In this edition of Voices of the Industry, Raul Martynek, CEO at DataBank, refines the definition of edge computing. This is the first of a three-part series looking at the edge from the multiple perspectives of enterprises using and driving edge development: hyperscalers, SaaS application/ content developers, and network providers. In this article, we examine how hyperscale cloud providers see the edge and the role they are playing in its development.
The IT Pendulum Swings Back…Again
Since the dawn of the computing age, IT infrastructures have swung back and forth between centralized and decentralized formats. The industry first went from centralized mainframes to distributed client/server networks. The cloud then brought us back to centralized computing, and now we are decentralizing once again as edge computing takes over to put compute resources closer to end users.
Just as early computing pioneers such as IBM and Digital Equipment (DEC) drove the initial shift from centralized mainframes to decentralized PCs, so, too, are today’s hyperscale providers driving the shift from centralized clouds to decentralized edge computing. This creates a very different view of the edge.
No Longer Just One Edge: It’s Now Ubiquitous
Driven by the arrival of 5G networks and the promise of IoT and virtual reality applications, the popular conception of the edge that has taken hold is one of modular, micro data centers sitting at the base of cell towers to speed the delivery of content and application data by being “one hop away” from end user devices (i.e., cell phones). However, the truth is, the edge is developing in a much more ubiquitous and multi-modal manner.
In one sense, the edge is geography-specific and will exist everywhere from large tier 1 cities to rural markets. Most video, SaaS, and e-commerce applications will continue to be adequately served by data centers, cloud platforms, and CDNs in tier 1 and 2 metros that deliver 25-75-ms of latency to users hundreds of miles away. The edge is also application-specific, with infrastructure configurations that vary from business to business. A hyperscale or technology provider may need several thousand square feet of data center space and several MW of power, whereas a network or CDN operator may require only a few cabinets or small cage of capacity. Finally, there’s another element of the edge that is performance- and latency-specific. Emerging IoT applications may need sub 10ms latency times, only capable by locating infrastructure within a few miles of end users. It can also be located in highly specific geographic locations, for example, industrial or logistics hubs.
The Role of Hyperscalers in Developing the Edge
While it will take time for the edge to fully develop in all these varying forms, today it’s being driven not by next-generation IoT or virtual reality applications but by hyperscale cloud providers and the customers that fuel their growth. When we speak of AWS, Google, or Microsoft, we sometimes forget they are not just three companies, but, in reality, they are platforms supporting the requirements of millions of discrete customers who have a wide range of problems they look to hyperscalers to solve. For SaaS, content companies, and creators of other digital assets, that means delivering bits to as many smartphones, tablets, desktops, and network appliances as possible. Since the volume of those items exists in direct correlation to where populations exist, it’s no wonder hyperscale providers are building availability zones in more population centers. AWS has announced “Local Zones” in four markets, while Microsoft has announced plans for Azure Edge zones in three initial markets, all major metros. The hyperscale edge is happening TODAY, in tier 1 and tier 2 markets, not at the base of a remote cell tower. Hyperscale cloud computing providers are extending their footprint to the edge to reduce latency for distributed workloads. That’s because those cities and their surrounding areas are where most of the consumers of digital content are physically located. Hyperscale cloud providers are investing in edge-to-cloud connectivity to reduce the latency gap between cloud cores and end users. This is reminiscent of that famous quote by the notorious bank robber, Willie Sutton, who, when asked why he robbed banks, replied, “That’s where the money is.”
At DataBank, we call this environment the near edge or the middle edge. It creates a distinct layer from the far edge as defined by micro data centers beneath 5G towers and in rural settings, and it’s where the edge is developing first.
The Hyperscaler Edge Strategy
It is clear that hyperscale providers and the customers they support are moving away from just a handful of regional availability zones to deliver their digital services to a much larger number of locations, perhaps as many as 25-30, over the next five to ten years. What is not yet clear is what applications and use cases will require such a highly geographic distributed footprint and how application developers and content producers will manage, scale, and make geographic resource allocation decisions in such a fragmented construct.
Regardless, as the cloud and technology providers transition to a local-zone edge strategy, they will look to solve three logistical challenges:
1. Metro Diversity - Just as hyperscalers built their initial regional availability zones in tripod groups of three for resiliency, they will look to do the same in the metro or local availability zones into which they expand. This requires a minimum of three data centers in each market and requires a different kind of data center partner, one with multiple facilities in a metro, as opposed to the single-location wholesale data centers hyperscalers have traditionally turned to.
