Will cloud giants really drive colos off a financial cliff?

Jim Chanos, the infamous short-seller who predicted Enron's downfall, has said he plans to short datacenter real-estate investment trusts (REIT). "This is our big short right now," Chanos told the Financial Times. "The story is that, although the cloud is growing, the cloud is their enemy, not their business. Value is accrued …

[Anonymous Coward]

The market vs IRL

It's almost never a good idea to mistake what is happening in the stock market for what is happening in the real world.

Chanos is probably right that datacenter REITs are a poor investment but not for the reasons he gives. For years datacenter REITs were known (and bought) as a high income safe investment. But with interest rates rising that probably won't continue.

But I see nothing that indicates that datacenters are collapsing. As the IDG reported, there is still increasing demand for them.

I am not a financial advisor but my personal advice is never short anything and never ever naked short anything. There are safer ways to bet against stocks.

[amanfromMars 1]

Friend or Foe, Frenemy and Saviour for Every Cloud has a Silver Lining ... so they say?

It is wise to consider and expect Clouds to be used by those who and/or that which is able, as if a Trojan horse ..... with one completely unaware of the surprises inside them fully prepared and capable of laying waste to all that they perceive and witness with the fielding and wielding of the Tropes of CHAOS ..... Clouds Hosting Advanced Operating Systems ...... which would certainly be uncommon and even quite alien to many more than just an elitist chosen few.

Although one does have to concede, the creation and pimping/pumping and dumping/administration of conflict and chaos, appears to be a present day default current drivering executive office managements beyond the brinks of exhaustion and towards events verging on the edge of madness which invite extinction ...... so possibly nothing really new, although whenever in different command and control hands/hearts and minds, something quite different to beware and be aware of, and to be worried and probably also rightly terrified of and petrified by, given what can be so very easily done nowadays with practically nothing to show and share about from where or how such things are so simply done. ..... and who or what would be doing them and to what ultimate vested interest end.

[amanfromMars 1]

MRDA*, and calls IT and AI Out, to Play Greater IntelAIgent Games for a Necessary Vital Change

Methinks Advanced Augmented Alien Operating Systems utilising Cloudy Communication Channels and Fluffy AI Services are perfectly suited and booted and rooted to entertain and empower the likes of His Royal Highness Turki bin Faisal al-Saud, Chairman of the King Faisal Center for Research and Islamic Studies, with the virtually immediate delivery of overdue solutions to persistently chaotic problems seeding and feeding madness and mayhem/conflict and catastrophic activity

Now that is, and you be hereby well warned and adequately advised, a long position to short for profit at every available future opportunity. I Kid U Not.

* Mandy Rice-Davies Applies

[F0ulRaven]

Cloud is going to be growing for at least the next 5 years - its when that growth stops that the problems with start for these smaller datacentres.

AWS and Azure are only going to be turning on their partners when the goal moves from growing the market, to gaining market share.

[Doctor Syntax]

The thing about bets - you win some, you lose some.

Past performance is no indicator of future returns. Etc.

[Henry Wertz 1]

Capacity problems

He may be right, but then I'm reading contemporary articles about (for example) Azure stopping signups in regions and stopping demos in others due to capacity problems. It'll certainly have an effect on data centers emptying out in favor of cloud computing if companies find they cannot even receive the services they would want to buy to do so. It's worth pointing out, cloud is not magic, if the cost of servers, RAM, and storage go up for people buying equipment for their datacenters.... Amazon, Microsoft, and Google will see higher prices too, inevitably they would then raise prices on their services; all 3 do have the cash to get into a price war and run these services at a loss fairly indefinitely but I don't see any of them being willing to do so for long.

[Lusty]

Re: Capacity problems

“Azure stopping signups in regions and stopping demos in others due to capacity problems”

And who do you think is higher on AMD and Intels priority list to buy new capacity? It’s probably the partner buying chips by the ship load. Azure and AWS do have capacity issues but at least they’re able to get new capacity as fast as it’s manufactured!

[Owt for Nowt]

Selling Shovels in the New Gold Rush

What these finance guys don't see is that the likes of Equinix and Digital Realty are hosting some of the big cloud vendors so they are riding on the coat tails of this growth and providing the key connectivity between distributed sites and customers.

[philstubbington]

The history of tech has often shown your best year ever is followed by your worst - so the statement that business has never been better is worrying.

[Anonymous Coward]

Daft question - what is a colo? (Sort of guess in context of the article, but never hear that expression before) And how did it get that name?