Merger and Acquisition Targets

Mergers and acquisitions are always fun to speculate on. In this industry it seems like a week doesn't go by where some M&A activity is happening. With the recent Equinix acquisition of Switch and Data I have to wonder if more data center industry acquisitions will happen before the end of the year. Both Google and Cisco have said that shopping sprees will continue to gain speed in 2010.

thedeal.com had a Barron's article summary that intrigued me today about M&A speculation. The article points to 10 technology companies that are potential takeover candidates, including several that I have thought of:

1. Riverbed (RVBD | $1.53B market cap): major competitor to Cisco's WAN Optimization and Application Acceleration products. I've always thought Cisco would buy them, but perhaps HP is better suited.
   
2. NetApp (NTAP | $9.63B market cap): another possible target for Cisco. Otherwise maybe HP or Dell?
   
3. F5 Networks (FFIV | $3.73B market cap): No idea; maybe HP or EMC
   
4. Brocade (BRCD | $3.69B market cap): seems like HP is the lead candidate... if not, maybe EMC or IBM
   

and others.... Check out the complete article and list here.

Switch and Data Shareholder Investigation

There was an interesting development in the Equinix acquisition of Switch and Data late this last week. Kendall Law Group announced a shareholder investigation into Switch and Data Board of Directors in connection with the proposed acquisition by Equinix.

Their release states:

"Kendall Law Group’s investigation concerns whether the consideration to be paid to shareholders below the fair or inherent value of the Company and whether the directors and may have breached their fiduciary duties by not acting in the shareholders’ best interests in connection with the sale process."

Kendall is a national law firm and are either very large, or sue-happy, because there were 8 other investigation or class-action lawsuits announced last week according to their site.

The law offices of Howard G. Smith are apparently investigating as well.

Iowa Now Second Largest Wind Producer

The Wall Street Journal reports that Iowa has become the second largest producer of wind power in the U.S.. Tax breaks, cost recovery assurance and few zoning regulations for wind turbines are cited as reasons for the ranking.

At the end of the second quarter of 2009, Iowa had 3,043 megawatts of total wind capacity, compared with 8,361 megawatts in Texas and 2,787 megawatts in California, according to the wind-energy association. The article continues by saying that Iowa is flat landscape and lies in an enviable position on the grid - close to load centers like Chicago and Milwaukee.

Power transmission is now the road block to continued success in Iowa. Roya Stanley, Director of the Iowa Office of Energy Independence said "While we still have some room on the grid in the state, it will be critical to have agreement regionally for further transmission build-out."

The WSJ also has a very interesting article on Five Technologies that Could Change the Energy Picture. It discusses space-based solar power, advanced car batteries, utility storage, carbon capture and storage, and next-generation biofuels.

Waves, BIG Waves and Outage Explanation

Quite the news day this Tuesday, September 29, 2009

1. Google Wave will send out 100,000 invitations to Google Wave tomorrow. This is shaping up to be 'the' killer app of the year/decade. With the hype machine in full swing we'll see if it lives up to the promise. I have my request in for an invite!

2. BIG wave : after a magnitude 8.0 earth quake was recorded near American Samoa, a Tsunami warning for the South Pacific was issued. A Tsunami advisory was apparently issued for Northern California.

3. The Google Apps Sep.24 outage was a result of a high load on Google Contacts. Contacts is an integral part of Google Wave.

Cloud Computing Analysis From Irving Wladawsky-Berger

Just a quick link to an outstanding blog post by Irving Wladawsky-Berger. I've linked to him before, because I thoroughly enjoy his thoughts and analysis. Among the amazing amount of cloud computing hype out there, Irving truly gets it and shows us how clouds and computing have evolved and will continue to.

Check out his August 31 post on The Data Center in the Cambrian Age. He compares cloud computing to the Cambrian Age, a geological period where evolution accelerated rapidly into more complex life forms. He also references an excellent paper done by Google engineers Luis Andre Barroso and Urs Hoelzle on Wharehouse-Scale computers.

Data Centre Stock Index Launched

The Broad Group has announced the "World's first global data centre market performance index". The index is a partnership with Data Centre News and AHV Associated LLP, a corporate finance advisor based in London. The index is a capitalisation-weighted index of large companies in the data center sector from all over the world. The index has shown so far that the U.S. dominates companies in the sector and that the sector is yielding good returns for the leading public companies engaged in data centres.

I of course, MUST protest about the "first data center index" claim of course. :) Just about a year ago I started my own capitalization-weighted index of companies I felt were at the heart of the data center industry. I recently posted an update with the graphs for how it has been doing. I maintain it in Google Spreadsheets, and would be happy to share it if anyone is interested.