2. Network Connectivity – Local availability zones also need access to ample fiber networks and carrier-neutral interconnection hubs in order to connect the nodes in that metro to one another, but also to link the local zone to those in other regions. Hyperscalers will seek to locate their local zones in metros that have a diversity of neutral interconnect hubs and fiber paths in and out of the metro. You can expect hyperscalers to gravitate toward data center providers with beachfront property for these key pieces of infrastructure.
3. Speed to Market – To meet demand, Hyperscalers have traditionally relied on a mix of building their own facilities and using wholesale data center partners. However, this approach isn’t quick or cost-effective for local zone deployments needing only 1-5MW of power. Therefore, existing enterprise data centers with meaningful capacity in tier 1 and tier 2 metros will provide an attractive third option.
The Smart Approach to Designing the Hyperscale Edge
To solve these challenges, cloud providers can turn to enterprise multi-tenant data center (MTDC) providers, like DataBank, which offer the perfect solution for this hyperscale edge. The leading providers operate more than one facility in each market that spans from downtown areas to suburban locations.
This allows hyperscalers to mimic their nationwide three-node availability zone model within a metro and provide redundancy, at the same time moving infrastructure far closer to end users. By deploying across a footprint of tier 1 and tier 2 market facilities, like DataBank’s, services can be delivered to within 50 miles of half the US population.
MTDCs also own and operate secondary interconnect hubs in tier-two markets. These facilities attract additional network providers and create new fiber routes in and out of these metros, which creates more connectivity reach akin to tier 1 markets.
Hyperscale cloud providers will also find MTDCs are efficient at building and scaling facilities using smart design templates. This makes it possible to quickly bring new capacity online by deploying data halls in existing facilities or entirely new facilities on adjacent property. MTDCs can also design with a higher density of power for use cases where 52U cabinets with 100kW are required to generate more compute per square foot.
Speed Determined by the Slowest Component
Looking beyond the regional data centers, hyperscalers also need to consider the capabilities of their wireless and fiber networks, which are both essential to the edge fabric. As the pioneer computing architect Gene Amdahl once observed in his famous law, the speed of a system is determined by its slowest component.
That’s why it’s critical for hyperscale edges to integrate with dark-fiber interconnects. This extends IT services through carrier internet exchange points and provides access to cloud on-ramps. With this access, enterprises can quickly tap into partner networks that cloud platform providers, carriers, and enterprise application vendors offer within each region.
We’ll explore that interconnect edge in the next article.
This article was written by Raul Martynek, CEO, DataBank. Mr. Martynek joined DataBank in June of 2017 as the CEO and is a 20+ year veteran in the telecom and Internet infrastructure sector, having held senior positions at several communications and networking companies, as well as asset management firms. Raul earned a BA in Political Science from Binghamton University and received a master’s degree in International Affairs from Columbia University.
In part two of our series, “How Web 3.0 Will Forever Change Your IT infrastructure,” we explored how software is fundamentally reshaping IT infrastructure and transforming the experience of managing it. In this third and final installment, we look at the other major evolution Web 3.0 is driving within IT infrastructure: a move to the “edge.”
Over the last few years, the edge has become the most talked-about aspect of IT infrastructure, largely driven by the arrival of the first 5G networks. As a result, the vision of the edge that has predominantly taken hold is one of small, modular data centers—sitting at the base of cell towers to speed the delivery of content and application data by being “one hop away” from end user devices (i.e. cell phones). This is a misleading over-simplification.
The reality is more complex, akin to The Blind Men and the Elephant fable. It is now clear that the edge means something very different, depending on one’s perspective.
The Edge: Driven by Geographic, Application, and Latency Requirements
In one sense, the edge is geography-specific. Today, much of the Internet’s content is still centralized in data centers located in tier 1 and 2 metros. Emerging IoT applications and sensors may someday create the need for an edge that can support compute and storage in remote locations, but it’s just as likely the edge will continue to be built out in large cities as well. This is the edge that is actually getting the most traction today, as hyperscalers, like AWS, establish their first forays into the edge in large metros such as Los Angeles. This makes perfect sense and follows the simple logic of the famous bank robber Willie Sutton, who when asked why he robbed banks, replied, “Because that’s where the money is.” Large metros are still where the majority of users and data are located.
In another sense, the edge is application-specific, and the configuration of its infrastructure varies accordingly. The edge for a hyperscaler that’s building a new availability zone in a tier 2 metro requires several thousand square feet of space and several MW of power, but this doesn’t warrant building a dedicated facility.
