WSS: Steady performance in webscale, managed infrastructure, while hyperscale set to accelerate amid strong demand signals, global expansion, investments
A busy week across the sector saw the tail end of earnings season, while there was again significant activity in Southeast Asia, and GPU clouds continued to expand and look to be moving into Canada as more real estate entities converge on the data centre and hyperscale sector.
Last week, we looked at the results coming from a number of ecosystem companies and the results spoke volumes about directional trends. Energy companies like Dominion Energy and Duke Energy continue to see hyperscalers and data centre operators asking for significant volumes of power, while chip producers like NVIDIA and AMD continue to see demand moving forward in an aggressive direction. This past week, we took a closer look at the results coming from the webscale and managed infrastructure space. Earlier in the earnings season, we saw how Akamai and Cloudflare did, and in the past week, we looked at Rackspace, DigitalOcean, OVHcloud and SMB-oriented providers like IONOS and GoDaddy. DigitalOcean and OVHcloud are growing in the double-digit y/y range, while IONOS and GoDaddy are right around there as well. The performance levels have been consistent across the board and are encouraging given all the instability and unpredictability around macroeconomic conditions, which tend to have a greater impact on the type of SMB and mid-market users these providers serve. Racksapce is bit of an exception, given its different business model and focus, and it has seen negative growth for several years, but also has shown signs of altering that trend and positioning to move in the other direction.
The SMB and managed infrastructure space also saw some M&A in the past week. HostPapa acquired Ingram Micro’s CloudBlue automation assets that help service providers automate, manage and deliver cloud, managed hosting and SaaS services to customers. Bringing in CloudBlue gives HostPapa both direct retail and indirect wholesale capabilities.
Earnings season has some irregular timing and Oracle reported results for the last quarter of its 2025 fiscal year. Oracle continues to push forward and shared a number of data points and insights that speak to its long-term growth potential. Demand continues to exceed supply and Oracle anticipates OCI growth is going to accelerate meaningfully into the next year as its backlog comes online and it continues to absorb capacity that it has built out. The pace at which this is moving is a positive indicator for Oracle’s need to procure more data centre infrastructure sooner than later.
And speaking to the long-term demand that hyperscale cloud is driving, there was more expansion activity. AWS acquired land in Leesburg, Virginia and has plans to invest big in North Carolina, while Microsoft is investing in Switzerland to support AI growth.
In global markets, Southeast Asia continues to be a region seeing regular activity. Thailand in particular has been a busy market and recently saw a pair of joint ventures formed. Digital Edge joins the many new market entrants into Thailand and formed a JV with energy company B.Grimm Power for a 100MW project to the southeast of Bangkok in the Chonburi area that is rapidly developing into a hyperscale cluster. TrueIDC is an established operator in the market and it partnered with Global Infrastructure Partners (part of Blackrock) and Thai conglomerate BP Group to invest an estimated $1b to expand TrueIDC’s data centre footprint in Thailand.
Elsewhere in Southeast Asia, there were a number of developments in Jakarta, Indonesia. DCI Indonesia brought online the JK6 data centre at the Cibitung campus, while GoTo Group completed migrations to Chinese clouds Tencent Cloud and Alibaba Cloud. The Chinese clouds have started to gain momentum in the last several quarters and are expanding with their data centre colocation partners in places like Jakarta – a welcome development given how things had slowed. In a positive development for data centre operators, CapEx investments are on the rise from the Chinese hyperscalers and we take a quick look at the latest CapEx data points from Tencent. APAC is a vast region to be sure and AWS continues to expand its footprint there. Just this past week, AWS went live with a new cloud infrastructure region in Taipei, Taiwan. Taiwan is a young hyperscale market and how has both Google Cloud and AWS with in-country infrastructure.
Back in North America, the competitive landscape continues to evolve and real estate development companies continue to dive deep into the sector. The latest was Related Companies and they recently launched the Related Digital data centre arm. Related Digital has a maiden project in Canada that looks to be serving a GPU cloud provider with an anchor customer in tow. This deployment is said to be pre-leased and would require dozens of MWs that needless to say, would move the needle for expansion in a market that is smaller and does not always move that quickly.
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