Hyperscale data centers reached over 390 worldwide in 2017

Hyperscale operators are defined as enormous companies like Amazon, Apple, Facebook and Google that need to provide computing on a massive scale. You would think that there would be a limited number of this type of highly specialized data center, but recent research from Synergy Research found that 2017 was actually a breakout year for new hyperscale data centers across the world — with no sign of slowing down in 2018.

Synergy reported that the year closed with over 390 web-scale data centers worldwide with Google being particularly active. Chinese companies Tencent and Baidu also built hyperscale data centers this year. Still, the vast majority are in the US with 44 percent of the total. China is second way back with 8 percent, followed by Japan and the UK with 6 percent each and Australia and Germany with 5 percent each.

Synergy reports that on average, the 24 hyperscale firms have 16 data centers each. The companies with the largest number won’t come as a surprise to anyone with Amazon/AWS, Microsoft, IBM and Google each having at least 45 worldwide.

These operators often build their own equipment to deal with the specific needs of their immense computing requirements. By designing their own hardware and software, these companies can control every aspect of the computing experience to squeeze out the maximum amount of efficiency, which is crucial when you are dealing with the massive scale of these organizations.

To do this, they need to understand and be able to manipulate every configurable element, something that is typically not possible when buying equipment off the shelf. Because of these unique demands, it limits the number of companies who build these kinds of data centers to the largest technology companies in the world.

As these companies in this exclusive club continue to grow, they will continue to require additional hyperscale presence throughout the world and Synergy reports 69 additional facilities were in various stages of planning or construction, but not completed, as the year closed. At the current pace, Synergy predicts there will be over 500 worldwide by the end of 2019.

Featured Image: StockFinland/Getty Images

The food revolution may have just needed a cup of Blue Bottle

Each massive exit in the tech ecosystem usually follows the same cycle: an upstart becomes a huge business, it goes public or sells for a huge sum of money, many of the best people that built it take off and then they use their newfound wealth to start companies.

But in addition to tech, the venture community has its own pet project: coffee. With investors pouring money into companies like Blue Bottle Coffee, La Colombe and Philz, you’d probably think it’s still a pet project. Then, earlier this year, Nestlé acquired a majority stake in Blue Bottle at a valuation north of $700 million. And with that kind of an exit for a coffee startup, we’ll now test the ecosystem to see if we’ll see whether a diaspora of a class of coffee graduates will jump into the startup ecosystem themselves.

“If you view the startup ecosystem as a garden, this is a really good, healthy thing,” Collaborative Fund founder Craig Shapiro said. “Now there’s gonna be a bunch of new seeds put into the soil. There’s liquidity for all those employees and the founders who are each gonna be active in starting something new and trying something new. Maybe five years from now you and I could be talking about the Blue Bottle Mafia.”

There’s already been an array of startups that are looking to do things like make plant burgers like Impossible Foods, which raised $75 million earlier this year led by Temasek. There are also synthetic meat startups like Memphis Meats, which raised $17 million in financing from people like Bill Gates (whose name seems to come up a lot here) and Richard Branson, as well as DFJ. So the food ecosystem is not necessarily a new one. But despite a lot of venture funding flowing into this area, there doesn’t seem to have been a splashy exit in Silicon Valley’s pet project.

While it was a pet project, coffee may have made the most sense for a lot of funds like those putting money into coffee to test the waters. The operating margins aren’t bad, it’s a bit of a trendy pick and coffee may be a bit of a habit in addition to a consumer experience. Whether it’s selling and delivering roasted beans or having a shop on the way to work, coffee is a recurring experience, and there’s probably some internal metric somewhere of weekly active re-roasters or something like that. Silicon Valley loves that kind of recurring revenue model, should it actually take off.

Here’s a look at Starbucks’ operating margins for the past fiscal year, for example:

So, not really bad. But if you look at the company’s stock price, it’s had a bit of a middling year. Despite that, Starbucks still has a market cap of more than $80 billion:

I’ve made the not-so-much-of-a-joke suggestion that Amazon should buy a coffee startup. The company spent more than $13.7 billion acquiring Whole Foods, and there’s an opportunity for a brand match with Amazon and a true trendy coffee brand like Philz. And the market opportunity, as we’ve seen with the case of Starbucks, is actually quite big. Were a startup (or Amazon) to open a coffee shop across from even a fraction of each Starbucks store and try to sell a better coffee experience than that get-in-get-out-with-your-latte consumer behavior, and then sell at a slight premium, that already offers a pretty significant opportunity. And if you’ve ever been to a Blue Bottle, you’ll see that attempt at whatever an Apple Store experience looks like in coffee form is seemingly the goal.

