Cloud, edge, decentralization, egress fees, hyperscale, AI, dedicated builds, M&A, APAC
The sector had another busy week, with product and service developments in cloud, AI builds, data centre acquisitions and more from earnings season.
The cloud sector continues to evolve and competition is tightening. There has been momentum towards eliminating, or at least reducing, egress fees and AWS was the latest to do that. Regulatory restrictions are pushing this, but providers like Cloudflare and Google Cloud are putting on the pressure. Decentralization is another trend that is reshaping the sector and Akamai is taking its push to the edge to the next level. Gecko is the name of its internal initiative to get edge compute increments in literally dozens of edge locations on a global basis and this is well underway in early 2024.
AI is clearly driving demand for capacity across the ecosystem and we continue to see builds evolve as AI requirements bring new variables to the table. Digital Realty recently did a dedicated build for CoreWeave and colocation remains a sensible option for this emerging class of GPU-oriented cloud providers. Given the demand profile, the colocation sector is seeing more new entrants, driven by the demand coming from AI workloads, and they are coming increasingly from the cryptocurrency space. Core Scientific is one of them and they also confirmed a colocation deal for CoreWeave’s GPU cloud. Meanwhile, Edged Energy is another new entrant targeting AI and hyperscale.
There was some data centre M&A in APAC as BDx acquired the existing freehold for its data centre in Singapore, while GreenSquareDC acquired a former IBM data centre campus in Sydney, Australia.
Finally, we have a bit more from earnings season. American Tower disclosed its data centre results, driven primarily by the CoreSite business it acquired back in 2021.
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