Cloudflare Skates on Thin Ice, NextDC Earnings, and More

Last updated on by Christian Koch

Hey Friends,

Welcome to another Weekly Briefing.

It’s time to introduce this month’s sponsor. Welcome back, Nokia, a brand who shouldn’t need much of an introduction, but just in case you need a refresher, Nokia makes networking/communications equipment and software for a variety of network types including IP, optical, data center, and mobile, plus plenty more. Be sure to check out this article produced by NOKIA about automating network fabric’s at scale. Thank you Nokia, for sponsoring Foundations for the month of September.

This coming week has conferences from Citi, Bank of America, Evercore, and Goldman Sachs.

Let's get into this week's update.

Your Weekly Briefing

Cloud Infrastructure

Equinix announced that Orange will leverage Equinix Metal as it works towards building out it global telco cloud to more than 100 locations. Orange plans to deploy its Telco Cloud architecture on Equinix Metal in Amsterdam, Madrid and Seattle by the end of the year which will allow the provider to deliver virtualized network functions including SD-WAN, 5G Roaming, and more. Equinix continues to secure customer deployments, proving its platform is where the so-called "edge" is going to materialize for the foreseeable future. Link

VMware explore was last week, and while I’m not going to dig into the announcements, I will leave you with a few links to explore them on your own.

Cloudflare has been under fire in recent weeks for providing services to a website that has been a source of targeted harassment and hate towards the transgender community and specific individuals. Protests and Anti-Cloudflare campaigns have been ongoing for weeks to try and get Cloudflare to take action, but the company was silent until last week when it indirectly published a response in the form of a blog post about its abuse policies. Meanwhile, Protocol published several articles, followed by mainstream media about the situation. On Saturday, Cloudflare took action and blocked the website after what appears to have been a dangerous escalation of the situation.

News

  • AWS officially opened their UAE (me-central-1) region, its second cloud region in the Middle East after opening Bahrain (me-south-1) in 2019. Link
  • Airtel will use Qwilt’s content delivery platform to power the new Airtel Cloud Edge CDN. The platform will initially be deployed in 15 sites across India with plans to expand to 40 across the country to service Airtel’s 400M subs, while becoming the largest service provider to use Qwilt. Link
  • Microsoft Azure is expanding support for VMware, increasing availability in more regions and adding more new features. Link

Connectivity

In the US, FCC Auction 108 for 2.5 Ghz spectrum concluded with T-Mobile spending more than $300M for something like 92% of available MHz-POPs. I believe this wraps up the 5G auctions in the United States, so it’s go time for the carriers.

Supply Chain Woes: Ciena reported earnings for 3QFY22, highlighting a growing backlog of $4.4B. Supply chain constraints impacted revenue by ~$60M, and were primarily from decommits of low value ICs from a small number of suppliers that have historically been reliable.

Worth a listen: Craig Moffett on Grant’s Current Yield podcast

News

  • GiGstreem, a small ISP serving several pockets of communities across~12 states acquired Boston ISP, NetBlazr, adding 3,500 subs to its customer base. Link
  • Lumen launched the ability for customers to purchase, provision, and manage SASE solutions directly from its digital marketplace portal. Link
  • Comment Networks developed a dashboard for exploring the FCC’s Affordable Connectivity Program in detail. Link

NextDC reported FY22 revenue of AUD$291M, up 18% y/y with underlying EBITDA of AUD$169, up 26% y/y, while interconnection accounted for ~8% of recurring revenue. The company added 1,895 interconnections over the fiscal year, an increase of 13% contributing to a total of 16,613 interconnections from a total of 1,613 customers. On the call management said it expects to provide an update in FY23 on international expansion plans, highlighting Southeast Asia as region of interest, while also noting the Global Switch portfolio as interesting but potentially out of reach based on asking price/valuation.

San Francisco Data Center Capacity: DCD is reporting the data center at 400 Paul Avenue in San Francisco—previously announced as a partnership between the CIM Group and 1547 Critical Systems Realty in 2017—is currently on the market with JLL and Colliers searching for a tenant. The facility is ~250K SQFT and permitted for 24 MW of capacity. There is no mention of 1547 on any of the collateral, indicating the company may no longer be involved. This development raises several questions, What happened with the partnership? Was this a spec build, or was there an anchor tenant that backed out? In 2017, when the news hit the wire, DCK wrote that "While Raymond is optimistic that there is enough demand to lease the future data center at attractive rates, Jabez Tan, research director at Structure Research, said there does not appear to be pent-up demand in the city, due primarily to cost and availability of cheaper options elsewhere on the West Coast.", which jives with my understanding of current market dynamics as well.

News

  • The FT has a follow-up on the Jim Chanos story which includes additional insights from a few analysts and industry executives. Link
  • DigitalBridge and Equinix have reportedly made the short list to acquire Time's DC business (Aims Data Centre) in Malaysia according to Bloomberg. Link
  • Under the Lens: India’s Data Centers Explosion (PDF) Link
  • AdaniConnex Head of Data Center Business, Sanjay Bhutani said the EdgeConnex/Adani JV will develop seven data centers with 450MW of capacity across Mumbai, Chennai, Hyderabad, Delhi, Bengaluru, and Pune, and additionally develop another 550MW in Tier 2 and Tier 3 markets across India. Link
  • Ireland fears pressure is mounting on energy supply and want’s large users like data centers to use emergency generators. Link

If you’re interested in learning more about hyperscale data centers and more specifically, the data center industry and digital infrastructure, you should check out the infra/STRUCTURE conference next month hosted by friends of Foundations, Structure Research, in Toronto.


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This Capacity special report highlights how the cloud ecosystem requires a highly interconnected and automated data center infrastructure, with networks that connect and interconnect data centers in a scalable, secure, and reliable way. In the report, Nokia experts and customers discuss the key technologies for successful data center interconnection in the cloud era.

Register for our webinar, to hear Nokia and its customers discuss the role of data center interconnection in the cloud ecosystem, with a spotlight on the critical role that automation plays in enabling customers’ digital transformation journeys and boosting service providers’ operations agility and efficiency.

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Further Reading

The New Cloud War with Martin Casado - Last Week in AWS Podcast

U.S. Restricts Sales of Sophisticated Chips to China and Russia - The New York Times

GPU Engines Are So Strategic China Will Have To Use Its Own

Rakuten founder embroiled in scandal as investors pile on pressure - FT

Koyeb - Heroku’s free tier legacy: The shoulders we stand on 15 years later

The Silver Lining Of Internet Regulation: A Regulatory Impact Assessment | Techdirt

Northstar CEO charged with securities fraud, after Amazon data center kickback scandal - DCD

T-Mobile + SpaceX Direct Satellite-to-Handset Service: Lots of Hype and Little Reality - Frank Rayal

Data Centers Are Unpopular. All the Better for Their Stocks. - WSJ

Website energy consumption via browser profiling

Latest Research Notes

Is MVE the Answer? - A Closer Look at Megaport's FY22 Results

Cloudflare, Fastly 2Q22 Highlights

Equinix 2Q22 Product & Interconnection Highlights

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