瑞信-美股-科技软件行业-数据中心：CAPRE亚特兰大-2019.8.14-37页.pdf

Data Centers CAPRE Atlanta Colocation Adoption AcceleratingColocation Adoption Accelerating DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.14 August 2019 Sami Badri Communications Equipment&Infrastructure Research Tel:+1(212)538-1727 ahmedsami.badricredit- Equity Research Americas Table of Contents&Critical Sector Questions Sami Badri|212-538-1727|ahmedsami.badricredit- I.Introduction Industry&Analyst Coverage II.Critical Question#1:What is the DC industrys strength currently?III.Credit Suisse CIO July 2019 Survey Results IV.Critical Question#2:Where are DC Valuations?V.Critical Question#3:Why is colocation adoption accelerating now?VI.Concluding Highlights VII.Appendix 2 Source:Credit Suisse Research 2019 Introduction Credit Suisse Research Coverage Model Sami Badri|212-538-1727|ahmedsami.badricredit- Companies Covered Research Core Focus Coverage Model Structured to Capture Entire Technology Sector Trends with Streamlined IT,Cloud,&Telecom Spending,with deep industry insight.Source:Credit Suisse Research.3 Responsibilities and Process Include:1)Core Objective:Conduct research on the broader technology and data center sectors using industry data,proprietary data,and financial models to make rating and valuation decisions for investors.2)Process:Includes heavy ingestion of industry data points from all adjacent industries(including real estate,industrials,utilities,broader tech.).3)Clients:Asset Managers,Private Equity,Venture Capital,Sovereign Wealth,Pension,and Hedge Funds seeking to deploy/invest capital.1)Ultimately:Trying to value publicly traded companies such as Equinix,Digital Realty,Cisco,Arista Networks,etc.,precisely.2019 Critical Question#1:How would you assess the data center industrys strength as of 2Q19?Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Assessing Industry Strength Key Industry and MTDC indicators:1)Hyperscale Capex Trajectory(Industry Data)2)MTDC Construction Trajectory(Industry Data)3)Cloud On-Ramp Trajectory(Industry Data)4)MTDC Revenue Growth 5)MTDC 2Q19 Utilization,ARPU,and Leasing Backlog 6)MTDC Interconnection Growth Source:Credit Suisse Research.Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Hyperscale CapexCAGR($millions)201720182019E2020E2021E2022E13-1818-22Alphabet13,184 25,139 24,472 25,043 25,989 27,015 27.9%1.8%Microsoft11,400 15,800 18,049 20,768 23,221 24,299 22.7%11.4%Amazon Web Services Only9,190 9,783 11,239 12,318 12,685 13,052 34.6%7.5%Facebook6,732 13,980 17,985 19,632 20,764 21,201 51.5%11.0%U.S.Total40,506 64,702 71,745 77,761 82,660 85,567 30.6%7.2%Y/Y Change33.2%59.7%10.9%8.4%6.3%3.5%Tencent4,736 8,170 5,645 6,718 8,090 6,805 52.5%-4.5%Alibaba4,114 4,818 8,451 10,489 12,584 8,832 64.6%16.4%Baidu2,064 3,379 1,823 2,076 2,309 2,223 41.3%-9.9%Chinese Total10,914 16,367 15,919 19,282 22,984 17,859 52.4%2.2%Y/Y Change76.6%50.0%-2.7%21.1%19.2%-22.3%Total HyperScale Capex51,420 81,069 87,664 97,043 105,643 103,427 33.7%6.3%Y/Y Change40.5%57.7%8.1%10.7%8.9%-2.1%of Revenue15.4%19.0%17.5%16.4%15.2%12.9%Source:Factset,Credit Suisse Research.Tencent,Alibaba,Baidu are Consensus Estimates.Hyperscale Capex Spend Growth Has Sharply Decelerated Going into 2019;Consumption of IT Capacity to AccelerateConsumption of IT Capacity to Accelerate Hyperscale Capex includes Capital Expenditure investments into office space,I.T.equipment,data center infrastructure,land,and other major ticket items.Amazon Web Services and Microsoft Capex figures include both Capex and Capital Leases.Sami Badri|212-538-1727|ahmedsami.badricredit- 