The Internet turns 40

As a follow-up to my post yesterday on BBN -- I found this article at ComputerWorld about the Internet turning 40. September 2, 1969 (very good year) computer scientists at UCLA created the first network connection between two computers. Companies present during this exciting time were GTE Corp., DARPA, Honeywell and Scientific Data Systems.

The article interviews UCLA distinguished Professor of Computer Science Leonard Kleinrock, who was one of the men who enabled the two computers to exchange data. The UCLA web site also has a personal history/biography of Kleinrock: "The Birth of the Internet"

Raytheon Acquires BBN Technologies

Government contractor Raytheon has acquired BBN Technologies. Most people (I think) won't even recognize the company name BBN Technologies. I've been in IT long enough (barely) that I remember BBN from the very early days of the Internet. BBN is a Massachusetts company known for the development of packet switching, including work for the ARPANET; predecessor to the Internet. They also developed the first TCP protocol for Unix. Wikipedia has the wonderful merger and acquistion history for BBN:

BBN was acquired by GTE in 1997 and BBN's ISP division BBN Planet was joined with GTE's national fiber network to became GTE Internetworking, "powered by BBN". When GTE and Bell Atlantic merged to become Verizon in 2000, the ISP portion of BBN was included in assets spun off as Genuity. In March 2004, Verizon sold BBN to a group of private investors. In September 2009 Raytheon entered into an agreement to acquire BBN

Following the acquisition, BBN Technologies will become part of Raytheon Network Centric Systems.
I had not been to the BBN web site in quite some time ; upon browsing, they have some pretty amazing research projects listed:

1. Flexible Intra-autonomous-system Routing Environment
2. Smart Environment for Network Control, Monitoring and Management
3. Density-and Asymmetry-aware wireless Networking
4. Proprietary waveforms for wireless networks
5. Terabit router traffic engineering

Network World has a very nice article (back in May) on DARPA military research projects. Check this one out (from the Network World article):

DARPA's Quantum Entanglement Science and Technology (QuEST) program is creating new quantum information science technologies, focusing on loss of information due to quantum decoherence, limited communication distance due to signal attenuation, protocols, and larger numbers of quantum bits (Qubits) and their entanglement. Key among the program's challenges is integrating improved single- and entangled-photon and electron sources and detectors into quantum computation and communication networks. Defense applications include highly secure communications, algorithms for optimization in logistics, highly precise measurements of time and position on the earth and in space, and new image and signal processing methods for target tracking.

Now -- I'm off to read patent 7,242,774 : Quantum Cryptography Based on Phase Entangled Photons

Green Storage, Smart Grids, and Wireless Spectrum for Utility Providers

Earth2tech has an excellent article on smarter storage -- how data storage can account for up to 40 percent of the energy consumed by a data center. GigaOm's Tom Trainer offered data de-duplication and thin provisioning as technologies that were helping the greening efforts. 3Par is a leader in thin provisioning, which is a "mechanism that applies to large-scale centralized computer disk storage systems, SAN's and storage virtualization systems". 3Par recently helped Mary Kay save 50% in storage capacity and 60% administration time with 3PAR Utility Storage and six InServ storage servers.

Last week Vint Cerf had a Google Public Policy blog post titled Where the smart grid meets the Internet. Vint has some awesome insight (as always) into building the smart grid and how it is essentially a nascent energy Internet. He stresses open protocols, open standards and free access to all of the energy information generated.

Finally -- Earth2tech also has an article today about American Electric Power (AEP) telling the FCC that a dedicated licensed spectrum is sorely needed by utilities. AEP is saying that as more smart grid services are rolled out, more and more network bandwidth is needed.

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.

Smart Grids, City 2.0 and Project Netal

Ok, so those 3 things aren't related -- I just had a couple of things I ran across tonight that I found interesting....

1. Cisco looks to ride smart-grid data deluge. This one is pretty apparent if you follow the Cisco news and EnergyWise software announcements. I keep waiting for a Cisco acquisition -- particularly in this space.

2. HP's vision of building City 2.0. HP Labs sustainability visionary Chandrakant Patel describes his vision of building City 2.0, enabled by a sustainable IT Ecosystem. Pretty interesting interview/article.

3. Ok -- so this one is not data center related, but is just frigg'n cool. :) Cnet has an exclusive on Microsoft's project Natal. Netal is a next generation gaming platform (REALLY next generation) with no controller required.

one last one, as long as we're talking about the big companies in IT : BusinessWeek posted an interview with Eric Schmidt last week and asks several questions about where Google is headed next.

