Wednesday, November 17, 2010

Ethernet, M&A, Data Center Expansions Sum It All Up

Each week I take stock on the major headlines hitting the wires in the world of telecom. The news this past week has been chock full of companies announcing global Ethernet deployments, data center expansions and a variety of partnerships including some interesting M&A activity. A few companies jumped out in the headlines this past week - so I will use this space to tell you a bit about what they are doing.

Leading the pack with at least three different announcements was AboveNet. The company had consecutive announcements regarding market expansions in Chicago, London and the Baltimore/Washington DC corridor. All announcements touted the company's Carrier Ethernet capabilities. AboveNet is offering low-latency, high bandwidth connectivity within these key markets and beyond. The company is also connected to a number of Ethernet Exchange providers which further extends its reach and accessibility to the market.

Another interesting announcement came from Tata Communications. Tata has announced that it has launched a next-generation Ethernet network. Their announcement had a few differentiators. Tata is using PBB (Provider Backbone Bridging) Technology across its network globally. Powered by Cisco, they are offering scalable Ethernet worldwide. What makes this interesting is that PBB technology is not new. And while Ethernet Exchanges continue to make a splash, Tata is looking to get to market on its own. Tata may be the first provider to use PBB technology globally, but back on June 25, 2009, PacketExchange (then Mzima Networks) announced its deployment of PBB technology using Ciena's Carrier Ethernet Service Delivery pack. PacketExchange's announcement was not global, but was one of the first to deploy PBB-TE.

Finally, to complete the Ethernet news highlights, Neutral Tandem announced that it has completed the integration of its network with Tinet, creating the largest global Ethernet exchange. This news came out at Light Reading Ethernet's Expo held at the beginning of November 2010, but worth noting again.

Moving on to data center expansions - a lot of news highlights to share!

Net2EZ , a managed data center provider expanded its footprint into New Jersey at Dupont Fabros' NJ1 data center in Piscataway, NJ.

CyrusOne expanded its colocation footprint in Dallas, adding 65,000 square feet of data center space.

Facebook announced it is building a new, $450 million data center facility in North Carolina. Just think of all of the live feeds, pictures, videos and messages that will be stored here!

Finally - big news from Apple. You think $450M is a lot? Apple plans to build a massive new $1 billion data center as a hub for an all-streaming broadcast network. Now that's big - on a variety of levels!

With Ethernet network expansions, Data Center build-outs the market is still seeing quite a bit of M&A activity. I'm going to touch on a few before I go a little deeper into the announced acquisition of Arbinet by Primus.

- EMC to buy Isilon
- Windstream Corp to acquire Hosted Solutions
- Softlayer finalizes its acquisition of The Planet, becoming the third largest host of web servers
- Cbeyond acquires MaximumASP
- Carlyle to acquire Syniverse

and more - including - Primus Telecommunications intends to acquire Arbinet Corporation in a stock-for-stock transaction. The acquisition by Primus makes perfect sense for both companies. The acquisition will allow each company to leverage the assets of the other to become a much larger entity, better able to compete in the increasing competitive carrier market. We all know minute rates continue to fall at the same rate that demand for VoIP is increasing - companies need to find a way to compete more efficiently. Together, the companies will be able to lower their cost structure, provide enhanced product and services (including leveraging Arbinet's IP data exchange which provides a cost-effective quality service ideal for VoIP providers), and expand their international reach - collectively. The fact of the matter is that 1+1=3 in this scenario - which will make for a more interesting global carrier marketplace increasing the value and quality of services for all.

I have left out a lot as there is no way I can cover it all. I still have a lot to say and will continue my coverage on Telecom News Now. I'm preparing a thanksgiving blog that will give you something to feast on! Until then....

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