Instead, an existing, multi-tenant data center (MTDC), like DataBank’s, provides the ideal solution. For a network provider looking to deploy new 5G towers—or extend an undersea cable landing further inland—the edge may require far less space and power. It also might be in a unique location where no data center is available. In that case, a modular, micro-data center —with half-cabinets and kWs of power is the perfect option.
There is also an element of the edge that is performance/latency-specific. For instance, video and e-commerce applications may continue to be adequately served by data centers, cloud platforms, and CDNs in the tier 1 and 2 metros where they exist today. Those applications perform fine even with the 15-100ms of latency that occurs between a user and a server hundreds of miles away.
However, augmented reality or gaming applications that require sub 15ms response times may need to reside far closer to end users. Here again, that could be a modular solution in one geography or a large MTDC in another.
A Ubiquitous, Multi-Modal Edge in Three Platforms
This is why, at DataBank, we think of the edge as ubiquitous—everywhere and multi-modal—existing in different forms, depending on the business and application it’s supporting. Our notion of a Digital Asset Allocation strategy is rooted in the idea of helping IT leaders ensure their applications and data are deployed on the right platform, at the right edge, at the right time, and for the right audience. To support this strategy, we developed three specific edge platforms:
Our Hyperscale Edge provides a geographic footprint ideal for webscale cloud, content, and compute resource providers seeking to build or expand their availability zones in tier 1 and 2 metros. This will establish their edge for the next 10-15 years. DataBank’s 60 data centers in the U.S. are spread across 25 tier 1 and 2 metros, putting our entire U.S. portfolio within 50 miles of half the U.S. population, providing best-in-class reach and scalability. DataBank typically deploys multiple facilities within a metro, and many of them (our legacy zColo sites) are integrated with Zayo Networks fiber. This means hyperscale customers can build multi-node availability zones in a metro with uncongested access to long-haul networks that connect to other availability zones.
Our Interconnect Edge gives network providers, SaaS developers, and enterprises seeking a hybrid IT strategy the open and neutral-access interconnections their applications demand. DataBank maintains 20 major interconnect locations in 13 markets that support over 30,000 cross connects. These include some of the most notable carrier hotels such as 1 Wilshire in Los Angles, 111 8th Avenue, and 60 Hudson in New York City, 1950 North Stemmons in Dallas, and 1500 Champa in Denver. These interconnect hubs and our multi-node cloud on-ramps provide unfettered access to dozens of cloud platforms, hundreds of carriers, and thousands of miles of fiber. Also, with new advancements in our portal, customers have software-defined control of this ecosystem, allowing them to tap into any cloud platform provider, carrier, or enterprise application partner quickly.
Our Low-Latency Edge meets the demands of customers who need to support extremely latency-sensitive or geography-specific applications. DataBank utilizes modular, micro-data center platforms, which provides fully secure, SOC-2 certified containers with redundant 48kW power sources, 300+ square feet of raised floor capacity, 10 racks (or 20 half racks), and four 5-ton cooling units. These can be deployed virtually anywhere in a matter of days or weeks, rather than months, and they tether to existing DataBank facilities. This allows applications and interconnections to be established beneath 5G cell towers, at cable head-ends, or anywhere an application needs to be put, and as close to user populations as necessary for minimal latency.
DataBank Corners the Edge
With these three edge platforms, DataBank is poised to help any company meet the edge demands they have today and tomorrow, regardless of application or location. We don’t stop there, though. Our Data Center Evolved model provides all the options you need to make sure your infrastructure at the edge is managed, secure, and compliant. In addition, our Customer Portal gives you all the visibility and control you want to make sure your applications are on the right infrastructure, at the right time, in the right place, and for the right audiences.
In the first article of our three-part series on “How Web 3.0 Will Forever Change Your IT infrastructure,” we noted that one of the major transformations taking place is that infrastructure will become more agile and software-driven. In this post, we want to take a closer look at that trend and how it will fundamentally change the experience IT leaders will have as they plan and manage their IT infrastructure. But first, a bit of history.
Infrastructure Becomes Code
Software-defined networking (SDN) first emerged in the early 2010s as a way to make IP networks more flexible by centralizing the intelligence and control of an inherently decentralized system. Initial SDN platforms focused on wide-area networks (WAN) and provided a mechanism to abstract or separate the forwarding process of network packets (the “data plane”) from the routing process (the “control plane”).