11.3%5.6%10.1%7.0%6.0%0%2%4%6%8%10%12%-1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,0001H 2017FY 20171H 2018FY 20181H 2019 CS Est.Construction Intensity(%)MegaWattsMTDC Under Construction(MW)MTDC MW Total Inventory(MW)Under Construction/Total Inventory(MW,%Intensity)Source:JLL Research,Credit Suisse Research.MTDC Construction Intensity at 7.0%at the end of 2018 vs.5.6%Total Capacity at the end of 2017 Credit Suisse Estimate to 6%in 1H 2019Credit Suisse Estimate to 6%in 1H 2019 Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Source:JLL Research,Credit Suisse Research.0%10%20%30%40%50%60%AtlantaAustin and San AntonioBostonChicagoDallas/Fort WorthDenverHoustonLas Vegas&RenoLos AngelesMinneapolis&St.PaulNorthern New JerseyNew York CityNorthern CaliforniaNorthern VirginiaNorthwest U.S.PhoenixGreater Montreal AreaGreater Toronto AreaWestern CanadaAmsterdamDublinFrankfurtLondonParisAustraliaHong KongSingaporeNorth AmericaEuropeAPACMW Under Construction/Total MW Inventory(%)1H 2017FY 20171H 2018NoVA+34.4%Phoenix+55.7%Dallas/Fort Worth+8.3%Toronto+21.3%Las Vegas/Reno+9.6%MTDC Construction Spread Across Several DC Markets,Requiring Significant Cloud/Networks Interconnectivity Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 020406080100120140AWSGoogleCloudIBM Cloud MicrosoftAzureRackspaceOracleCloudAlibabaGroupVMwareNumber of Cloud On-Ramps(#)20172018YTD 2019Cloud On-Ramp Have Reached Critical Mass Deployment.Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Estimates,Cloudscene,Inflect,Company data.Biggest On-Ramp YTD 19 Increases:AMZN+18%Y/Y Increase GOOGL+61%Y/Y Increase IBM+33%Y/Y Increase MSFT+31%Y/Y Increase ORCL+69%Y/Y Increase BABA+29%Y/Y Increase 2019 050100150200250300350Number of On-Ramps(#)20172018YTD 2019SDN On-Ramps Have Also Scaled Dramatically.Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Estimates,Cloudscene,Company data.SDN On-Ramp YTD 19 Increases:Megaport+42%Y/Y Increase PacketFabric+1%Y/Y Increase 2019 Company Prior 4Q Average Y/Y Revenue Growth(2Q18-1Q19)2Q19 Y/Y Revenue Growth 2Q Q/Q Revenue Growth CS 2019E Y/Y Revenue Growth*+12.8%*+9.7%+1.6%+9.9%+18.8%*+6.1%-1.7%+6.9%+11.6%+4.7%-0.2%+5.9%+7.4%+9.2%+4.3%+10.1%+13.8%+14.2%+4.6%+14.7%+18.2%*+27.7%+11.8%+20.1%+13.4%+16.2%+5.7%+12.1%Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Company data,Credit Suisse Research.*Includes M&A Activity(Equinix-Numerous Acquisitions,Digital Realty-Ascenty,and CyrusOne-Zenium)MTDC Revenue Growth Has Varied Across Operators 2019 Company Operator DC Capacity Utilization*2Q19 Y/Y ARPU Growth*Backlog%of 2QAd Rent/Rev.*CS 2019E Y/Y Revenue Growth*80.8%-4.2%N/A+9.9%87.8%+2.3%5.0%+6.9%84.7%+5.2%8.7%+5.9%75.0%N/A 22.1%+10.1%78.6%-0.5%N/A+14.7%83.0%-0.9%2.7%+20.1%88.2%+1.3%17.1%+12.1%Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Company data,Credit Suisse Research.*Includes M&A Activity(Equinix-Numerous Acquisitions,Digital Realty-Ascenty,and CyrusOne-Zenium)MTDC Utilization,ARPU,and Leasing Backlog 2019 Company Prior 4Q Average Y/Y Intercon.Rev.Growth(2Q18-1Q19)*2Q19 Y/Y Intercon.Rev.Growth*2Q Q/Q Intercon.Rev.Growth*CS 2019E Y/Y Intercon.Rev.Growth+12.8%+10.8%+2.9%+9.7%+6.9%+4.0%-5.8%+7.6%+11.3%+7.8%+2.0%+8.5%+12.0%+6.1%-6.7%+6.9%+13.8%+14.2%+4.6%+14.7%+16.3%+19.8%+8.0%+18.8%+15.7%+15.0%+3.9%+15.0%Sami Badri|212-538-1727|ahmedsami.badricredit- MTDC Interconnection Growth Has Been Mixed Source:Company data,Credit Suisse Research.