Data Center Stock Index Update

As I approach almost a full year of tracking my data center stocks, I thought I would post the chart for the wild ride it has been. I think for the most part these stocks have weathered the recession pretty well, and as you can see, they are doing quite well lately. Reference this blog post to see what stocks are included in my capitalization-weighted index.

Here is the October 2008 through August 21, 2009 graph:

Earlier this year I started a second index: Equinix, Savvis, Switch and Data and Terremark. Here is the graph for that index.

Data Center Stock Market News

Just a couple of items I noticed today in regards to the data center stocks I monitor. First, is an update to the data center stock index I started last year. It has been a roller coaster -- here is the latest graph:

More details on what the index is comprised of can be found here.

The Dow Jones Internet Composite Index has also been graphing quite nicely the last 3 months.

The second story was one I some how missed last week -- Wachovia resumed coverage of the data center space. They immediately rated Equinix and Switch & Data with OUTPERFORM.

"Both companies have high visibility into its revenue base and low churn driven by 1 – 3+ year contracts with escalators. EQIX, SDXC, and other network neutral data centers benefit from a supply demand imbalance due to growth in IP and internet traffic and limited available space close to fiber hubs for telecom equipment and networking gear"

Also late last week submarine transport cable provider Hibernia announced they have expanded into Equinix's LD4 London Slough IBX data center.

Earlier today Datacenterknowledge reported on VMWare taking a 5% stake in Terremark. In terms of institutional ownership, that puts them in 2nd place, behind Ashford Capital Management, who has a 7.98% stake. I thought the comment on the BusinessWeek investing site was interesting:

"There is significant interest in TMRK by institutional investors. The 29.13% of the shares outstanding that they control represents a greater percentage of ownership than at almost any other company in the Specialty Telecommunications industry."

Data Center Stocks

Remember the part about the economy getting worse before it gets better? Well.... the data center stock index I started back in October continues to set new lows. Today's value was $16.41. I also started tracking 4 colocation companies in a separate index; Equinix, Terremark, Savvis and Switch and Data. Here are my Google Spreadsheet charts for those indexes:

DataCenter Stock Index


Colocation Stock Index




Forbes reported today that Google and Cisco are being eyed as possible Dow candidates. Cisco is getting almost as good as Apple at creating a buz on the net. Eweek reports that Cisco is planning to unveil a new data center strategy on March 16. Much of the speculation was about their new servers, potentially equipped with VMWare software.

"The company would not disclose details of the March 16 announcements on Monday, but a spokeswoman acknowledged that the event would be related to the
speculation. Chief Executive John Chambers and other Cisco executives will
unveil new technology and partnerships, Cisco said."

Speaking of creating a buzz.....I think this video at the Onion is perhaps the funniest one they have done in some time (and they do some funny stuff!).

Finally -- listen to the master investor for a good big picture on the economy and where we are going ; Warren Buffet talks on CNBC.

2008 Data Center Statistics

A lot of people reference statistics this time of year. Many will cite Tier1, Forrester, or Gartner...... me; I'll cite the only thing I have access to: Google. Google Zeitgeist is always interesting to look at and is usually a pretty good indication of what happened throughout the year. Here are some other random statistics that pretty much speak for themselves. Meaningful? Maybe. Maybe not.
Enjoy.

First - the "data center" vs. "data centre" in Google Trends (shows a trend of how often the term is searched in Google).
Next - Google and Microsoft data center projects were both big 2008 stories; here is how they compared in Google Trends:
Proof that Google has ALL of our personal search data, they have at least let us look into the aggregated data with Google Insight for Search. For instance, here is the chart and data for the category of "networking equipment" -- showing that 'cisco', 'router', and 'wireless' were the top 3 search terms in that category.

An Insight search for the term "data center" shows that Pakistan, India and Singapore are searching for that term the most. Equally interesting is the data for just the U.S. that shows top regional interest for "data center" coming from South Dakota!

Finally - here is a look at Equinix, Savvis and Terremark in 2008 U.S. Web search Volume.

Data Center Stock Index For Last Week

The data center stock index I have been tracking closed last week at $20.42. It started the week at $17.66 and just kept on climbing. It will be interesting to see if election day/week has any affect on it.

I have several stocks that I would like to add to the list -- I just want to take one more crack at using the Google spreadsheet to get historical data before starting over with the new stock list.

DataCenterKnowledge.com has an October review of data center stocks today also. Call it a hunch, but I think Terremark will be one to watch -- they have some pretty cool things going on and I think there is a ton of potential there.

DuPont Fabros will release 3rd quarter results the day after elections -- they were down 59.1% in October.

Wednesday Links

Too many stories -- too little time to comment.

Some of these are on the current Wall Street situation (hard to avoid that topic recently).  On a side note to that -- I am building my own stock index for data center companies.  Google Spreadsheet makes this amazingly easy.  I want to get a full week of data before blogging about it though, so more on Monday....

Wednesday Links:

• GigaOm: Sequoia Capital Rings the Alarm Bell: Silicon Valley is in Trouble.   I especially liked the comment near the bottom -- "Start-ups will have to start developing legitimate business plans and actually execute upon their strategy to monetize.  How Horrible.  This is good for tech, not bad".

• Forbes.com -- Tech Earnings Loom

• New York Times - Venture Capitalists are Hearing Footsteps.

• Stratus Technologies Survey: 20% of businesses with Business Continuity Plans have no idea if they will actually work.

