Earnings, Amazon, Terremark, executive movement
It was a very busy week, with a number of changes in executive circles and more telco spinout activity. Earnings season is now in full swing and we start to dig into the results.
A number or providers reported and we got to take a closer look at the results coming from AWS. Amazon’s results pointed to continued growth deceleration – a pattern that has been in motion for over a year now. The growth trajectory remains healthy, but signs are that the market does appear to be getting tighter. We also took a closer look at Equinix and Digital Realty’s results. Rackspace no longer reports, given its new privately held status, but shared some data points about its growth trajectory.
The bulk of the sector’s activity this past week revolved around telcos continuing to shift away from infrastructure services. Verizon and Equinix officially completed their transaction and CenturyLink completed the sale of its data centre portfolio to new market entrant Cyxtera. Also this past week, Verizon made another divestiture as it confirmed sale of its hosting and cloud business to IBM. The Verizon and CenturyLink transactions were two of the bigger telco spinouts to take place and there could be more on the horizon. Canada’s Shaw, which only three years ago acquired ViaWest, is reported to be considering spinning out its data centre and hosting assets as well.
It was somewhat fitting that the Cyxtera unveiling and Verizon selling its hosting and cloud assets happened in the same week. A bit part of the hosting and cloud piece at Verizon was brought in through the 2011 acquisition of Terremark. Cyxtera is now headed by several former Terremark executives and they now own a data centre portfolio that contains several assets formerly belonging to Savvis that it competed heavily against in previous years.
Elsewhere in executive circles, Taylor Rhodes of Rackspace confirmed he would be stepping down and a search for a new CEO has begun with Rackspace president Jeff Cotten stepping in for now. Meanwhile, TierPoint added a new chief revenue officer, formerly of Telx/Digital Realty, and Google brought in some former Heroku executives to bolster its cloud team.
There was other strategic activity on the SMB side of the market. Down under, Melbourne IT acquired an online marketing shop to widen its scope of services and Oakley Capital, a long time investor in the space, purchased control panel vendor Plesk from Parallels Group.
or