Consumer packaged goods companies, or CPG for short, are already looking for different avenues to pick up brands that have some strong consumer affinity. Coca-Cola, for example, bought the Topo Chico — a superb sparkling water startup that’s very popular in Texas — earlier this year (thanks for spoiling that, NYT). These kinds of product-focused companies with strong consumer brands are clearly wildly valuable to larger food and beverage companies, and all this M&A activity will surely catch the eye of investors.

Shapiro argues there will be a lot of interest in clean-ingredient movements beyond just the noise happening around plant-based foods. Bigger food and beverage companies have challenges changing their procurement strategies, Shapiro said, so it could indeed make sense to pick up a startup or smaller company that is already a self-contained operating unit. He pointed to RXBar, which Kellogg acquired for $600 million earlier this year.

“I think between new funds focused on this as well as existing funds that are now paying attention to it, I think we’re gonna see significant investment and orders of magnitude more than what most people anticipate,” he said.

A splashy exit like this will probably catch the attention of investors and potential entrepreneurs with experience in the CPG space. CircleUp, for example, raised a $125 million fund to invest in consumer products earlier this year. What we’ll have to see is if an exit like Blue Bottle actually provided the liquidity investors and founders or early employees needed to get started on their own companies — but at the very least, it looks like the spark may soon evolve into a flame.

Featured Image: Richard Levine/Corbis/Getty Images

How a simple tech upgrade at the IRS could transform the economy

Our credit system runs on the power of data. A simple IT upgrade at the IRS would put more of this power in your hands.

When you apply for credit, such as a loan, credit card or mortgage, you essentially ask a lender to evaluate your financial picture to make an informed decision about your approval, rate and terms. Right now, the information that lenders use primarily comes from two sources: you (the applicant) and private credit bureaus that keep track of things like your payment record to your current and past creditors.

This system is imperfect for a variety of reasons. It frequently leaves lenders with gaps and distortions in assessing your creditworthiness. Critical information that could make the picture clearer can’t be accessed at the speed our modern economy moves. Notably, this includes detailed, verified, multi-year financial data from your tax return, which can prove facts such as the applicant’s steady income. It’s held back by outdated technology at the Internal Revenue Service.

New legislation would change this. The IRS Data Verification Modernization Act of 2017, recently introduced in Congress by Rep. Patrick McHenry (R-NC) and Sen. Cory Booker (D-NJ), would set up an application programming interface (API) at the IRS.

This API would turn a cumbersome, manual process into an automated one. An API would allow the agency to provide your transcripts the instant you give your authorization. Credit providers would then have more information to make better decisions about your approval and rate. This could cut financial fraud and improve credit prices, speed and access for everyone.

Here’s how it would work

Right now, you can file what’s called a 4506-T form with the IRS. This form gives the IRS permission to send summarized transcripts of your tax returns to a third party, like a lender. It might take weeks to provide the information. It can happen quicker, but often only if you can afford to pay a private expeditor to speed things up. Lenders use these transcripts to confirm the details of your application, but it’s usually too late to factor them into your approval or rate in the first place.

Current technology makes this unnecessary. An API is essentially a specification that allows one program to request data from another one, securely and in real time. If you’re reading this article, or if you’ve ever used Facebook or gotten directions on your phone, you can thank an API. They’re commonplace — already enjoying widespread adoption and usage across the internet and our financial system.

Like the U.K. and the EU, the United States is seeing a digital transformation across its financial services industry.

Setting up the API that the legislation calls for would have huge results. For example, you could get a better rate on a mortgage because your lender could have instant access to more information to price your loan more accurately. If you were teetering on the edge of a bad credit score, it could mean getting a loan when you otherwise wouldn’t.