Now With 20% More Fiber!

The DataCenterDynamics site has an article I really liked, titled The American Clould's Weakest Link. It covers the sobering speech given by Allied Fiber CEO Hunter Newby at the Seattle DataCenterDynamics conference Thursday. Newby said "Moving apps into the cloud is very dangerous if you don't know your physical fiber route". How very true -- I almost think people take the physical connectivity between data centers for granted some times.

$7.2 Billion of the recent U.S. stimulus money was dedicated to developing the country's broadband infrastructure. Allied Fiber has been applying for stimulus funding and dreams of building one large fiber ring around the country.

I've worked with several places and brokers that know where all of the fiber routes are in America -- what a fun resource that would be to have as public domain. I think much more fiber investment is needed in this country and NOT just in the big / tier 1 cities and markets. I think if the U.S. is to stay competitive, on both the business and home side of things, we must have a more robust fiber infrastructure that reaches everyone. Next to cheap land and cheap power, data center site selection places a strong emphasis on the amount of lit and dark fiber available in the area.

Allied Fiber and TMCnet have built a Dark Fiber Community to bring together optical network providers and the suppliers who help them build. I've also worked with NEF and the vast database of buried and lit services they have. They also have a natural extension of that business in findadatacenter.com Another favorite site and set of research reports I would Love to use if I had money burning a hole in my pocket is TeleGeography.....some pretty cool data here.

DOE Smart Grid Report and $57 Million Funding

Renewable Energy World reports on the DOE $57 million to fund smart grid development yesterday. The original announcement was back on July 20th and included more than $47 million in funding under the American Recovery and Reinvestment Act and $10.5 million to increase the nation's energy security. Wednesday Energy Secretary Steven Chu announced the delivery of more than $47 million in funding. The DOE also released a Smart Grid Report. Other items of interest on their web site include:

• The Smart Grid: An Introduction
• Smart Grid E-Forums
• Federal Smart Grid Task Force
• Grid 2030 Vision
• Modern Grid Strategy - a project of the National Energy Technology Laboratory

Science News also had an interesting article recently about Electromagnetic weaponry being used on the electric grid.

NASA's Nebula a Possible Federal Cloud Prototype

nextgov.com reports that a NASA cloud computing model, called Nebula is being looked at by NASA and the Obama administration for federal agencies to outsource IT services to a shared platform. "A significant journey ahead" may be an understatement -- an estimated 10 year migration would have several hurdles to manage.

NASA's Chris Kemp is working with the federal government's could computing working group. NASA CIO's Chris Kemp and Linda Cureton have blogs that I have been following for a while now. Chris managed the Google relationship and talks of the larger strategy with NASA and Google, Microsoft and Cisco. The NASA/Ames Research Center has the current #4 supercomputer (Pleiades), a SGI Altix ICE 8200 wiht a measly 51TB of memory.

Federal CIO Vivek Kundra held a live chat several weeks back and has pretty ambitious plans for federal IT and data. You can see that even Vivek Kundra learned from Google -- the IT Dashboard site (very nice by the way) has a "beta" stamp on it.

Like many commercial data center consolidation projects, the federal government has about 70 data centers with "various levels of efficiency and availability that NASA is trying to contract to two outsourced data centers".

"Obama's fiscal 2010 budget proposal envisions optimizing cloud computing by "scaling pilots to full capabilities and providing financial support to accelerate migration," the budget stated. The fiscal plan acknowledges the effort will involve upfront costs, but the expense should be more than offset by savings from consolidating data centers."

Let's see -- one cloud with Google and one with Microsoft -- and then use all Cisco gear to network them together. :)

Check out the nextgov.com article here.

Emerson St. Louis Data Center

Today I attended the open house for the new Emerson Global data center in St. Louis. The data center and presenting staff were both very impressive. The data center, like many corporate initiatives we’ve heard about in recent years, was a consolidation project. Emerson consolidated over 100 data centers they had around the world in remote offices, acquired companies and such and made the St. Louis facility a showcase, done right from the start, high density facility to serve the enterprise. The consolidation project will continue overseas with Europe and Asia facilities.

Some quick specs from this impressive facility include:

35,000 square foot --- 12,000 sq. ft. raised floor and ultimately capacity for 5,000 servers

Anticipating a LEED Gold certification

7,800 square foot Solar array on the roof providing 100kW of power to the IT Load

Applied all 10 attributes of their own Energy Logic road map.

