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What’s driving the colocation feeding frenzy? • The Register

Analysis Colocation facilities aren’t just a place to drop a couple of servers anymore. Many are quickly becoming full-fledged infrastructure-as-a-service providers as they embrace new consumption-based models and place a stronger emphasis on networking and edge connectivity.

But supporting the growing menagerie of value-added services takes a substantial footprint and an even larger customer base, a dynamic that’s driven a wave of consolidation throughout the industry, analysts from Forrester Research and Gartner told The Register.

“You can only provide those value-added services if you’re big enough,” Forrester research director Glenn O’Donnell said.

The past few months have seen this trend play out en masse, with the latest being private equity firm DigitalBridge Investment Management’s take over of datacenter provider Switch Inc in a deal valued at $11 billion.

Switch operates datacenters specializing in high-performance infrastructure. The company completed its fifth Prime datacenter campus in Texas last year, but this is only the latest colo acquisition in recent memory.

“There have been a pile of smaller colocation providers that have been coming together, either being acquired by the big boys, or they’ve been merging,” O’Donnell said.

There’s been a flurry of colocation mergers and acquisitions over the past few months. Here’s just a sampling: NorthC acquired Netrics, LightEdge bought NFinit, EdgeConnex made off with GTN, Unitas Global snapped up INAP, VPLS nabbed a Carrier-1 datacenter in Texas, and Digital 9 absorbed Finnish colo Ficolo and Volta’s London datacenters.

It’s the cloud! Except, it’s also not

So what’s driving this ramp in M&A activity? You might think it’s the cloud, and while there’s certainly some truth to that, O’Donnell says it’s not the full story.

“I always like to remind people that just because cloud is so big and growing does not mean the datacenter is dead,” he said, adding that to some extent cloud has actually driven people to colos more than it has hurt them.

“I won’t give cloud all of the credit, but cloud certainly proved that this is a viable way of doing things,” O’Donnell added.

What the cloud has managed to do is force colocation providers to innovate around new consumption models and platform services, while simultaneously expanding their reach closer to the edge.

The major cloud providers operate a relatively small number of extremely large datacenters located in key metros around the world. By contrast, colocation providers like Equinix and Digital Realty operate hundreds of datacenters around the globe.

This reach is not only one of the big attractions of colocation providers, Gartner analyst Matthew Brisse said, but it also turns out to be one of the biggest drivers of M&A activity.

Location, location, location

“Size matters in this business because customers, especially multinational customers, want datacenters in a lot of different places,” O’Donnell said.

According to Brisse, when enterprises start looking into colocation facilities, their main concern is getting workloads spun up in the right place. “The main reason that people go to colos, is location, location, location,” he said.

And this demand has only accelerated as colocation providers look to offer services closer to the edge.

“We see the colocation providers starting to build out their edge offering as opposed to a simple hoteling experience for your infrastructure,” Brisse said.

These aren’t necessarily large datacenter facilities in the traditional sense, either, he explained. These can be as small as a half-sized shipping container positioned at the base of a cell tower.

Smaller regional colocation providers also serve an important role because they tend to build in places the larger players overlook, Brisse explained.

“A lot of companies don’t have the luxury of sitting right next to an Equinix facility,” he said. “There’s lots of opportunities out there for colocation market in totality.”

And as colocation providers inch closer to the edge, Brisse argues networking and automation are only becoming more important.

Where networking plays in

One of the most potent value adds offered by major colocation providers today is networking.

“As you look at the colocation services, the networking services have become a pretty big deal to differentiate them from just being a simple chunk of real estate to plop your servers,” O’Donnell said.

And here again the larger players have the advantage. “Networking connectivity requires a big provider with lots of locations connected by their own fiber,” he added.

These backbone networks allow workloads running in a datacenter on one side of the country to communicate with another without ever going out over the open internet.

But it’s not just networking between colocation datacenters that’s important. Many of these colocation facilities are located directly adjacent to the major cloud and software-as-a-service providers.