At the same time, perhaps, not unsurprisingly, a similar process was taking place in the world of computers, as memory, processing, and storage became abstracted in initial virtual machine platforms such as VMware. In both cases, software was the driving factor. More recently, this virtualization or software-enablement process has begun to take place in the data center itself. As the use of public cloud platforms has grown, IT infrastructure managers have grown accustomed to automation and the control it enables of the connections between workloads. Cloud on-ramps have emerged, allowing managers to provision connections to and from their infrastructure in data centers and multiple clouds platforms. As multi-tenant data centers like DataBank have increasingly become neutral network interconnection hubs, data center operators have upgraded their portals to allow customers to order and provision virtual cross-connects between customers, workloads, clouds, data sources, and applications. Again, software is at the heart of it all, increasingly transforming infrastructure into code.
“Infrastructure as Legos™” vs “Infrastructure as Minecraft™”
We’re just beginning to understand the full implications of this change, but it’s clearly going to result in an inherently different user experience for IT managers. In particular, our awareness and perception of individual infrastructure components is, likely, changing. Rather than having to think about the many discreet, finite infrastructure elements involved from multiple providers – servers, storage arrays, data centers, network ports, and devices – infrastructure managers will begin to look at them as one giant pool of programmable resources they can plug into (or out of) on-demand, and manipulate from a single pane of glass or even the palm of their hand.
This has already happened in the public cloud where applications may be running on many different virtual machines, but the infrastructure manager does not care exactly which servers or where they are located. As far as the infrastructure manager is concerned, a virtual server has been spun up to run the workload and, if the capacity of virtual server is exceeded, it can burst out to another.
Similarly, in the data center, a software-defined platform will let users or network operators create connections without awareness of the specific switches or routers involved. One network port can quickly be reconfigured to connect to a different network port, and the bandwidth for those connections could be increased or decreased as needed, limited only by the physical port size.
For anyone old enough to have teenage kids, it’s not unlike the evolution in how we built with Legos and how they build with Minecraft. With Legos, our imagination was limited by the discreet, physical blocks we had scattered across the floor. With Minecraft, our kids have a virtually unlimited ability to create anything and even program new building blocks as they see fit. And there are no sharp pieces of plastic for parents to step on.
Paving the Way to a Better Experience
Not only will the experience be different, for IT managers, it will be better.
In shifting from a telco-centric model of infrastructure to a software-centric model of infrastructure, a number of things happen. Formerly fixed and centralized facilities like data centers and interconnects become more distributed and flexible. Physical connections and cross-connects become more virtual. The slow, manual provisioning and changes to networks become instant and programmable. Instead of the service providers managing everything, IT managers can self-administer their infrastructure.
Looking further into the future, it’s possible we might see human intervention removed entirely. For instance, applications may be self-aware enough to diagnose the need for additional connectivity, engage the network through APIs and establish additional bandwidth or connections on their own.
Where managing infrastructure used to be difficult, time-consuming, and expensive, a software-centric model virtually eliminates all of these challenges and delivers an experience that can be managed from a single app.
Such an experience will lead to real business benefits:
1. Greater Agility: IT leaders will be able to better adjust and align their infrastructure with the demands of their applications in real-time, eliminating the need to overbuild capacity.
2. More Efficiency: Organizations will be able to automate provisioning and management efforts and reduce the burden on existing IT staff.
3. Improve Scale: IT infrastructure will be better able to scale to meet the demands of new applications at the edge and to improve overall reach to partners, service providers, and systems.
The next implication of Web 3.0: The ubiquitous edge
The combination of software-centric assets and architecture is already changing the way IT leaders deploy and manage their infrastructure. Yet, it will change even more as their strategies move to the edge—a topic we’ll examine in our next article. We hope you’ll stay tuned to check it out.
Digital business transformation initiatives first launched across many industries just over 10 years ago, so many businesses today are marking over a decade of transformation. It’s encouraging that, on balance, companies continue to build momentum on their digital journeys. According to Ernst & Young research, today almost half (44 percent) of corporations said they are making good progress with their transformation plans – accelerating across a steep transformation maturity curve.
As enterprises digitize their operations, their underlying IT infrastructure needs to transform as well: becoming more agile, scalable, transparent, and software-driven. DataBank provides a variety of IT infrastructure services that help customers on the digital transformation journey. By combining edge data centers, interconnection hubs, managed security, and cloud platforms we give IT decision-makers the ability to meet the challenges of this journey and create a limitless digital future.
In addition, DataBank is an important cornerstone in an even larger ecosystem – the Digital Colony portfolio. As one of the largest digital infrastructure REITs in the world, Digital Colony maintains broad visibility across the entire digital landscape and provides a range of benefits for DataBank and our customers.