Designed to cope with a variety of natural and man-made disasters (earthquakes, tornadoes, flooding, fires and telecom fiber cuts). The facility was built to withstand up to a F3 tornado or an earthquake up to 8.0 on the Richter scale.

Integrates numerous Emerson Network Power products – including Alber, Aperture, ASCO, Knurr and Liebert.

2 Caterpillar generators, with the capability to add 2 more.

72 hours of fuel on-site plus room to place an additional fuel tank.

Mostly new IT equipment populating the cabinets: Cisco, Dell, EMC and Sun.

Three layers of redundancy:

a. Dual utility feeds (separate physical paths into the building)

b. A and B side mechanical rooms / redundant UPS

c. N+1 Caterpillar generators

In Uptime Institute tier standards it comes about as close as you can to a tier IV data center. Dual-everything inside the building is used to the extent of having A & B telcom rooms where visiting technicians do not have to enter the data center or mechanical rooms to work on carrier equipment. There was great detail paid to the layout of the facility to ensure a separation of IT and facilities staff.

The LEED certification and renewable energy aspect to the facility was impressive. St. Louis based Fox Architects led a multi-disciplinary design and engineering team through years of

planning and 18 months of construction. Fox Architects also led the Monsanto data center project from a few years back. The solar array on the roof gives the ability to (manually) provide 100kW of DC power, directly to the IT load below. They use a Solectria Renewables Grid Tiered Photovoltaic inverter and boast that it is the largest solar array in the state of Missouri. The facility was originally planned to achieve silver LEED certification, but several items gave them additional points, such as approximately 80% of the waste generated during the construction has been diverted from landfills.

Site selection (to me) was a no-brainer, but primary reasons listed by Emerson were low power rates (typically 3-5 cents per kWh), low natural disaster risk, and low telecommunication rates. The sister site Emerson has in Marshalltown Iowa serves as a disaster recovery site and (now) vice versa.

As expected all of the latest and greatest Emerson products were used inside the facility.

Emerson even makes a component inside the Caterpillar generators used. There was amazing use and integration with their Site Scan and Aperture Vista products. A lobby television displays an interactive one-line diagram of their power infrastructure that can also be viewed on their internal corporate network. Site Scan is the dashboard for viewing a wide variety of data on the facility, load, IT equipment and other critical components. Emerson also incorporated the strategies and technologies advocated in their Energy Logic roadmap for improving efficiency. For instance they used a 240 volt power distribution architecture instead of the typical 208V. Aperture Vista is used for facility operations and future planning.

The “Liebert Adaptive Architecture” was seen in action throughout the facility:

1. Liebert DS precision cooling system

2. Liebert NXL on-line UPS

3. Liebert XD Cooling module (used when they had blades or higher density in a cabinet)

4. The web based monitoring of Site Scan

5. Liebert FDC power distribution cabinet

6. Liebert MPX adaptive rack PDU. This was just pretty darn cool. The word ‘adaptive’ is key here. It’s modular, re-configurable, supports NEMA and IEC, has SNMP and a host of other metrics and monitoring capabilities. The product is not yet released, but I was able to find this German Knurr brief on it – here.

The IT equipment going in to phase 1 of this facility will include around 400 servers plus storage and network gear. They intend to use blade systems (Sun I assume) and have approximately a 15:1 virtualization ratio. All network distribution to the cabinets is fiber. Following the dual-everything approach, each cabinet is fed A and B side fiber runs and there is NO copper in the under-floor trays. The 3 foot raised floor serves all electrical connectivity, cable trays for communication and FM200 protection.

The FM200 distribution under-floor was interesting to me. With so much going on under the floor the thought was to put out the fire in this 3 foot raised area, but not above floor for the IT equipment. Above floor fire protection comes in the form of pre-action dry pipe. This is also then used in power equipment rooms that are on slab.

Designed to be a lights-out facility, the on-site staff may just achieve that if they sit still too long and the motion-detection lights shut off. J CNN was playing on the TV in the lobby, which means cable, which means the St. Louis Cardinals SURELY are on whenever the boss isn’t around.

New Paetec Data Center

Communications provider Paetec announced Thursday that they are opening an advanced data center in Bethlehem, Pennsylvania.

"The 6,500 square feet of space available for customers includes the newest advancements in equipment with connectivity up to 10 Gbps, more energy efficient devices, higher cooling capacity to meet the increasingly powerful applications and a new Bi-Fuel power system providing redundant power generation fueled by conventional diesel, or a cleaner combination of diesel and natural gas. The center is also served by a diverse power grid, separate from New York City and Philadelphia, offering further resiliency in the event of a wide-scale brown-out or power outage in the area."