“So AWS, for example, or Microsoft Azure might be in the same building as you and connecting to it is just a matter of connecting to a different cage in that same building,” O’Donnell said. “Smaller players can’t do that, but the bigger guys can.”

However, as customers increasingly turn to colocation providers for edge compute and networking, complexity rears its ugly head, Brisse argues.

In the future, “we’re going to have lots of datacenters everywhere; we’re going to have lots of data distributed in the right location; we’re going to have edge facilities everywhere bringing data close to the edge,” he said. “It is not going to be possible for humans to monitor all of that activity.”

So, in addition to growing their footprint and network services, Brisse believes colos will also need to invest in AI operations capabilities to manage this complexity.

More consolidation to come

Both Brisse and O’Donnell expect the colocation market to continue to consolidate as macroeconomic forces put a pressure on smaller players.

“If the economic troubles we’re seeing are persistent, I think we will see an acceleration of this kind of [M&A] activity,” O’Donnell said.

It’s important to remember that while colos may look like tech companies on the inside, on the books, they’re really real estate investment trusts, he said, adding that in the current economic environment, colos are a comparatively safe bet in an otherwise dismal commercial real estate market.

“Colo is a hot market and getting hotter,” O’Donnell said. ®

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Culture

Top 10 Florida Cities Dominate The Business Startup Landscape In The U.S.

Top 10 Florida Cities And Business Startup Landscape In The U.S.

The Voice Of EU | Florida emerges as a hub for entrepreneurial endeavors, with its vibrant business landscape and conducive environment for startups. Renowned for its low corporate tax rates and a high concentration of investors, the Sunshine State beckons aspiring entrepreneurs seeking fertile grounds to launch and grow their businesses.

In a recent report by WalletHub, Florida cities dominate the list of the top 10 best destinations for business startups, showcasing their resilience and economic vitality amidst challenging times.

From Orlando’s thriving market to Miami’s dynamic ecosystem, each city offers unique advantages and opportunities for entrepreneurial success. Let’s delve into the chronologically listed cities that exemplify Florida’s prominence in the business startup arena.

1. Orlando Leads the Way: Orlando emerges as the most attractive market in the U.S. for business startups, with a remarkable surge in small business establishments. WalletHub’s latest report highlights Orlando’s robust ecosystem, fostering the survival and growth of startups, buoyed by a high concentration of investors per capita.

2. Tampa Takes Second Place: Securing the second spot among large cities for business startups, Tampa boasts a favorable business environment attributed to its low corporate tax rates. The city’s ample investor presence further fortifies startups, providing essential resources for navigating the initial years of business operations.

3. Charlotte’s Diverse Industries: Claiming the third position, Charlotte stands out for its diverse industrial landscape and exceptionally low corporate taxes, enticing companies to reinvest capital. This conducive environment propels entrepreneurial endeavors, contributing to sustained economic growth.

4. Jacksonville’s Rising Profile: Jacksonville emerges as a promising destination for startups, bolstered by its favorable business climate. The city’s strategic positioning fosters entrepreneurial ventures, attracting aspiring business owners seeking growth opportunities.

5. Miami’s Entrepreneurial Hub: Miami solidifies its position as a thriving entrepreneurial hub, attracting businesses with its dynamic ecosystem and strategic location. The city’s vibrant startup culture and supportive infrastructure make it an appealing destination for ventures of all sizes.

6. Atlanta’s Economic Momentum: Atlanta’s ascent in the business startup landscape underscores its economic momentum and favorable business conditions. The city’s strategic advantages and conducive policies provide a fertile ground for entrepreneurial ventures to flourish.

7. Fort Worth’s Business-Friendly Environment: Fort Worth emerges as a prime destination for startups, offering a business-friendly environment characterized by low corporate taxes. The city’s supportive ecosystem and strategic initiatives facilitate the growth and success of new ventures.

