A Wall Street Transcript Interview with Todd C. Weller, CFA, Managing Director with Stifel, Nicolaus & Co., Inc. Covering Data Centers, Managed/Cloud Hosting and Internet Security: Network-Dense Colocation's High Barriers to Entry Translate Into Better Outlook
67 WALL STREET, New York - February 19, 2014 - 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 - Data Center REITS - Colocation, Managed Hosting and Cloud Computing - International Enterprise and Consumer Demand - Mobile Computing - Infrastructure Upgrades and Consolidation Activity
Companies include: Digital Realty Trust Inc. (DLR), Equinix Inc. (EQIX), DuPont Fabros Technology, Inc. (DFT), Cortex Pharmaceuticals Inc. (COR), Rackspace Hosting, Inc (RAX), Amazon.com Inc. (AMZN), Salesforce.com (CRM), Iron Mountain Inc. (IRM), Microsoft Corporation (MSFT), Google Inc. (GOOG), VMware, Inc. (VMW), International Business Machine (IBM) and many others.
In the following excerpt from the Data Hosting Centers and Data Storage Report, an expert analyst discusses the outlook for the sector for investors:
TWST: Let's start with a snapshot of your coverage universe. In particular, we're focusing on the data center and data hosting related names.
Mr. Weller: On the data center side, we cover both the REITs and non-REITs, including Digital Realty Trust (DLR), Equinix (EQIX), DuPont Fabros (DFT), CoreSite (COR), QTS (QTS), InterXion (INXN) and 21Vianet (VNET), which is a Chinese-based data center company. And then on the hosting side, Rackspace (RAX). There are really no other public pure-play hosting companies; a lot of those have been consolidated by either telecom or larger tech companies.
TWST: How would you describe investor sentiment in the space right now, and what's driving that?
Mr. Weller: It's lukewarm to negative. I think if you look at last year, the sector underperformed. It was a very tough year for data center and hosting stocks. I think none of the stocks outperformed the broader markets, and there was only one of the data center REITs, CoreSite, that outperformed the REIT index, so a lot of underperformance.
I think there are several drivers for that. One is that in the wholesale or larger capacity segment of the market, where Digital plays, there's a persistence of concerns that started in 2012 around competition, supply and pricing. Then in the network-dense colocation segment, where companies like Equinix and InterXion play, those tend to be smaller capacity data center transactions, and also their capacity is differentiated by the amount of connectivity they have, and we saw a little bit of fundamental pressure in that segment.
I think a major factor was company-specific factors that came into play. Clearly Digital Realty...
For more of 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.