An Unmatched Combination of Digital and Real Estate Expertise
Digital Colony is a leading global investment firm dedicated to digital infrastructure. With a heritage of over 25 years investing in and operating businesses across the digital ecosystem including towers, data centers, fiber, and small cells, the firm manages a $30 billion portfolio of digital infrastructure assets on behalf of its shareholders and partners. It is a dedicated team of nearly 100 professionals focused exclusively on digital infrastructure and the opportunities for growth across the sector.
The founding principle behind Digital Colony that continues to inform its investing philosophy is its operator-led approach, partnering with best-in-class management teams to build and support their continued growth. The Digital Colony playbook is rooted in decades of experience operating companies that own and manage real assets with mission-critical applications.
Digital Colony focuses on generating attractive risk-adjusted returns and creating long-term value for shareholders and investors through its significant global scale and operating platform, strategic M&A capabilities, and access to institutional capital markets.
Digital Colony’s reach is global and its teams are local, which is mirrored in DataBank’s approach. In both companies, seasoned veterans provide access to compelling real estate and data center insights, understanding risk and navigating changing market climates.
A Vibrant Ecosystem with an End-to-End Perspective
Digital Colony’s portfolio holdings, companies that fuel connectivity and innovation, are centered around four primary segments of the digital infrastructure landscape:
• Tower Assets that provide comprehensive network coverage and capacity
• Fiber Assets that form the connective tissue binding networks together
• Small Cell Assets that enable network densification in high-demand areas
• Data Center Assets that provide the secure facilities for the growing compute and storage demands of applications and data
As part of this dynamic ecosystem, DataBank has visibility into the trends and developments that are shaping the future of the edge and IT infrastructure, and we’re able to tap into the expertise and capabilities of fellow portfolio companies like Zayo, Extenet, Vantage and Vertical Bridge to address the needs of customers in ways other data center providers cannot.
Financial Stability and the Power to Scale
Providing IT infrastructure at the scale that DataBank does requires a tremendous amount of capital, and being part of the Digital Colony portfolio ensures we can attract the resources necessary to finance the long-term growth and stability on which our customers depend. Digital Colony’s backing has been instrumental in two recent watershed events in the history of DataBank and the data center industry.
The first was our $1.4 billion acquisition of zColo, the data center assets of Zayo Group Holdings, which dramatically expanded DataBank’s footprint to 65 data centers and 20 major interconnect hubs in 29 metro markets. This positions us as a leading-edge colocation and interconnect platform.
The second was our recent issuance of $658 million of secured notes, DataBank’s first securitization and the first ever for a multi-tenant, enterprise-focused data center provider.
The new securitization reduces our financing costs by more than 50 percent, allowing us to invest more in data center capacity and the services our customers want, while providing a powerful launchpad upon which we can initiate future transactions.
A Greener Digital Transformation Journey
Being part of the Digital Colony ecosystem also helps DataBank and our customers ensure that their digital transformation journey is a greener and more responsible one as well.
Digital Colony recognizes the tremendous social and environmental impact and potential of the IT infrastructure industry and has established itself as a leader in Environmental, Social and Corporate Governance (ESG) principles . The company has actively integrated ESG into its investment process, and set goals and targets to be implemented by employees, affiliates, vendors and suppliers. Most recently, Digital Colony has committed to a bold Net Zero 2030 initiative, targeting zero greenhouse gas emissions across its entire digital ecosystem well ahead of its peers. These goals are aligned with The Science Based Target Initiative (SBTi), a leading partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Initiative (WRI) and the World Wide Fund for Nature (WWF), and they are focused on reducing, re-sourcing, and removing emissions across the value chain. In doing so, Digital Colony has set the pace for its portfolio companies, and DataBank and others have followed suit.
From a liquid-cooled supercomputer customer in Georgia to greener backup systems, DataBank has developed a keen awareness of the impact that data centers and the entire digital ecosystem are having on the environment. We have continuously adapted facilities and operations to enhance environmental responsibility. Most recently, DataBank announced two of its Indianapolis and Minneapolis data centers were the first to be 100 percent powered by renewable sources, helping customers in those facilities meet their own ESG goals.
Looking toward the next digital decade, technologies like 5G and IoT will create a data deluge that compels enterprises further transform their IT infrastructures. DataBank and its customers can look ahead to those future transformations, confident in the knowledge that they are benefiting from the broad digital perspective, innovative thinking, robust capital, and sustainable approach that comes from being part of the Digital Colony ecosystem.