• Veritas Cluster Server One -- Symantec Delivers new High Availability Disaster Recovery platform

• Terremark to provide core infrastructure solutions to WiMAX

• Eleven things you didn't know about EMC

• IBM Creates new data center certification

• Sun Microsystems recognized by EPA for surpassing agressive greenhouse gas emissions goal.

whew!

Data Center Cabling

Just a quick link to a story about cabling -- I know, pretty basic stuff, but this article has some good reminders of the basics and cabling is a big part of any data center I have ever seen. The article also quotes a contractor working on the mammoth Terremark NAP of the Capitol Region data center in Culpepper, Virginia.

Check out the Government Computer News article here

Terremark's NAP of the Capital Region Set To Open

The Culpeper Virginia NAP of the Capital Region is set to open June 25th. A local newspaper had a brief article about the invitation-only opening and the fact that Norm Laudermilch, who Rich Miller interviewed a short while back, will continue on as the Managing Director of the 35-acre campus.

The same newspaper had an article about the importance of the Terremark project, taxpayer obligations, and a complex private-public proposal for Culpeper Utility Partners. The article is an interesting read and is another case study in the efforts of economic development departments doing their best to attract high technology business to the area. The massive Terremark of the Capital Region was definitely a catalyst for the area.

Terremark stock has been going down in the latter half of June, but between this NAP opening and their enterprise cloud offering, I would venture that it will pick back up.

Terremark in the News

Terremark has been in the news again recently. On Friday, APCON (maker of matrix switches) announced that Terremark had purchased a 20 switch license of TITAN software for managing APCON switches.

Earlier this morning Cisco announced that Terremark's Infinistructure (TM) Utility Computing platform is using the Cisco Internet Protocol Next-Generation Network (IP NGN) architecture.

"Terremark's Infinistructure platform is a true utility-computing solution designed to solve both the economic and capacity-on-demand shortcomings of traditional infrastructure. Infinistructure's enterprise-class server and storage infrastructure combines Terremark's proprietary digitalOps® service-management platform with leading-edge virtualization technology from Cisco and other companies, providing a highly scalable and flexible high-performance computing platform."

Terremark's NAP of the Americas facilities use a wide range of Cisco products, from ASA's to Catalyst 6500's, and MDS switches.
Check out the CNN Money article here
and the Cisco press release here


I have started to watch Terrermark a little closer over the last few years. I almost forgot that they acquired Data Return this time last year. They placed in the 2008 Gartner Magic Quadrant for Web Hosting and the report had some very positive things to say about them. For instance, they are known for their well engineered solutions and support. I still get a kick out of their Capital Region NAP having DoD-trained anti-terrorism personnel on staff. I think that is the course I need to attend so I can have it on my resume. :)

Terremark: $135 Million Multi-year Contract

A few weeks back we saw a video update of the $270 Million NAP of the Americas from Terremark. Even though it is a little under half of the price of a Google data center, it is a very impressive facility for a colo.

Yesterday Terremark subsidiary, Terremark Federal Group, announced it was awarded a multi-year, competitively bid $135 Million contract (unnamed customer). Now that is what I call an anchor tenant!

"Our ability to provide the federal sector with top-quality services and excellent customer care was a major factor in the awarding of this contract," said Jamie Dos Santos, President and Chief Executive Officer of Terremark Federal Group, Inc.

I would have loved to see who else was bidding on this contract. Check out the press release here.

Techie Drought

A Miami Herald article explores the issue with recruiting and retaining IT employees in Florida. The article might as well be in most any newspaper across the country -- this is a huge problem that many tech companies are facing.

The article mentions Terremark and the fact that having internship programs has helped them out -- to train, mentor and then hire interns into the company.

Check out the article here.

Terremark NAP of the Capital Region

The Terremark $270 Million NAP of the Capital Region is one impressive facility! Virginia site StarExponent.com has a write-up of the new Terremark facility being built in Culpeper, Virginia.

Set to open in June 2008, this data center has some impressive features:

• Two power systems. The first: an array of 55 diesel generators. The second, 440 large flywheels.
• 160 watts per square foot (funny--I keep hearing that this is a bad metric to use).
• It is expected to consume 100 megawatts of electricity.
• 2500 tons of a/c
• Bus-sized chillers fed by 18 inch wide pipes.
  
• They have poured enough concrete to build a 21.5 mile road.
• Campus will consist of up to five 50,000 sq.ft. independent data centers.
• My favorite: DoD-trained anti-terrorism personnel on staff.

The video of construction progress:

The Terremark information page, complete with webcam and video (including an overly dramatic soundtrack) can be found here.

The StarExponent.com article can be found here

A related story about how most of Terremark's workforce could be local ; can be found here

Terremark - Fox Business Interview

Fox Business has their CSuite Sitdown interview with Manny Median, Terremark Worldwide (TMRK) CEO. He discusses their service offerings, the carrier neutral advantage, the competition and Terremark's stock performance.

Check it out here

Terremark Building in Virginia

Totaling 450,000 sq. ft., Terremark is starting on the first 50,000 sq.ft of their data center in Culpeper County Virginia. The $250 million project is expected to put Culpeper County on the map.

With existing facilities in Florida and California, Terremark is looking to provide a little more safety, security and government compliance with the Virginia site. Culpeper is apprixmately 66 miles south west of Washington D.C.

Check out the WHIR news article here (complete with misspelling Culpeper county as a country) :)


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