67 WALL STREET, New York - September 21, 2012 - The Wall Street Transcript has just published its Data Hosting Centers and Data Storage Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Data Hosting Centers - Flash Memory - Cloud Computing Secular Trends - Internet Infrastructure Build - IT Consolidation Activity - Mobile Computing - Cybersecurity
Companies include: CoreSite Realty Corp. (COR) and many others.
In the following excerpt from the Data Hosting Centers and Data Storage Report, the CEO of CoreSite discusses the outlook for his company for investors.
TWST: Please give us a history and a basic overview of CoreSite.
Mr. Ray: CoreSite has its roots beginning about 13 years ago. Initially, we received our investing from The Carlyle Group. Over the years, Carlyle invested in more data centers, and CoreSite was created to manage all of those assets. About five years ago, Carlyle decided that the whole was worth more than the sum of the parts, as there were synergies between assets and customers and management, and we created an integrated operating company out of CoreSite. Two years ago, we took that public, and that's how we got where we are today.
TWST: Today, what is the relationship between The Carlyle Group and CoreSite?
Mr. Ray: Carlyle currently owns about 55% of CoreSite. Carlyle is a private equity firm, and the shares are held across three vintages of Carlyle Realty funds. Although we are not aware of Carlyle's plans with respect to its holdings, I think that the market has speculated, that over time, Carlyle will sell down its position.
TWST: Why is this a good time for data center REITs?
Mr. Ray: We have a couple of things going on. Number one, the fundamental demand drivers remain very healthy. The growth in Internet traffic and in the analysis and use of data continues to accelerate. So the growth trends that have fueled the industry to date are holding up or accelerating. So from a fundamental demand perspective, the future still appears to be very solid.
Additionally, the way that customers use data centers has been evolving in favor of the third-party, multitenant data center industry. More and more customers are outsourcing. That outsourcing comes in the form of a customer moving from an in-house enterprise data center to taking third-party data center space in order to reduce the cost of ownership, and because the third-party data centers offer a greater level of professionalism in building and managing the data centers, which are core competency issues.
But also you see applications being outsourced to cloud service providers and systems integrators. Those companies are aggregating former enterprise applications and choosing third-party data centers to house their applications for the same reasons the enterprise companies do. It's really a significant shift in information technology assets toward an outsourcing model, whether that be a direct data center outsourcing model or a service outsourcing model, such as cloud.
TWST: There used to be an idea that companies wanted to keep data on-site, that somehow it was safer or more secure if it was colocated with them. Does this new trend mean we are getting past that?
For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs , portfolio managers, and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- The Carlyle Group