTS solutions within the IT environment.
As a part of the redefining initiative, QTS will stop selling some of non-core products from its C3 custom products portfolio. The C3 portfolio, which currently consists over 100 products, will be reduce to only 15. The non-core products include dedicated cloud, specific managed services, etc. The elimination of products will help QTS to reduce the complexity within the business.
The non-core customer contracts will be transitioned to a strategic partner for customer support.
The company said that Hyperscale and Hybrid Colocation drove the maximum organizational growth. QTS will refocus its organization and salesforce on these key drivers to speed up momentum and growth.
“Today we are launching a restructuring plan to position QTS for accelerated future growth by re-focusing our organization around the two primary drivers of demand in our business, Hyperscale and Hybrid Colocation,” said Chad Williams, Chairman and CEO – QTS. “In addition, by simplifying our business and cost structure we anticipate achieving a meaningful increase in our profitability and long-term value for shareholders.”
QTS’s current COO of Sales and Marketing (Dan Bennewitz) will retire this year, and a new Chief Revenue Officer will lead both Hybrid Colocation Sales and Marketing. The current EVP of Sales (Tag Greason) will continue to lead Hyperscale sales team. The former C1-Wholesale sales team will now focus on top 30 Hyperscale accounts. It will accelerate the momentum in Hyperscale vertical, the company said.
David Robey, leader of QTS property development, sales and engineering, will now assume the role of COO as well. Whereas, Jon Greaves, CTO at QTS, will additionally lead Hybrid Colocation business as well.
“Our restructuring plan allows QTS to re-focus 100% of our resources on the two strongest growth drivers in our business and accelerate value creation for shareholders. In addition, this realignment creates an opportunity for several of our leaders to step into more substantial roles and help lead QTS into our next phase of growth supported by Hyperscale and Hybrid Colocation,” concluded Williams.