Telecom Ramblings

Well, the financial markets may be in turmoil, and fears of a spillover into telecom an infrastructure may be rampant, but one sector seems still immune.  As the quarter closed, Digital Realty Trust pre-announced record leasing rates, both for square footage and revenue.  Can nothing dampen colocation sales these days?

Digital Realty bought various datacenter assets in the last few years, including several from Abovenet, and they have amassed a vast footprint in the US and Europe.  They mostly just lease space – finished or unfinished – in large chunks rather than bothering with racks and cabinets like Equinix or on down to full hosting like Savvis or Rackspace.   Looked at one way, they are simply a real estate company.  Looked at another, they are a substantial part of the base layer upon which much of the internet sits.

Based on their results, we ought to expect Equinix to continue its string of good results despite the economic turmoil.  We might also expect Savvis not to be at as much risk as they might otherwise be.  It is hard to envision the wholesale end of the datacenter business thriving for long unless the retail end is also.