Wired Real Estate Group Inc. The Internet and Urban Planning. April 4, 2014

Transcription

1 Wired Real Estate Group Inc. The Internet and Urban Planning April 4, 2014

2 Confidentially The Company We Keep 2 of Top 3 Global Telecom, 50% of Top Banks Adobe Agilent Technologies Alchemy Data Centers Apis Capital Archon Capital Management Avista Capital Partners Bain & Company Barclays Capital Battery Ventures Bear Data Bill Me Later Blue Ridge Capital Brookside Capital Cadian Capital Canadian Pension Plan Inv. Board Canyon Capital Realty Advisors Charles Bank Citadel Investment Group Citibank Coatue Capital Colohouse Data Centers Contour Asset Management Coresite Credo Capital Management Crosslink Capital CVC Asia Pacific Eastbourne Capital Management Eminence Capital Farallon Capital Management Fidelity Investments Fir Tree Partners Fore Research & Management Forstmann-Leff Fortress Investments Fortrust Data Centers Fox Point Capital Management Friess Associates Golden Gate Capital Goldman Sachs HHR Asset Management Hoplite Capital I2B Networks InfoBunker Iron Mountain istreet Solutions Karsch Capital LeClair-Ryan Lone Pine Capital Marketcetera Mass. Institute of Technology Matrix Capital Management Maverick Capital McKinstry MiMedia MNP Paribas Morgan Stanley NetRiver Ontario Teachers Pension Plan Oppenheimer Funds Outspark Parthenon Capital Ridgemont Capital SAC Capital Advisors Soros Fund Management Stonerise Investments Swig Company / Fiber Depot Tenor Capital Texas Pacific Group Travelport Valiant Capital Management Verizon Telecom Viking Global Investors Vinakom Networks Vineyard Data Centers Watson Wyatt Wells Fargo Wentworth Real Estate

3 We Are Witnessing the Birth of a New Class of Real Estate Real Estate Specifically Designed to Support the Internet Era. Wired Real Estate Group 2008 Global Data Center Planning, Search, Finance

4 Global Trends in Data Centre Development 1. Growth of the Internet. 2. Dramatic Reduction in Cost of Networking. 3. Virtualization Enabling Centralization. 4. Emergence of Mass Market for Facilities-Based IT (SaaS, IaaS, Cloud, etc.) 5. Increasing Dependence on IT and VOIP Telephony.

5 Global Trends Continued 6. Rising Criticality Justifying Premium Architectures. 7. Growing Awareness of Power Costs, Efficiency. 8. Government Regulation (Access, Security, Integrity). 9. Capital Constraints Leading to Outsourcing. 10. Economic Incentives and Urban Renewal. 90% of Third-Party Colo Revenue from Internet-Based Businesses

6 Typical Investment Economics

7 PB / Month Fast Growth Backed by Hard Assets Internet Traffic Growth (23% CAGR) ,

8 Fast Growth Backed by Hard Assets CAGR Digital Realty Trust 30.67% DuPont Fabros 15.68% Equinix 20.78% Coresite 19.77% CyrusOne 21.80% TOTAL 21.74%

9 Data Centers Can Be Highly Profitable Capital Cost NNN Rent > $1,000 per SF > $150 per SF / Yr RETURN = $150 $900 = 16.7% (Unlevered)

10 Data Centers Can Be Highly Profitable Capital Cost NNN Rent > $9,000 per KW > $1500 per KW/Yr RETURN = $1500 $9,000 = 16.7% (Unlevered)

11 Suburbs, Aggregation Hubs Taking Share WA West Mid (future) East OR NJ NV CO IL VA NC SC Region WEST EAST Fuel Mix RTT in m. Sec Power Costs Cooling % WA 73 % cents 100 OR 74% cents 100 ID / CO 90% cents 100 NC / SC 53% cents 100 VA 43% cents 80? NJ 51% cents 80? TX

12 Consolidation and Interconnection Hubs

13 How It Works 2000 Level(3) Public NAP (Exchange Point) Equinix Abovenet Equinix at&t / Verizon / TWT

14 How It Works 2006 Equinix Level(3) Public NAP (Exchange Point) Equinix Abovenet Equinix at&t / Verizon / TWT

15 Next Generation 2012 Equinix Level(3) Public NAP (Exchange Point) Equinix Abovenet Equinix at&t / Verizon / TWT Next Gen

16 Data Center Efficiency Improvements 1,6 1,5 1,4 1, ,2 1,1 1 PUE

17 Capital Efficiency vs Load Following Peak (JIT) Flex (N-JIT) July January Cloud Colocation June Base Load (Near 100% Util) DCRE

18 Provider Segments & Buyer Profiles Alt + Definition Typical Buyer Profile Buyer s Perceived Benefits Buyer Cons Build-to-Suit & Build, Own & Operate Single-Tenant 20,000 Sq-Ft ++ Entry at 2.0 to 3.0 MW Long Term Asset Low Unit Cost Control / Security Capital Commit Inflexibile Difficult to Scale Wholesale Turn-Key Wholesale Colocation 2,000 to 20,000 Sq-Ft Ideal for up to 3.0 MW 8 to 15 Year Leases Scale Benefits w/out Scale Some Dedicated / Control Long-Term Lease Inflexible Difficult to Scale Retail Colocation Colocation by the Rack 20 to 200 Sq-Ft Average of 20 to 40KW Flexibility is Key Feature One to Three Yr Term Typical 2x to 3x Cost Up to $700/KW Moving Target Hybrid Colocation Colocation by the Rack Colocation by the Room 200 to 20,000 Sq-Ft Max Flexibility Ret + Whlsl One to Eight Year Term Full Spectrum of Cost? strong weak Time-2-market Right-sized Quality Scale Unit Cost Build, Own & Operate Wholesale Turn-Key Retail Co-location Hybrid-Retail Colocation

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