Digital Realty (DLR) to Offer Access to Oracle EU Sovereign Cloud
Amid enterprises’ growing reliance on technology and acceleration in digital transformation strategies, Digital Realty DLR has announced that it will provide connectivity through Oracle Cloud Infrastructure (OCI) FastConnect to the recently launched Oracle EU Sovereign Cloud. The interconnection offering is brought about by DLR’s proprietary interconnection and orchestration solution — ServiceFabric™.
The move is expected to help customers establish secure and reliable connectivity to the Oracle EU Sovereign Cloud regions in Frankfurt and Madrid. They may also interconnect their Oracle EU Sovereign Cloud-based applications and workloads to other cloud platforms via Digital Realty.
DLR’s ServiceFabric™ solution extends access to Oracle EU Sovereign Cloud, situated entirely within the European Union, from more than 130 locations globally, offering customers the liberty to connect anywhere.
The Oracle EU Sovereign Cloud is designed to address the region’s evolving regulatory landscape, providing customers access to OCI's public cloud services alongside giving them additional control over their data privacy and sovereignty requirements. The services and capabilities of OCI's public cloud regions are offered with the same prices, support and service level agreements (SLAs) to run all workloads.
Per Harm Joosse, global head of strategy & business segments, service providers, Digital Realty, “As more organizations harness the power of the cloud, prioritizing data protection, reliability, latency and compliance become mission critical. With Oracle EU Sovereign Cloud, businesses can unlock the full potential of digital transformation while adhering to the highest standards of data protection and sovereignty. We're delighted to work with Oracle to drive demand for its new Oracle EU Sovereign Cloud and to enable our joint customers to seamlessly and securely interconnect to OCI FastConnect and other cloud platforms.”
This February, Digital Realty had enabled connectivity to an OCI FastConnect points-of-presence (PoP) in the newly launched Oracle Cloud Chicago Region. The new connectivity deployment in the company’s 350 E. Cermak Road data center benefited customers by offering a low-latency route into the Oracle Cloud Chicago Region.
Digital Realty presently has nine other OCI FastConnect PoPs globally, in addition to OCI FastConnect connectivity to Oracle EU Sovereign Cloud in Madrid, providing customers with low-latency, secure and high-performance connectivity. These include Amsterdam, Chicago, Frankfurt, Johannesburg, Los Angeles, London, Madrid, Marseille and Sao Paulo.
Data center infrastructure demand has remained robust globally amid strong demand drivers such as cloud computing, enterprise modernization and the rise in content streaming and social media usage. Also, emerging demand drivers like Artificial Intelligence (AI), the Internet of Things, edge computing and 5G technology are likely to have fueled the rise.
It is expected that growth in the AI, autonomous vehicle and virtual/augmented reality markets will gain pace over the next five to six years. This upbeat trend positions Digital Realty well for long-term growth.
The company recently expanded into the Italian market by acquiring land in Rome and commenced pre-development planning for a new colocation and connectivity hub. The move seems like a strategic fit as it further strengthens DLR’s position as the leading provider of digital infrastructure capacity in the Mediterranean region, a key gateway between Europe, Africa, the Middle East and Asia.
Shares of this Zacks Rank #3 (Hold) company have gained 22.1% in the past three months against the industry’s fall of 1.1%.
Nonetheless, given the industry's strong growth potential, intense competition from existing and new players could prompt competitors to resort to aggressive pricing policies, making DLR vulnerable to pricing pressure. Also, high interest rates pose a concern for the company.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower WELL, SBA Communications SBAC and Americold Realty Trust COLD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.54.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past week to $12.91.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 1.6% over the past month to $1.26.
Note: Anything related to earnings presented in this write-up represents fund from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
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Welltower Inc. (WELL) : Free Stock Analysis Report
