Microsoft is acquiring GitHub. After reports emerged that the software giant was in talks to acquire GitHub, Microsoft is making it official today. This is Microsoft CEO Satya Nadella’s second big acquisition, following the $26.2 billion acquisition of LinkedIn two years ago. GitHub was last valued at $2 billion back in 2015, and Microsoft is paying $7.5 billion in stock for the company in a deal that should close later this year. (Microsoft acquires GitHub).
CEO Satya Nadella's remarks about the deal suggest Microsoft was motivated not only by product synergies, but also by a desire to more generally become a larger provider of software and services to developers as enterprise software spending keeps rising at a much faster pace than IT spending in general. That could motivate the company, which has a massive domestic cash balance in the wake of tax reform, to ink additional deals to buy platforms that are popular with web and cloud developers. (Why the Microsoft - GitHub deal makes sense).
Edge data center provider EdgeConneX is planning to increase its footprint in at least six locations across North America, adding up to 50MW of total power capacity. This will include expansions in Atlanta, Denver, Miami, Phoenix, Portland and Toronto.
The expansion now announced by EdgeConneX includes the building of second and third data centre facilities in some of the markets which will “evolve these Edge Data Centres into campus-like environments that contain a robust ecosystem of networking, content, cloud and IT service providers interconnecting and growing at the Edge”.
Randy Brouckman, CEO of EdgeConneX, said: “For over five years, we have been building Edge Data Centers for the service provider community, creating a vibrant, localized service delivery enablement platform made up of a diverse customer ecosystem. (EdgeConnex Expansion).
UK’s Department of Business, Energy and Industrial Strategy (BEIS) has said that from October, no new data centers can be added to the Climate Change Agreement (CCA) which grants a reduction in energy-related taxes for data centers, even though the scheme will run till 2023. The techUK body says this will distort the market, giving some players an unfair advantage, while at the same time putting the UK’s data center business at a disadvantage compared with the rest of the world, according to a late April article from Data Center Dynamics (UK Ends Data Center Energy Subsidies).
Detractors complain the move will distort the market by making things cheaper for existing operators, and penalizing new ones; it will put UK businesses at a competitive disadvantage compared to those based outside the UK; it will discourage inward investment at a time when Brexit is already putting off long-term planning; and it “punishes” growth.
IT Departments often demonstrate a maddening trait when selecting data center solutions. They look at cloud, colo, and on-premises data centers as mutually exclusive choices. Going cloud means foregoing colo, and going on-prem means foregoing the rest. But IT workloads aren’t “one size fits all” propositions. According to Rock Crutchley, COO at Iron Mountain, “Legacy or custom-built applications can be critical to business continuity and are often difficult to migrate to the cloud. Furthermore, successfully identifying the workloads you want to migrate to the cloud does not mean they will get there overnight. Cloud migration takes time, planning and preparation.” Enter the hybrid solution.
“Hybrid IT architectures with colo as the foundation increase efficiency, lower costs, and mitigate risks when compared to environments with only in-house data centers,” wrote Crutchley in his recent Voices of the Industry article for Data Center Frontier. (Data Center Frontier). Colocation is the most logical venue for hybrid IT as providers also offer a wide-range of on-demand data center services and ecosystems that include in-market personnel for almost any resource gap.
It is important to choose a partner that can help you and your IT team navigate the choices --- including hybrid choices --- that meet your financial and service level goals.
Well, if the cat wasn’t out of the bag before this, it is now. On February 22, 2018, Bank of America made some startling (if not obvious) statements about digital currencies, including cryptocurrencies, in a filing provided to the SEC.
“Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies,” the bank said in the filing. “The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services,” it said. “Emerging technologies, such as cryptocurrencies, could limit our ability to track the movement of funds. Our ability to comply with these laws is dependent on our ability to improve detection and reporting capabilities and reduce variation in control processes and oversight accountability.”
Cryptocurrency is at an interesting crossroads. On the one hand, crypto has outperformed even the wildest expectations for it as an asset class thus far. However, it will never perform to its full potential until it develops far wider acceptance as a payment method in the larger regulated economy. Instead of viewing cryptocurrency as a threat, larger corporations should be examining how they can be the first to bring this new, volatile asset class “mainstream”.
Rumors are swirling that Equinix will Buy Infomart later this month. In Montreal, eStruxtture is finalizing a deal to take over Kolotek. What does this mean? Well, that M&A activity in 2017 was not a fluke. Expect this trend to continue at least through Q1 and Q2 of 2018.
If you’re in the tech industry, you’ve probably heard the terms “cryptocurrency” (i.e. Bitcoin, Ethereum, Litecoin, Ripple) and “Blockchain” this year. Do those terms sound new and intimidating? A lot of people think so. You can learn about cryptocurrency here: cryptocurrency explained and blockchain explained. The question is, where does it go from here?
In terms of cryptocurrency, Bitcoin will continue to be the dominant digital asset in the market place. It’s meteoric rise to $20,000.00 has tapered a bit, but don’t expect Bitcoin to disappear in 2018. For the tech crowd, it may be Blockchain that has more of a long-term disruptive impact.
Shares of UPS jumped .3 percent on news that the company had launched an initiative to adopt Blockchain technology to manage its trillion dollar shipping business’ logistics system. UPS to transition to Blockchain. Salesforce’s Chief Digital Analyst and HuffPost contributor Vala Afshar believes “Blockchain will disrupt every industry. HuffPost article.
It’s too early to tell if Afshar is clairvoyant, crazy, or somewhere in between. But with the hype and buzz surrounding this nascent technological phenomenon, expect to hear more about it in 2018.
2017 was an exciting, busy year in the data center industry. “Edge” infrastructure is turning heads, new technologies like Blockchain are emerging, and hyper scale leases continue to fuel explosive cloud growth. But all those things pale in comparison to the effect Mergers and Acquisitions had on the data center landscape in 2017.
Digital Realty & DuPont Fabros had the largest merger deal, valued at $7.6 billion early this year. They were followed by Equinix & Verizon’s deal ($3.6 billion), Cyxtera & CenturyLink ($2.3 billion), and Peak 10 & ViaWest’s deal ($1.7 billion). You can see a more comprehensive list of deals courtesy of JLL here: JLL. Iron Mountain and IO ($1.3 billion) capped the year with a last second deal to end 2017.
Expect M&A velocity to continue in 2018, though perhaps with less of a market cap impact than M&A from 2017. Consolidation will continue to dominate headlines next year.