*Includes M&A Activity(Equinix-Numerous Acquisitions,Digital Realty-Ascenty,and CyrusOne-Zenium)2019 Credit Suisse CIO/IT Survey July 2019 vs.January 2019 Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 13%32%16%23%16%44%31%13%5%8%2,501-5,0005,001-10,00010,001-30,00030,001-50,000Above 50,000Size of OrganizationJuly 2019January 201949%29%15%7%CIOIT DirectorCTOIT ManagerJuly 2019Credit Suisse CIO/IT Survey July 2019 Results Sami Badri|212-538-1727|ahmedsami.badricredit- Survey Details:The Credit Suisse CIO Survey is administered semi-annually with a required minimum number of responders of 75 CIOs,IT Directors,CTOs,and IT Managers.July 2019 Survey Included IT Spenders from Larger Organizations versus January 2019 Version,Making Latest Survey Results More Representative of Industry Dynamics.Source:Credit Suisse Research CIO/IT Survey July 2019 2019 43%19%39%0%36%21%41%3%YesNoStill underconsiderationNeverJuly 2019January 2019Credit Suisse CIO/IT Survey QuestionQuestion:For your private cloud deployments within your hybrid clouds,will you be deploying your equipment into Colocation or outsourced wholesale data center facilities?Sami Badri|212-538-1727|ahmedsami.badricredit- IT Executives Have Expressed More Interest in Deploying into Colocation and Outsourced Data Center Infrastructures in July vs.January 2019.Source:Credit Suisse Research CIO/IT Survey July 2019 2019 Credit Suisse CIO/IT Survey QuestionQuestion:Are you using multiple public colocation and/or outsourced wholesale data center providers for your hybrid cloud?Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Research CIO/IT Survey July 2019 IT Executives want to use more than one colocation and/or outsourced provider,largely to have access to variations of services,locations,and cloud on-ramps.69%31%64%36%YesNoJuly 2019January 20192019 39%27%20%13%1%28%15%38%13%5%Yes,probably mostcapacity will beoutsourcedYes,shutting downfew data centersNo,no plans toshutdown our datacentersStill underconsiderationNever shutting downany of our owned andmanaged data centerfacilitiesJuly 2019January 2019Credit Suisse CIO/IT Survey QuestionQuestion:Will you eventually shutdown the majority of your owned data center infrastructure and outsource your data center needs through colocation providers?Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Research CIO/IT Survey July 2019 IT Executives want to shutdown their enterprise owned facilities and decisions are being made faster than Credit Suisse had anticipated after considering the shift in decisions from January(28%)vs.July(39%)will shutdown their data centers.2019 29%71%36%64%YesNoJuly 2019January 2019Credit Suisse CIO/IT Survey QuestionQuestion:Following the imposed tariffs,are you considering public cloud services more with less on-premise deployments given the change in costs?Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Research CIO/IT Survey July 2019 IT Executives want to use colocation for their deployments despite elevated expenses for IT equipment driven by overall economics of on-premise private clouds(it is still cheaper,enhanced with distributed private networks).2019 Critical Question#2:Where are data center valuations?Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 5.0 x7.0 x9.0 x11.0 x13.0 x15.0 x17.0 x19.0 x21.0 xAug-14Oct-14Dec-14Feb-15Apr-15Jun-15Aug-15Oct-15Dec-15Feb-16Apr-16Jun-16Aug-16Oct-16Dec-16Feb-17Apr-17Jun-17Aug-17Oct-17Dec-17Feb-18Apr-18Jun-18Aug-18Oct-18Dec-18Feb-19Apr-19Jun-19Aug-19CONECORDLREQIXINXNQTSAverageEV/FY2 EBITDA Sami Badri|212-538-1727|ahmedsami.badricredit- DC Sector Valuations Have Recently Expanded Near All-Time Highs.Source:Factset,Credit Suisse Research.EBITDA Multiples Have Recently Expanded Near All-time High Levels from 2018 Troughs.2019 Critical Question#3:Why has colocation adoption accelerated now,so suddenly?Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 94777647342111554220102030405060708090100#of PoPsYTD 2019Colocation Adoption Has Accelerated Driven by New SaaS Market Entries and Service Providers,In Addition to Cloud/SDN On-Ramp Deployments Sami Badri|212-538-1727|ahmedsami.badricredit- Enterprises Are Seeking Application Service Ecosystems,Formed by:CloudFlare,Cisco,Fastly,Salesforce,F5,and Palo Alto all deploying PoPs to win enterprise business.2019 Source:Credit Suisse Estimates,Cloudscene,Company data.Observation:Observation:But Not All Colocation Providers are Benefiting from Accelerated Colocation Adoption The Private Market DCs Arent Seeing the Same Traction,Partially Due to Service Provider Ecosystem Variety,Increased Churn,and Density Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Credit Suisse Research Public Data Centers Private Data Centers(50+Operators)2019 Concluding Highlights Enterprises remain in transition,adopting hybrid deployment models with colocation footprints.Cloud On-Ramps,SDN Providers,and now SaaS providers are key drivers behind accelerated colocation adoption in 2019,leveraging private network connections.Credit Suisse expects the colocation and data center outsourcing trend to continue and extend through 2021 as enterprise owned infrastructure is phased out.Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Questions&Answers Contact Information:Sami Badri+1 212 538 1727 ahmedsami.badricredit- Most Frequently Asked Questions When do you think private market DC Operators will begin seeing similar trends as the publicly traded operators?Will more SaaS companies emerge to accelerate enterprise colocation adoption?When do you think hyperscale Capex spending will reaccelerate?Source:Credit Suisse Research Sami Badri|212-538-1727|ahmedsami.badricredit- 2019 Appendix Sami Badri|212-538-1727|ahmedsami.badricredit- Introduction Credit Suisse Research Coverage Model Sami Badri|212-538-1727|ahmedsami.badricredit- Communications Equipment Communications Infrastructure Data Center Capex&Construction Trends Cloud Network Architecture Shifts Led by Equipment Affecting Capacity Needs Enterprise&Cloud IT Spend Customers Shared Coverage Model Structured to Capture Both Communications Sectors with Streamlined IT Spend,Cloud,&Telecom Visibility modeled across both sectors.Source:Credit Suisse Research.Telecom Spending Trends and Upgrades 29 Credit Suisse Communications Infrastructure Comp Sheet Sami Badri|212-538-1727|ahmedsami.badricredit- Source:Company data,Factset,Credit Suisse estimates.30 2019 31 Investment Risks Sami Badri|212-538-1727|ahmedsami.badricredit- We identify a number of investment risks in Data Center REITs(the companies)including the following:1.Technological Disruption:Currently,the market environment is pushing enterprises and I.T.customers to outsource and decentralize their I.T.operations(specifically workloads),and we acknowledge that this theme could flip,pushing companies back to insourcing their operations,decreasing demand for data center space.2.Data Center Space Demand&Supply:Space and power pricing have led to significant increases and decreases in lease pricing per square foot,which we believe is a risk,given some I.T.infrastructure operators may decide to flood the market with capacity in a speculative fashion,depressing market prices and challenging a data center REITs ability to deploy capital at the right returns on investment.3.Heav