M&A, divestitures, edge, wholesale data centre, earnings
The past week saw a number of developments that reflect the continued maturation and consolidation of the sector, along with some movement from areas that are going to be at the centre of what is next.
The telco sector started the divestment wave of infrastructure hosting assets, but other entities are doing the same. This past week, IT outsourcer Wipro sold its infrastructure hosting services operation to Chicago-based Ensono. On the SMB side of things, there has been an ongoing consolidation wave. In the US, at least when it comes to SMB shared hosting, that has mostly come to an end. But in other markets around the world, fragmentation is still commonplace. We are seeing how a market like Australia is going through a rapid consolidation wave and it looks like The Netherlands might be the next market. There has not been a vehicle for doing this up until now, but Netherlands-based private equity firm Strikwerda has closed a number of transactions as it looks to put in motion a SMB roll-up play.
In terms of what is coming next, two areas stand out: managed third party cloud and edge infrastructure. On the managed third party cloud side, this past week saw Faction raise a Series B round to push its growth ambitions. Meanwhile, on the edge side, the idea of micro data centres in edge locations and infrastructure processing data and running applications in close proximity to cell towers, is taking shape. This past week Vapor IO partnered up with Packet and EdgeMicro is working on its technology. This segment is moving quickly from concept to market reality.
Wholesale colocation continues to see activity. AirTrunk in Australia signed a deal with a local IT services firm, while Zenium acquired land to build more capacity in Frankfurt. The push to low-cost energy and cold climates is ongoing as Advania in Iceland shared some data points on its momentum and expansions plans. Amazon, of course, continues to build, and it is pushing forward in Dublin, Ireland. This is another case of a hyperscale platform building rather than directly leasing from a colocation provider.
We continue to move through earnings season. This past week, we took a look at two SMB firms from the public and private sides: Wix and Hostpoint.
Finally, VMware has been busy of late as it continues to invest in its VMware Cloud on AWS platform. The service is being pushed by providers like Faction and is extending its footprint to more locations on the AWS cloud, while partners like CoreSite are helping extend private connections to it.
or