Earnings season has already shown us one thing: there is no recession anywhere near the datacenter. First Equinix raised guidance last week, then yesterday both Savvis and Switch & Data reported revenues above expectations, and Switch & Data increased guidance as well. Growth rates for colocation seem to be at least 30% across the board, with no slowdown in sight.
It seems clear now that the various illnesses that plague our economy right now are not slowing down this sector. The rest of telecom also appears quite strong, with both AT&T and Verizon shrugging off the economy and posting good results, and Level 3 doing the same. That bodes well for the others, which report over the next week or two.
Particularly interesting, IMHO, will be the results of Internap and Cogent. Internap’s colocation business should do well, but they also have their CDN business where pricing is apparently stable with quickly growing traffic. A good quarter or two for that segment would do alot toward restoring their reputation. Cogent revamped its pricing structure during the quarter, an action which mathematically must change its growth projections – but whether up or down depends on the actual response to the pricing changes, and that’s what Cogent is likely going to talk about.
I would go out on a limb and speculate that the economy is forcing many families and individuals to stay home. Both working from home and entertainment (streaming video, music) are both on the rise due in some part to the slowing economy.
In the past year, I have begun telecommuting full time. I have video conferences daily with my employees who are spread across the country.
Personally, my family is trading our club membership for in-home workout equipment and movies out for a Netflix subscription. We’re trading our phones with slow data connections for iPhones.
Bottom line, for us a slowing economy is causing an increase in our bandwidth consumption.
Anthony, your message tracks very closely with Carol Wilson’s recent editorial:
http://telephonyonline.com/commentary/staff/telecom_seasonal_slowdown/
——