67 WALL STREET, New York - September 18, 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: DuPont Fabros Technology, Inc. (DFT)
In the following excerpt from the Data Hosting Centers and Data Storage Report, the CFO of DuPont Fabros discusses the outlook for his company for investors:
TWST: Why did you start operations in Northern Virginia?
Mr. Wetzel: Two reasons. One is the two cofounders of the company were both based in the D.C. area. They were dabbling in real estate in Northern Virginia. Right after the Internet was created, the government laid out cheap fiber in Northern Virginia - and go back to the AOL days and UniNet days and the MCI days, and it is one of the Internet fiber hubs. Fiber is very abundant in places like Northern Virginia. Fiber and cheap power are the two things that you want to have in data centers. So when you are looking at where to place a data center, you want to look at places with a lot of fiber and inexpensive power.
TWST: You said that the Internet continues to grow, so the demand for data centers continues to grow. How large is this market?
Mr. Wetzel: That's a tough question. Let's just take some big banks as an example. If Citibank (C), Bank of America (BAC) or Wells Fargo (WFC) decides to build their own data centers and not outsource to us, do we know about that demand they need? Probably not. The question is whether you want to own and house your own data, or whether you want to lease and have an outsourcing solution. Data center rooms are very expensive, and one thing that companies typically have a hard time turning out is the capacity, the needs. How much do I need and when do I need it? So if you think of Facebook (FB), for example, who started out less than 10 years ago, and their needs for data centers have exponentially grown.
Facebook believes in focusing on what they are good at, and they outsource their data centers because that is something they don't want to have to worry about. Most companies should look to outsource, but there are always companies and people inside companies who think they have to own and control everything, so the growth on the market it is a little bit fuzzy. If all enterprise companies were to outsource, the rules of supply and demand would be firmly in our favor, but there are still companies who are a little nervous. However, they are starting to try going to the cloud, which is data outsourcing. As more and more people use the cloud and become more and more comfortable with it, we expect to see a lot of other people moving to outsource data. We already are starting to see people getting more comfortable with this model and looking to outsource, but it is taking some time.
TWST: Is it accurate to say you lease only the building, not the equipment inside the building?
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.