Digital Realty has quickly become one of the preeminent names in the data centre and colocation space. With over 210 data centres across five continents and present in 13 countries around the world, the company is heading for a period of steady growth and expansion.
Speaking to Corey Dyer (pictured), executive vice president of global sales and marketing at Digital Realty, he talks us through some of the biggest trends in the space and how the company fits within the space.
One such trend is software-defined networking (SDN), which is quickly becoming a much-demanded feature in the management and provisioning of services. According to Dyer, it is a means for added flexibility and accessibility.
“I think SDN has been a wonderful way for customers to have that flexibility about how about they go about accessing each other, accessing networks and accessing public clouds. It’s been great for us because it’s given us more options to services and support our customers.”
For the last few years, Digital Realty has been hard at work cultivating a number of strategic partnerships with companies that support its wider growth plans. Back in 2016, the company partnered with cloud connectivity enabler Megaport to launch an interconnection platform to facilitate direct, private and secure connections to multiple cloud service providers. The following year Digital Realty acquired a small stake in Megaport for a reported $8 million.
Dyer says that the decision to work so closely with Megaport is due to its ability to provide access to multiple cloud ecosystems.
“The key driver is that it’s really enabled us to help customers get to multiple clouds, multiple different networks and ecosystems. It’s been a huge boost for us and our business,” he explains.
“One of the big trends I see at the moment is multi-cloud and hybrid cloud architecture, so Megaport’s partnership with us has enabled us to have those conversations and offer those solutions for our customers.”
Most recently, Digital Realty achieved the AWS Direct Connect Service Delivery Designation. The new accreditation means that the company has authorisation to provide new AWS Direct Connect Hosted Connections of more than 500Mbps.
The new offering comes as a real value add in Dyer’s view, expanding the already vast set of connectivity options it already has.
“We gain a huge advantage if we have more direct connects, more on-ramps for all of these cloud providers, and more of them colocated in our facilities,” says Dyer. “It gives greater flexibility for our compute cycles; and it gives our customers a lot more options around security, speed and performance. We’re one of the few to offer this AWS solution.”
One the company’s biggest acquisitions to date has been the $1.89 billion acquisition of Telx back in 2015. The deal nearly doubled the size of Digital Realty’s retail colocation and interconnection services business.
Talking to Dyer about the acquisition and how it has shaped the business, he says that it has turned the company into a full service provider and expanded its suite of offerings.
“It really helped us build-out our global platform and help provide us with a full product offering - everything from a single rack to a multi megawatt hyperscale,” he says. “It has also enabled us to have a lot more interconnection and directly connect with our customers across the board. Year-on-year our colocation and interconnection business continues to grow.”
In keeping with the company’s active involvement in the M&A space, at the start of the year, Digital Realty completed a $1.8 billion acquisition of Ascenty, the leading data centre provider in Brazil, through its Brazilian subsidiary, Stellar Participações. Less than four months on and the company sold a 49% stake in Ascenty to Brookfield Infrastructure that committed to fund half of the equity investment.
While questioning him on the deal and how it plays into the company’s plans for the region, Dyer explains that the decision supports the expansion of its global platform. “So we’re really working building out the platform,” he says. “A large portion of our customers - the ones that benefit the most - take advantage of our global footprint.
“Given that Brazil is growing the way that it is and the way Latin America is, I think being there at the forefront, giving them a global platform so they can take advantage of it, which is really exciting for us,” he adds. “We will continue to sell add-on services and add-on locations for our clients.”
However, he hastens to add that this may not exclusively happen with Brookfield Infrastructure, explaining: “we will continue to figure out the best way to make use of funds and our investment in the most efficient way possible.”
Turning to the market as a whole, interconnection at scale is a growing trend that colocation providers need to be aware of. Providing campus-based colocation and interconnection offerings adjacent to global cloud providers’ massive storage and compute engines, is something that Dyer says is already in motion. Earlier this year the company acquired a 13-acre property from Airbus Americas for a record price of $2.14 million per acre with this purpose in mind.
“If you think about the land that we brought in Ashburn, that’s a great example of where we are going to create a connected Metro,” Dyer says. “We are going to have multiple ecosystems, multiple cloud providers, all connected right there, locally on the same campus.”
The plan, he says, is to give customers really easy and differentiated access, where they can go directly to any of the cloud providers on the same campus, delivering much lower latency, higher performance and more secure connectivity options.
“I think it will start enabling different applications to be used in different ways as well as how customers take advantage of those applications,” he adds.
With 95% of data centre traffic predicted to be cloud-centric by 2021, according to Cisco’s Global Cloud Index from 2016 to 2021, Dyer says that Digital Realty is preparing for the data onslaught and building for future hyperscale requirements by simply doing what it has always done.
“We’re continuing to do what we’ve been doing,” he says. “We are one of the major partners that the cloud providers work with as they continue to build out their infrastructure. Its partners like us that continue to keep them nimble and agile, they also trust us because we are best at building, designing and operating data centres for them and with them.”
It is also the company’s work with the likes of Ascenty which helps to ensure that they are a good partner for the cloud providers.
In keeping with the theme of data onslaught, the explosion of IP traffic has created the need for highly scalable, reliable and cost-efficient internet exchange solutions. To support this Digital Realty is expanding its IX platform to more facilities. At the start of the year, the company expanded its internet exchange platform to new data centre facilities located in Ashburn, Virginia, and Chicago, Illinois, adding to its many exisiting locations.
“We will continue to do that where it makes sense and to give our customers alternatives to drive IP traffic, right across the board,” explains Dyer.
Ever the optimist, Dyer sees no challenges for the company only opportunities that need to be optimised and maximised.
“I feel like there is just a huge opportunity,” he adds. “We’re focused on making sure that we take advantage of the growth explosion that’s out there in the cloud.”
Other key areas of development are the move to hybrid cloud and multi cloud environments, albeit according to Dyer, in the early stages of development.
“It’s all about meeting the needs of the customer and growing and supporting them as much as we can,” continues Dyer. “So when they come in and are a part of our ecosystem or part of our platform - they continue to look to us as a trusted and valued partner of theirs.”
Therefore, the biggest concern from Dyer is: “How do we do everything we can to capture that driving demand as quickly as we possibly can”.
Looking ahead, Dyer predicts that in the next 3-4 years the data centre market will continue to grow at the rate it is now, with hybrid and multi cloud playing a big part of that growth.
“I think it is going to continue to grow and accelerate at the pace is it currently moving at,” Dyer says. “We’re going to see more and more use of hybrid and multi cloud, and that continue to expand.”
As for the roadmap for the rest of the year, heading into 2020 from Dyer’s standpoint will be a mix of organic growth and development of its offerings.
“I think you are going to see a mix of organic growth from us,” he says. “We will continue to partner with our customers to drive demand, find out where that demand is, what markets they want us to be in and what solutions they would like to see from us as well as the partnerships we need to make in order to see that happen.”
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