Earnings, hyperscale cloud, pandemic impact, M&A, edge
Earnings season is in full swing and the results coming out continue to provide insights into how the pandemic environment is impacting the infrastructure services sector.
Overall, the hyperscale cloud sector has proven resilient in the pandemic environment but the downturn in the economy is having a meaningful impact on growth rates. In the past week, we took a closer look at Google’s results, and like Microsoft, the recent quarter saw a significant drop in the growth trajectory of cloud infrastructure.
Industries that have suffered heavily from the pandemic environment figured prominently in the slowing of cloud and is also factor when projecting the trajectory of data centre operators that serve these hyperscale clouds. By extension, public cloud brings a certain level of vertical exposure to wholesale data centre providers and this is important context to keep in mind.
Despite the headwinds and the uncertainty in the current environment, operators continue to push throw and show continued growth. In the past week, we take a look at the results of Equinix and Digital Realty and they have largely not skipped a beat.
There was more activity on the M&A side of things. There were two deals of note in the SMB sector as Endurance International and TWS in The Netherlands closed deals tthat demonstrated the increasisng technology orientation with SMB deals. Equipping service providers with technology that can be translated into sellable products and services is a key for vendors like Acronis and they too, closed a deal to augment the technology in its security portfolio.
Meanwhile, there was another transaction in the emerging edge sector. SBA and American Tower have charted somewhat similar courses in their edge strategies and both have used M&A. SBA closed a second data centre infrastructure deal in the past week with the purchase of JaxNAP.
Finally, there continues to be activity in APAC. Keppel entered China with a new build in Huizhou, Aussie operator DCI added to its management team, while managed cloud provider Cloud4C also brought on a new senior executive.
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