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RagingWire Bets on Cloud, Big Data with New Focus on Wholesale

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Much of the future IT infrastructure will be split between massive wholesale data centers and public cloud services, a big part of the latter sitting in those wholesale data centers. Doug Adams, who was recently appointed as president of data center service provider RagingWire (he was previously a senior VP at the company), believes there will be little room for anything between those two models, things like hosting or managed services.

There will be pure cloud on one side and pure wholesale data centers on the other. Managed services, he says, is not a winning model. This is why RagingWire, majority-owned by the Japanese telecommunications giant NTT Communications, is betting on wholesale data center services, its new strategic focus.

The data center services industry is starting to mature and commoditize, and in a mature and commoditized market, pricing is king, Adams explains. The most effective way to slash prices is to reduce cost by building at massive scale, which is why RagingWire builds massive data center campuses.

Read more: RagingWire Takes its Massive-Scale, Luxury-Amenities Data Center Model to Texas

Role in NTT’s Global Data Center Expansion

NTT has big global data center services ambitions, and RagingWire plays a key role in achieving its parent company’s goals, charged with expanding NTT’s presence in North America, the world’s biggest data center services market. NTT’s other acquisitions – Gyron and e-shelter in Europe andNetMagic in India – are tasked with doing the same in their respective markets.

The Japanese giant plans to spend up to $3 billion on data center expansion between now and 2020, and more than half of that will be spent on US data centers, Adams says.

NTT’s goal is to have substantial data center capacity in top 15 cities that together represent 75 percent of the global data center colocation market, he says. Today, the company is only covering nine.

RagingWire’s immediate expansion plans are to establish data centers in New York, Silicon Valley, Chicago, and one other West Coast market, which will end up being Los Angles, Phoenix, or eastern Washington. e-shelter will build in Paris and Amsterdam in the near future, Adams says.

Cloud, Big Data, IoT Driving Wholesale Demand

Cloud services, Big Data, and Internet of Things applications are exploding, and companies behind them are gobbling up data center space.

Microsoft alone leased nearly 30MW of wholesale data center capacity across three locations last year, according to a report by the commercial real estate firm North American Data Centers. Oracle signed two wholesale leases in North America last year, about 5MW each. Apple signed two 6MW leases, and Amazon signed a 2MW lease in Canada and a 130,000-square-foot one in Silicon Valley, although it’s unclear what the power capacity of the latter was, the firm said.

Read more: Who Leased the Most Data Center Space in 2015?

Companies that don’t provide cloud infrastructure but offer have other widely used internet services – the likes of Uber, eBay, Apple, or Twitter – in addition to supporting their end-user web or mobile applications use massive amounts of data center capacity for their Big Data analytics engines.

Uber, for example, signed at least three wholesale data center leases last year, totaling 14MW, according to North American Data Centers. eBay is preparing for another big data center capacity expansion with Switch in Reno, Nevada.

Car makers and consumer electronics companies, who are investing a lot of money into IoT applications, are also taking down wholesale data center space in big chunks to aggregate and process device data, Adams says. “I can’t tell you how many huge databases we have sitting in our data centers now,” he says.

Competition for these companies’ business among data center providers is tough, and cost decides a lot. “We’re a commoditizing and maturing market, and pricing becomes very important.”

RagingWire, of course, is not alone in going after the opportunity to provide data center space to cloud providers and other major Big Data and internet-driven businesses, and there are as many approaches to pursuing it as there are data center providers. DuPont Fabros Technology also recently re-focused on pure-play wholesale, while Digital Realty Trust has a hybrid strategy, combining wholesale with retail colo and interconnection, saying big customers find being able to connect to the rich ecosystem of players in retail colo attractive.

Those are just a couple of examples. There are also companies like Equinix, CoreSite, Vantage, Infomart, and Server Farm Realty, among others, all pursuing the big opportunity to house infrastructure for the cloud’s biggest brands.

Original article appeared here: RagingWire Bets on Cloud, Big Data with New Focus on Wholesale


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