More Digital Reality implications - An Analysts View

Quotes from Digital Reality strategic communications recently with possible implications according to Morgans ... using some of their research notes

The future of the internet according to DLR. Last week Digital Realty announced a couple of major strategic refinements. The most important one for MP1 is the launch of DLR's "market place live". In short, DLR wants to be the big data source and link everything together using Megaport. Megaport's independence allows them to be in many competing data centre or edge sites at once and to help DLR collect of this data into centralised repositories (also know as big data lakes).

The Morgans' analysts interpretation of DLR's strategy is:1) DLR know that data is going to be collected from thousands of locations (not just inside hyperscale &/or colocation DC's); 2) Rapid interpretation of data needs to be made at remote sites (collected and processed at the edge e.g. turn left now so you don't crash); however 3) Data collected at the edge still needs to be overlayed or merged with data from other sources in a centralised location (e.g. we did fifty separate car trips to the same location last week maybe we should use a truck and do less trips) 4) DLR want to be that centralised source of big data storage and processing. To do this they need to promote the flow of data from the edge and all things connected back to DLR's DC's (DLR once called this being the data lakes).

DLR want to use MP1 to facilitate that flow of data.

Quotes from Digital Reality. We think this explains DLR' positioning in the years ahead and it's good for Megaport which is a critical part of one of DLR's four pillars. Here's what DLR's Senior VP for platform and ecosystem strategy (the person making these changes) had to say about it. It’s a strategic shift from being “campus and asset-centric” to interconnecting the entire platform globally. Computing is getting distributed, and enterprises going through digital transformation are finding themselves in need of infrastructure in more places than ever before. They need wide geographic reach both to serve their employees and customers and to ingest data from the ballooning number of connected devices. Using Digital partner Megaport’s software-defined interconnection platform, customers can also provision virtual links between their networks within the campuses. As part of the new platform push, Digital is planning to interconnect its campuses globally, to make it easier for companies to link with their partners, service providers, or their own infrastructure in different places around the world. Digital has been aggressively expanding its retail colocation and interconnection business, mostly via acquisition (Telx in 2015 & Interxion last week). The interconnection bit is crucial to Digital’s current platform building exercise. It is what makes a data center a marketplace, while a global network of interconnection hubs makes the marketplace global.

Source of the above quotes. https://www.datacenterknowledge.com/digital-realty/digital-realty-charts-course-becoming-platform-company?NL=DCK-01&Issue=DCK-01_20191108_DCK-01_248&sfvc4enews=42&cl=article_1&utm_rid=CPNET000005734336&utm_campaign=20944&utm_medium=email&elq2=c6cdf01d8d024ba792a8d0159adccca4DLR's releasehttps://investor.digitalrealty.com/news-and-events/news/press-release-details/2019/Digital-Realty-Launches-PlatformDIGITAL-and-Unveils-Platform-Roadmap-to-Underpin-the-Next-Wave-of-Digital-Transformation/default.aspxInvestment view

- Morgan see the current weakness as a buying opportunity and the outlook for MP1 as bright as ever. They've increased their TP to $11.38. I am sure there will be naysayers who will point out Morgans were involved in a placement of MP1 some time ago... but look at this in terms of why they have so much potential and I get blown away. In my view the argument for MP1's future success is compelling