Graphiant Network Edge, Cogent Buys Sprint, and More

Last updated on by Christian Koch

Hey Friends,

Welcome to another Weekly Briefing.  

Last week was big for connectivity with the launch of Graphiant and Cogent acquiring the legacy Sprint network for $1, or in other words, Sprint is paying Cogent to take the assets while committing to pay it for a product it won’t use. More on that deal and what it means below.

Goldman Sachs Communacopia and Piper Sandlers Growth Frontiers are this week.

Your Weekly Briefing

Cloud Infrastructure

Who powers Cloudflare R2? I was convinced Cloudflare was using its own infrastructure for its recently launched object storage product (R2) but some industry experts had a different opinion. I’ve been investigating this for the last few weeks and have come to find out that Cloudflare’s Sub-Processors page may provide some hints as to who’s really behind R2. I’ve reached out for Cloudflare’s PR team for comment but haven’t received a response. Cloudflare already has a relationship w/ Oracle for reducing data transfer costs, and Seagate operates its own object storage platform, Lyve Cloud. For now, we’ll have to keep digging to figure out why Oracle and Seagate are listed as sub-processors, along with Google and Microsoft, but these may be the signs that indicate Cloudflare is not serving customers from its own storage infrastructure.

News

  • DigitalOcean released Uptime, a new product that will measure website uptime and latency. Link
  • Microsoft announced the Microsoft eCDN (Enterprise Content Delivery Network), a result of the Peer5 acquisition and aimed at helping Microsoft Teams customers stream video within their organizations. Link
  • Vultr is carving up the NVIDIA A40 and offering fractional GPU virtual machines. Link

Connectivity

Graphiant Launches to Help Enterprises Solve for The Rise of Unpredictable Topologies

Press | Network Field Day Videos

Graphiant was founded by former Viptela Founder and CTO, Khalid Raza, who serves as the company’s Chief Executive, along with several other key leaders from Viptela including Ali Shaikh, Matthew Krieg, and others.. The company raised $33.5M in funding back in 2020 from Sequoia Capital, Two Bear Capital & Atlantic Bridge, who were also previous investors in Viptela.

Graphiant’s flagship product, Graphiant Network Edge sets out to finish the job SD-WAN started, providing predictable connectivity across the Enterprise Network Edge and Cloud. Graphiant has reimagined the network fabric with a stateless core to deliver MPLS-level guarantees, leveraging metadata-based routing, providing a highly differentiated solution that is simply not solved with automation.

Primary use cases include connecting Network Edge’s, which can be Data Centers, Branches, Colocation or other Remote Site, Multi-Cloud Connectivity, and Private Business-to-Business connectivity. Graphiant’s network fabric spans popular multi-tenant data centers including Equinix and CoreSite while last-mile connectivity is transported over the internet.

While it’s early, I believe Graphiant has an incredible opportunity to offer the enterprise a modern solution to scale, manage, and control the growing complexities that have been invading the Enterprise WAN for quite some time. For Network-as-a-Service providers like Megaport, PacketFabric (including the coming Unitas Global merger), Graphiant, who says automation is simply not enough to solve the problems in today’s networks may be a competitor they are not ready for.

READ ON THE WEB


Cogent Buys Legacy Sprint Network for $1

Press | Transaction Investor Deck | T-Mobile 8K
Cogent  At BoFA Media, Communications And Entertainment Conf.

Cogent is buying the legacy Sprint network from T-Mobile for $1, or said differently, T-Mobile is paying Cogent to take these assets and do something with them that they don’t want to do.

Key Highlights

  • Cogent will pay $1, assume no debt, and issue no equity.
  • T-Mobile commits to $700M in payments to Cogent for IP Transit over 54 months which Cogent will provision but T-Mobile has said it will likely not use.
  • Cogent enters two new markets and will begin to sell 1) Wavelengths in North America ($2B market, growing at a 7% CAGR according to Cogent estimates and is currently dominated by Lumen and Zayo) and 2) National/Regional Dark Fiber in the US.
  • Cogent gets international operating licenses in India and Malaysia.
  • Cogent gets ~47 owned data centers w/ 400K SQFT of colocation space.
  • Assets will allow Cogent to transition out of its original Williams deal with Lumen, which was how the Cogent network in North America was built—on a single pair of fiber covering 13K miles, structured as a 20-year IRU with two 5-year extensions at no-cost other than O&M, which is $15M/year.
  • Transaction closing is anticipated to occur in 9-15 months based on customary regulatory approvals.

