SBA Investigating Mobile Edge Computing Space

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As it considers entering the data center industry, SBA Communications last month purchased New Continuum Data Centers, which has a flagship data center is located in west Chicago and a fiber loop.

“It’s a great facility. It was built for an agency of the United States Government. Built like a vault. It was poorly run from a sales perspective, so we were able to buy it for a fraction of the replacement cost,” Jeffrey Stoops, SBA president and CEO, told the Goldman Sachs 28th Annual Communacopia Conference this week in New York City. “We are going to use it as an R&D facility, so that we can understand how it all works. The data center has a mix of wholesale and retail, fiber and interconnect, which we are going to experiment with and learn from.”

New Continuum began leasing the property in west Chicago in the fall of 2013 when it commenced a redevelopment project for the building. Leveraging the rich infrastructure of the existing facility, the company began operating a multi-tenant data center on the premises in 2015 when the initial construction was completed, and then added cooling capacity in the summer of 2018. In January of this year New Continuum purchased the real estate.

Stoops said the tower company wants to be prepared when the mobile edge computing industry matures. “With 16,000 cell sites across the country, SBA would be well positioned to meet the demand to host compute power at its sites when the demand develops for it,” he said.

As SBA looks mobile edge computing, it will investigate the different roles it could assume. It could simply be a landlord renting space for the equipment; it could own the hard assets and let someone else manage, market and service them; or it could own operate and run the mini-data center.

Whether SBA will take the leap into edge computing will depend, in part, on whether it can achieve and maintain a degree of exclusivity and control.

“Over the test of time, we want an investment that will always be attractive, and it will withstand contract renewal cycles so that we will always feel good about the position we are going to be in”, Stoops said.

Diversification in the Works Second Half 2018

The announcement wasn’t a complete surprise. During its third quarter 2018 earnings call, Stoops announced that the company was branching out beyond tower portfolios into DAS, Wi-Fi and CBRS solutions, as well as data centers.

“In addition to tower portfolio growth, we are excited about our prospects and some of our recent success associated with investments we are making in other strategic real estate,” Stoops said.

Packet, a bare metal automation platform for developers, began collaborating with SBA to create an operational edge data center model with direct wireless connectivity in November 2018. Customer availability began at the end of 2018 at the edge data center located at an SBA cell tower site in Foxborough, Massachusetts.

“We are excited to partner with Packet to bring the power of edge computing to our tower site in Foxborough, the first of what we expect will be many sites in our extensive portfolio to become distributed network connectivity points for emerging 5G and edge computing applications,” Clay Moran, director of strategy at SBA, said.

SBA Deal in Line With Tower Industry’s Entry into Data Centers

In April of this year, American Tower purchased Atlanta-based Colo Atl, a provider of enterprise and carrier-neutral colocation, interconnection and data center services. Begun in 2001, the company’s colocation and Meet Me Room (MMR) space spans 1,470 square feet on the 5th Floor and 16,034 square feet on the 8th Floor in a carrier hotel, 55 Marietta Street.

The carrier-neutral collocation space was developed to allow tenants to cross-connect within the space, allowing companies to establish a presence to network with other carriers within the building.

But cell tower involved in mobile edge computing can be traced back to 2017 when Crown Castle International invested in Vapor IO, which had a plan to build a network of distributed edge data centers at the bases of thousands of cell towers.

In April of this year, Vapor IO and Crown Castle International jointly developed a service that seamlessly interconnects Vapor IO’s Kinetic Edge with Amazon Web Services via Crown Castle’s high-speed Cloud Connect. The product enabled a new class of mobile and wireless edge applications that span from edge to core.

Digital Bridge Leads Way into Data Centers

Digital Bridge, the owner of Vertical Bridge, has been on the leading edge of investing in the data center industry. In 2017, along with Public Sector Pension Investment Board and TIAA Investments, Digital Bridge purchased Vantage Data Centers, a hyper-scale data center operator whose customer base includes cloud service providers and large enterprises. Vantage has four data centers on the flagship Santa Clara, California, campus, two more under construction, and a second large-scale campus under development.

Digital Bridge first entered into the enterprise-class data center business in 2016 when it acquired DataBank, a North American provider of enterprise-class data center solutions including collocation, managed services, as well as cloud and network services. DataBank, in turn, acquired the network-neutral data center facilities of 365 Data Centers in January 2017, which included interconnection assets.

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