The press release mentiones Paetec's data center solutions -- at fast.net ; but I am unable to get a web page to resolve at that address. According to archive.org the fast.net site dropped off in late 2007. More information on hosting/colocation off of the Paetec web site can be found here.

UPDATE: Not sure if it was my connection or their site down last night --- fast.net is now resolving for me.

Renewable Energy Roundup

I've run across several items recently of interest in terms of smartgrids, new energy sources and reports on renewable energy.

Blue is the new Green

THE man, Mr. Bob Metcalfe (small invention known as Ethernet) -- is a partner in Polaris Venture Partners, a group of "experienced venture capital investors and technology executives." Polaris backs many IT and life science businesses and has an Enertech portfolio that is pretty impressive. Bob Metcalfe has a very interesting SlideShare presentation titled Internet History Applied to Solving Energy. This was from the March presentation at GigaOm's Green:Net -- I must have missed that, but this presentation is pretty cool.

Frost & Sollivan also have a nice SlideShare presentation on Utility-Scale (Grid) Energy Storage Development. Bulk Energy Storage + Power Generation = Grid Modernization

The DOE announced today up to $52.5 Million for concentrating solar power research and development.

The 20% Wind report card was released last week -- B overall, Transmission lags at C-. "National Policy Commitment Urgently Needed to Ensure Greater Use of Clean, Abundant Energy Source". Check out the report here.

Technology Review had an article yesterday about upgrading the electrical grid in the U.S. if it is to increase the use of renewable energy resources. "But plans to string new high-voltage lines to bring wind power from the midsection of the country to the coasts, where most of the demand is, could be expensive and unnecessary, and a distraction from more urgent needs, some experts say."

Also reported yesterday -- treehugger.com has an article on Baltimore's massive smart grid program where 2 million meters are being installed. Earth2tech also has an article on this.

Treehugger.com also reports that a new U.S. renewable energy record was set: 13% of total electric generation in April 2009.

I've seen a number of things online now about energy transmission problems and to lend to that, last week T. Boone Pickens announced that his plans to build the $10 Billion, 4,000 megawatt, Pampa Wind project are on hold. Energyworld.com article with the rest of the details here.

Superb Intnernet Hosting - New Virginia Data Center

Superb Internet announced the opening of a new data center today, located in Springfield, Virginia. DCA3 compliments its two existing data centers in McLean, VA and Seattle, WA. The new facility will facilitate a continued strong demand for data center space and they will offer dedicated servers as well as colocation services.

Check out the press release here.

SGI/Rackable ICECube Deployment Video

SGI/Rackable has some new media on their site for the ICE Cube Modular Data Center. I think this container has been one of my favorites ever since I saw it at a DataCenter World conference. It is really pretty unique in the container market -- if you get SGI servers inside. They take the fans out of the servers and are able to get amazing density: 1400U of available space and up to 22,400 processing cores. If you haven't seen inside of an ICE Cube - check out this video.

Check out this page on their site for a new product video, plus a nice white paper about their "Next Generation Data Center Infrastructure".

The Greenest Supercomputer

SGI performed quite well in the semi-annual ranking of the world's TOP500 Supercomputer sites this past June. They had the #4 supercomputer -- the Pleiades - Altix ICE 8200EX at the NASA/Ames Research Center. Although not an official award, they also were heralded as the industry's "greenest" supercomputer, as measured by performance efficiency.

Performance efficiency, or “LINPACK efficiency,” measures the ratio between maximum performance (RMax) and peak performance (RPeak). SGI dominated this new category with 12 of the 20 most performance-efficient supercomputers in the world."

Additionally the SGI Altix ICE cluster is the first time that an x86 scalar-based system outperformed vector-based systems.

Last week SGI/Rackable announced their x86 scale-out servers to support both on-board Quad Data Rate 40Gb InfiniBand and 10Gb Ethernet connections.

"The features of the expanded Rackable x86 server lines include dual QSFP InfiniBand/Ethernet ports at up to 40 Gb/s (gigabits-per-second), Intel Xeon 5500 series "Nehalem" processors, including the top-bin W5580 running at 3.2 GHz, and large memory capability with up to 96 GB (gigabytes) of ECC registered DDR3 DIMMs. It is also power optimized with over 90 percent voltage regulator module efficiency on the server board, which perfectly complements SGI’s up-to-96.5 percent-efficient power supplies."

96GB of memory! One of the things that made me such a fan of SGI was a computer I saw in 1994; a SGI with 4GB of memory (which was a TON back then). It ran a flight simulator that looked Amazing.....