8. Austin’s Innovation Hub: Austin cements its status as an innovation hub, attracting startups with its vibrant entrepreneurial community and progressive policies. The city’s robust infrastructure and access to capital foster a conducive environment for business growth and innovation.

9. Durham’s Emerging Entrepreneurship Scene: Durham’s burgeoning entrepreneurship scene positions it as a promising destination for startups, fueled by its supportive ecosystem and strategic initiatives. The city’s collaborative culture and access to resources contribute to the success of new ventures.

10. St. Petersburg’s Thriving Business Community: St. Petersburg rounds off the top 10 with its thriving business community and supportive ecosystem for startups. The city’s strategic advantages and favorable business climate make it an attractive destination for entrepreneurial endeavors.

Despite unprecedented challenges posed by the COVID-19 pandemic, the Great Resignation, and high inflation, these top Florida cities remain resilient and well-equipped to overcome obstacles, offering promising opportunities for business owners and entrepreneurs alike.


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European Startup Ecosystems Awash With Gulf Investment – Here Are Some Of The Top Investors

European Startup Ecosystem Getting Flooded With Gulf Investments

The Voice Of EU | In recent years, European entrepreneurs seeking capital infusion have widened their horizons beyond the traditional American investors, increasingly turning their gaze towards the lucrative investment landscape of the Gulf region. With substantial capital reservoirs nestled within sovereign wealth funds and corporate venture capital entities, Gulf nations have emerged as compelling investors for European startups and scaleups.

According to comprehensive data from Dealroom, the influx of investment from Gulf countries into European startups soared to a staggering $3 billion in 2023, marking a remarkable 5x surge from the $627 million recorded in 2018.

This substantial injection of capital, accounting for approximately 5% of the total funding raised in the region, underscores the growing prominence of Gulf investors in European markets.

Particularly noteworthy is the significant support extended to growth-stage companies, with over two-thirds of Gulf investments in 2023 being directed towards funding rounds exceeding $100 million. This influx of capital provides a welcome boost to European companies grappling with the challenge of securing well-capitalized investors locally.

Delving deeper into the landscape, Sifted has identified the most active Gulf investors in European startups over the past two years.

Leading the pack is Aramco Ventures, headquartered in Dhahran, Saudi Arabia. Bolstered by a substantial commitment, Aramco Ventures boasts a $1.5 billion sustainability fund, alongside an additional $4 billion allocated to its venture capital arm, positioning it as a formidable player with a total investment capacity of $7 billion by 2027. With a notable presence in 17 funding rounds, Aramco Ventures has strategically invested in ventures such as Carbon Clean Solutions and ANYbotics, aligning with its focus on businesses that offer strategic value.

Following closely is Mubadala Capital, headquartered in Abu Dhabi, UAE, with an impressive tally of 13 investments in European startups over the past two years. Backed by the sovereign wealth fund Mubadala Investment Company, Mubadala Capital’s diverse investment portfolio spans private equity, venture capital, and alternative solutions. Notable investments include Klarna, TIER, and Juni, reflecting its global investment strategy across various sectors.

Ventura Capital, based in Dubai, UAE, secured its position as a key player with nine investments in European startups. With a presence in Dubai, London, and Tokyo, Ventura Capital boasts an international network of limited partners and a sector-agnostic investment approach, contributing to its noteworthy investments in companies such as Coursera and Spotify.

Qatar Investment Authority, headquartered in Doha, Qatar, has made significant inroads into the European startup ecosystem with six notable investments. As the sovereign wealth fund of Qatar, QIA’s diversified portfolio spans private and public equity, infrastructure, and real estate, with strategic investments in tech startups across healthcare, consumer, and industrial sectors.

MetaVision Dubai, a newcomer to the scene, has swiftly garnered attention with six investments in European startups. Focusing on seed to Series A startups in the metaverse and Web3 space, MetaVision raised an undisclosed fund in 2022, affirming its commitment to emerging technologies and innovative ventures.