Revenue from the Sprint Network was $560M in revenue in 2021, with $110M from undesirable products such as SIP Termination, Wholesale Voice Minutes, and Managed Security Services which will be discontinued by T-Mobile immediately.

CONTINUE READING

News

  • Ziply Fiber raised $450M in fresh capital to support its ongoing network expansion in the Pacific northwest. Link
  • Lightpath announced it will expand its network with the addition of ~70+ route miles of fiber across several markets in Connecticut (US). Link
  • Converge ICT, a Philippine network infrastructure provider is reportedly considering selling a minority stake in its business. Link
  • Comcast announces major expansion plans including the transition to a virtualized cloud-based architecture to prepare for DOCSIS 4.0 and the availability of symmetrical multi-gig speeds across the US starting in 2023. Link
  • Irix (FKA PP Telecommunication) has announced the Batam-Sarawak Internet Cable System (BaSICS) submarine cable system, connecting Malaysia and Indonesia. Link

Data Centers

The data center landscape has been in the midst of a transformation for a while now, but in my opinion, it  is becoming more prominent than ever. If you pay attention to the quantity and content of recent press and news lately, you’ll notice that more often than not data center operators can no longer afford to fund their own development and more frequently are taking in silent  money from real estate and private equity investors who don’t want to miss an opportunity but don’t have much value to add other than greenbacks. This doesn’t apply to all capital flowing into the sector and on the other side are sophisticated investors such as Stonepeak, DigitalBridge, and IPI, as well as traditional private equity such as KKR, Blackstone, and Macquarie who can all offer more than just capital.

Something else to keep an eye on is the potential increase in lower valued mixed-use retail platforms like Flexential leveraging third-party developers to expand, possibly because the capital requirements are beyond what they’re either willing to spend or able to raise.

I’m not an expert on data center business models or development costs, but maybe Jim Chanos isn’t so crazy after all.

News

  • STACK Infrastructure announced it will partner with real-estate asset manager ESR to develop a 48 MW data center in Seoul, its 5th market in APAC, estimated to be completed by Q4 2024. Link
  • GDS Data Centers is reportedly exploring a secondary listing in Singapore. Link
  • Xcel Energy signed an option to sell ~350 acres of its property in Becker, MN, which is ~80km north of Minneapolis, to a company that plans to invest up to $1B to develop a data center. Xcel confirmed this is separate from the 2019 announced Google project which has been delayed. Media recently reported that CloudHQ was planning a $1B investment to develop a data center campus south of Minneapolis in Chaska. CloudHQ is known to support  only a handful of customers so it shouldn’t be hard to figure out what’s going on here.
  • Philippine law firm Quisumbing Torres published a guide to developing and operating data centers in the Philippines from a legal perspective. Link
  • Synergy Research says there are now ~800 hyperscale data centers in the world with the US accounting for 53% and over 1/3 in Northern Virginia. Link

Interconnection is critical for the success of the cloud ecosystem

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.

Visit Nokia Today

Further Reading

Amazon Web Services | History and Strategy | Deep Podcast Case Studies

Netflix Hunts for Cost Cuts, From Cloud Computing to Corporate Swag - WSJ

Viewing the world as a computer: Global capacity management - Meta

Network Entitlement: A contract-based network sharing solution - Meta

Starlink has won the race for LEO broadband – what now? - TMF Associates

I ran the worlds largest DDoS-for-Hire empire and CloudFlare helped

The 2022 National Internet Segment Reliability Research - Qrator Blog

Apple’s China ICloud Data Center Operator Warns of ‘Dire’ Covid Lockdown - Bloomberg

South Africa Fixed Broadband Speeds Up as Fiber Takes Off | Ookla®

Sizing the satellite connectivity opportunity for smartphones | Opensignal

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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