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Digital Realty's New Platform to Aid Digital Transformation

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Digital Realty Trust, Inc. (DLR - Free Report) recently announced the launch of a global data-center platform — PlatformDIGITAL — aimed at helping customers scale digital businesses. The company also discussed at length about the strategy for creation of the new IT architecture needed for digital transformation.

Notably, the digital economy is set to remodel the enterprise market and with this, organizations face the increasing need to transform their IT infrastructure, in order to operate far and wide as well as on-demand, notified by real-time intelligence. The latest platform will help customers deploy their IT infrastructure at the centers of data exchange across the globe. This will bring users, things, applications, clouds and networks to the data, helping customers with access to “fit-for-purpose infrastructure”.

PlatformDIGITAL has been created to help customers address their global coverage, capacity, and ecosystem connectivity needs with a single data-center provider. This will also help tailor infrastructure deployments and controls, as well as enable global distributed workflows at centers of data exchange.

Digital Realty's Pervasive Datacenter Architecture approach (PDx) provides a thorough strategy in a bid to support PlatformDIGITAL. Developed by enterprise IT practitioners, this helps companies speed-up deployment and scale their digital businesses globally.

As part of these efforts, Digital Realty also announced the launch of four enterprise IT solutions, which can be quickly deployed on PlatformDIGITAL. These include Network Hub for rewiring the network, Control Hub for implementing hybrid IT controls, Data Hub for optimizing data exchange and SX Fabric for interconnecting global workflows.

Notably, with growing popularity of cloud computing, Internet of Things and big data, as well as the use of third-party IT infrastructure by several companies, data-center REITs have been witnessing a boom. Additionally, the estimated growth rates for the artificial intelligence, autonomous vehicle and virtual/augmented reality markets will remain robust over the next five to eight years. This will significantly propel growth of data-center REITs, such as Digital Realty, Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. (CONE - Free Report) and others.

Amid these, accretive acquisitions and development efforts are expected to boost Digital Realty’s top-line growth. The company recently announced that it has agreed to acquire the European provider of carrier and cloud-neutral colocation data-center services, Interxion (INXN - Free Report) , in a deal worth $8.4 billion, including debt. The combined entity will enjoy enhanced presence in major European metro areas, with its size and scale projected to result in an efficient cost structure and superior EBITDA margins. The company is also focused on maintaining a strong balance sheet and has ample liquidity.

However, given the data-center real estate market’s solid growth potential, competition is expected to intensify in the upcoming period from existing as well as new players. Amid all these, an aggressive pricing pressure is anticipated in the data-center market.

Over the past year, shares of this Zacks Rank #3 (Hold) company have underperformed the industry it belongs to. In fact, its shares have gained 7.3% compared with the industry’s rally of 14.8% during the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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