Investcorp, headquartered in Manama, Bahrain, has solidified its presence with six investments in European startups. With a focus on mid-sized B2B businesses, Investcorp’s diverse investment strategies encompass private equity, real estate, infrastructure, and credit management, contributing to its notable investments in companies such as Terra Quantum and TruKKer.

Chimera Capital, based in Abu Dhabi, UAE, rounds off the list with four strategic investments in European startups. As part of a prominent business conglomerate, Chimera Capital leverages its global reach and sector-agnostic approach to drive investments in ventures such as CMR Surgical and Neat Burger.

In conclusion, the burgeoning influx of capital from Gulf investors into European startups underscores the region’s growing appeal as a vibrant hub for innovation and entrepreneurship. With key players such as Aramco Ventures, Mubadala Capital, and Ventura Capital leading the charge, European startups are poised to benefit from the strategic investments and partnerships forged with Gulf investors, propelling them towards sustained growth and success in the global market landscape.


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China Reveals Lunar Mission: Sending ‘Taikonauts’ To The Moon From 2030 Onwards

China Reveals Lunar Mission

The Voice Of EU | In a bold stride towards lunar exploration, the Chinese Space Agency has unveiled its ambitious plans for a moon landing set to unfold in the 2030s. While exact timelines remain uncertain, this endeavor signals a potential resurgence of the historic space race reminiscent of the 1960s rivalry between the United States and the USSR.

China’s recent strides in lunar exploration include the deployment of three devices on the moon’s surface, coupled with the successful launch of the Queqiao-2 satellite. This satellite serves as a crucial communication link, bolstering connectivity between Earth and forthcoming missions to the moon’s far side and south pole.

Unlike the secretive approach of the Soviet Union in the past, China’s strategy leans towards transparency, albeit with a hint of mystery surrounding the finer details. Recent revelations showcase the naming and models of lunar spacecraft, steeped in cultural significance. The Mengzhou, translating to “dream ship,” will ferry three astronauts to and from the moon, while the Lanyue, meaning “embrace the moon,” will descend to the lunar surface.

Drawing inspiration from both Russian and American precedents, China’s lunar endeavor presents a novel approach. Unlike its predecessors, China will employ separate launches for the manned module and lunar lander due to the absence of colossal space shuttles. This modular approach bears semblance to SpaceX’s Falcon Heavy, reflecting a contemporary adaptation of past achievements.

Upon reaching lunar orbit, astronauts, known as “taikonauts” in Chinese, will rendezvous with the lunar lander, reminiscent of the Apollo program’s maneuvers. However, distinct engineering choices mark China’s departure from traditional lunar landing methods.

The Chinese lunar lander, while reminiscent of the Apollo Lunar Module, introduces novel features such as a single set of engines and potential reusability and advance technology. Unlike past missions where lunar modules were discarded, China’s design hints at the possibility of refueling and reuse, opening avenues for sustained lunar exploration.

China Reveals Lunar Mission: Sending 'Taikonauts' To The Moon From 2030 Onwards
A re-creation of the two Chinese spacecraft that will put ‘taikonauts’ on the moon.CSM

Despite these advancements, experts have flagged potential weaknesses, particularly regarding engine protection during landing. Nevertheless, China’s lunar aspirations remain steadfast, with plans for extensive testing and site selection underway.

Beyond planting flags and collecting rocks, China envisions establishing a permanent lunar base, the International Lunar Research Station (ILRS), ushering in a new era of international collaboration in space exploration.

While the Artemis agreements spearheaded by NASA have garnered global support, China’s lunar ambitions stand as a formidable contender in shaping the future of space exploration. In conclusion, China’s unveiling of its lunar ambitions not only marks a significant milestone in space exploration but also sets the stage for a new chapter in the ongoing saga of humanity’s quest for the cosmos. As nations vie for supremacy in space, collaboration and innovation emerge as the cornerstones of future lunar endeavors.


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