Leveling the playing field would be especially helpful for small businesses. It’s common for entrepreneurs to run a large balance on personal credit cards to get their business going, leading to a lower credit score. If they seek a business loan to consolidate this debt or grow their companies, they have trouble getting anything but the worst terms. A 4506-T API would mean the credit provider could consider more comprehensive financial data. They could see, for instance, that an applicant has been growing steadily and maintaining a stable profit margin.

Similar models across the Atlantic

The API proposed by Rep. McHenry and Sen. Booker is just the start. Other places around the world are beginning to adopt more comprehensive initiatives that expand access to financial data through innovation.

For example, by early next year, the United Kingdom will implement its Open Banking measures, which will enable people and small businesses to share their transactional-level current account data securely between banks and third parties through an API. This will transform the borrowing process by making credit assessment faster and more efficient, and reduce the likelihood of fraud, among other benefits.

This is in addition to the business data already available through Companies House, which serves as a central national repository that anyone can access for business information, including financial statements. Today, credit providers rely on this information, along with other data, to assess applications. In fact, the U.K. has had a public register of companies since 1844, but we have nothing comparable in the United States on a national level.

The European Union is instituting its own data access framework with the revised Payment Services Directive (PSD2), which requires banks to open up APIs by 2018 to give third-party providers access to their customers’ accounts. The directive aims to drive increased innovation, transparency and competition in payments and other financial services.

Like the U.K. and the EU, the United States is seeing a digital transformation across its financial services industry. People and businesses are seeking new options, enabled by technology, for making payments, getting loans, managing their budgets and more. But unlike our neighbors, we have no plan for getting our financial data, which these new services depend on, out of its current chokehold.

Setting up a 4506-T API at the IRS does not require legislation. But the IRS has been unable or unwilling to make it a priority to date, and, in fact, a similar measure in the previous Congress failed to garner enough support to pass.

It’s encouraging to see the bipartisan support this current bill has received so far in both houses of Congress. As our economy speeds ahead, we must ensure that this important tech update does not get left by the wayside.

Featured Image: ronfromyork/Shutterstock

Watch the second half of Bubbleproof’s first season

We’re excited to be premiering a new mockumentary series about the startup world called Bubbleproof. You can watch the second half of the first season right here.

If you missed the first four episodes, you can find those here.

Episode 5

[youtube https://www.youtube.com/watch?v=hhgVfZQXnfg?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent&w=640&h=390]

Episode 6

[youtube https://www.youtube.com/watch?v=5CrxMXVXVjk?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent&w=640&h=390]

Episode 7

[youtube https://www.youtube.com/watch?v=6OMPBFf2MQg?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent&w=640&h=390]

Episode 8

[youtube https://www.youtube.com/watch?v=Nex98ZBxZ7g?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent&w=640&h=390]

Episode 9

[youtube https://www.youtube.com/watch?v=bd_DfayOR6k?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent&w=640&h=390]

Automating your life on this week’s episode of CTRL+T

People are lazy. Well, let me speak for myself. I am lazy. So it’s no wonder why on this week’s episode of CTRL+T, I was drawn to some news items that touched on home assistants and personal assistants for when you’re out in the wild.

Amazon’s Echo Dot was the top-selling product on all of Amazon this holiday season and startup Fin recently launched its human/AI personal assistant.

Henry Pickavet, TC editorial director and CTRL+T co-host, and I also explored the HQ Trivia craze. This past week, HQ Trivia launched its Android app in Canada and opened up pre-registration for U.S.-based Android users. HQ plans to launch its Android app in the U.S. on January 1.

In the vein of getting people or AI to do things for you, I spoke with Omni founder and CEO Thomas McLeod about his on-demand storage and rental startup. McLeod described Omni as an “operating system for things.”

For example, Omni is going to start building out a service where you can get services performed, like dry cleaning for your suit, before Omni delivers it to you from storage. Down the road, McLeod envisions an ATM of sorts, where you put a bike in storage in San Francisco and then have access to a bike somewhere across the world.

“It’s more about having access to things and not necessarily your things,” he said.

Subscribe to CTRL+T on Apple Podcasts, Stitcher, OvercastCastBox or whatever other podcast platform you can find.

Apple’s $29 iPhone battery replacements are available starting today

Those $29 battery out-of-warranty replacements Apple promised are now available for impacted users with an iPhone 6 or later. The company was initially aiming for a late-January timeframe in the States when it first offered up the discount, following blowback against its admission that it had slowed down older model phones to maximize performance.

“We expected to need more time to be ready,” the company said in a statement offered up to TechCrunch this weekend, “but we are happy to offer our customers the lower pricing right away. Initial supplies of some replacement batteries may be limited.”

In other words, get ‘em while the getting’s good. The steep $50 discount on battery replacement marked a rare public apology for the company, and many users are likely to jump on the opportunity to breathe a little extra life into their phone. The competition has certainly made the most out of the news. Chief competitors including Samsung, HTC, LG and Motorola have all used the opportunity to note that they haven’t taken similar approaches with their handsets.

Yesterday, meanwhile, iFixit used the apology as an excuse to discount its own iPhone battery replacement kit to $29, even as the news was already driving a spike in purchases. The company cited the potential wait time for battery replacements as a reason to jump on its offer.

The delay as the company ramped up battery availability, coupled with the timing of scheduling a Genius Bar appointment have been a source of subsequent frustration for users already put off by a lack of transparency around the phone slowing policy. If you put in for a replacement prior today, the $50 discount would not apply to your phone.

For now, however, the offer’s good right now. Apple will be offering more details on the replacement program on its site.

Police shoot dead man after alleged Call of Duty ‘swatting’ hoax

Media playback is unsupported on your device

Media captionListen to the hoax 911 call: "I shot him in the head and he's not breathing any more."

A man has been arrested after an alleged "swatting" prank call led to police shooting dead a 28-year-old man.

Andrew Finch was shot at his front door on 28 December in Wichita, Kansas.

Police surrounded the home after receiving a hoax emergency call from a man claiming to have shot dead his father and taken his family hostage.

The call stemmed from a row between two gamers playing Call of Duty online, US media say, although the address raided was apparently unconnected to either.

Police have said they believe the report was an act of "swatting" where a person makes a false report to send police to another person or fake address.

'Innocent victim'

Audio of the emergency call has been made public. A man can be heard telling authorities that he had shot his father in the head, and claimed to have taken his mother and siblings hostage.

The caller also said he had a handgun and had poured fuel over the house and wanted to set the property on fire.

Image copyright CITY OF GLENDALE
Image caption A 25-year-old from California, Tyler Barriss, has been arrested

Police say they surrounded the address the caller had given, and were preparing to make contact with the suspect reportedly inside when Mr Finch came to the door.

They said one round was released by officers after the 28-year-old failed to comply with verbal orders to keep his hands up, and appeared to move his hands toward his waist multiple times.

Police say Mr Finch was later found to be unarmed, and was pronounced dead at a local hospital. A search found four of his family members inside, none of them dead, injured or taken hostage.

His family told local media that he was not involved in online gaming.

What is swatting?

  • The false reporting of emergencies, in order to try and get a Swat (Special weapons and tactics) team response to a location
  • It has been linked to disputes in the online gaming community
  • Perpetrators often disguise their number or call non-emergency local numbers to avoid being identified

"The irresponsible actions of the prankster put people and lives at risk," said Wichita Police Department Deputy Chief Troy Livingston.

"The incident was a nightmare for everyone involved, including the family and our police department.

Other stories that may interest you:

"Due to the actions of a prankster, we have an innocent victim. Had the false police call not been made, we would not have been there.

"We don't see it as a joke, it's not a prank. It heightened the awareness of the officers, and we think it led to this deadly encounter."

Image copyright Wichita police department facebook
Image caption Wichita Police authorities confirmed the call was being treated as an alleged "swatting"

US media reports that a dispute over a game led to one gamer threatening another with a "swatting", who then gave the first gamer a fake address. That address was then reportedly given to a third person, a known online "swatter", who allegedly made the emergency calls.

UMG Gaming, the online platform where the Call of Duty game was being played competitively for a small cash wager, released a statement saying they would work with the investigating authorities.

Tyler Barriss, 25, was arrested by police in Los Angeles on Friday in relation to the investigation.

Local reports say Mr Barris had previously been charged with making bomb threats to a local television station in 2015.

Social media accounts reportedly linked to the incident have been suspended after a series of posts were made about the shooting.