NextDC: beyond value territory?

10 Comments

1. 

   Andrew Legget
   July 10, 2013 at 9:37 am:

   Have been thinking about various elements of the tecnology space. The Steve Jobs biography kind of got me thinking about it.

   The above does not sound like the strongest field. It is really appears to be kind of a Kennards self storage for data and i believe it wouldn’t take too long for it to be commoditized if it hasn’t been already. Perhaps if they are one of the first in they can make some excess returns before the competition approaches, but i can see any excess returns being easily eroded away in the future.

   This sounds like a place that, as long as you have the systems, security and safety for the clients data then there is little in the way of competitive advantage and it will all rely on price.

   The only way i can see it getting ahead is if, like Apple does with iCloud, it is fully integrated with entire systems and hardware so that switiching is difficult and time consuming.

   • 

     Andrew Bell
     August 23, 2013 at 3:17 pm:

     NextDC are the competition, Amazon Web Services, Interactive and others are already well established.

     The NextDC model does cause me some concern, they have a lot of debt and a lot of empty data center space so I’m wondering how long it will be before NextDC’s sales people are out offering discounted rack space just to get bums on seats.

2. 

   AlexGarnock
   July 9, 2013 at 10:49 pm:

   Good article another part of their competitive advantage is the software they use to store client data. It essentially scrambles it making it potentially quite hard to shift the data to another centre. Oracle has been doing this for years.

3. 

   George Tsirigotis
   July 9, 2013 at 9:30 pm:

   Hi Roger
   I posted a comment on your blog about NextDC on your insight video titled ‘the internet of everything’ and the great future prospects of NXT.
   To be honest, I don’t think anything has changed apart from the price which is in an upward movement and still believe there is value in this stock in the medium and long term.

   Lets be honest, there is no other Australian independent competitor that will have the same national footprint as NXT, that has the high standard on security, flexibility, scalability, power, cooling, as well as streamlining IT operations including the ONEDC application.

   Also, these US companies such Amazon, Google, Equinix and the like also have a disadvantage.
   We know that the Australian Regulatory Authority have advised financial institutions that if they house their data offshore and there are security breaches, they will be looked at unfavourably, with a new bill also passing through parliament not long ago that will make it an offence if security is breached, as they need to protect their data and the integrity of their data if housed offshore.
   Lets not forget that the patriot act in America states that the FBI and other entities can access/take any data (hardware) they like in all data centres hosted in the US when called upon.

   All in all, as NXT continue to add customers, expand their footprint (national and abroad) and build their reputation as a leading, independent, co-located, secure data centre provider, the ‘sky really is the limit’, as noted by you with the high PE ratio’s of their peers/competitors.

   Regards

4. 

   Michael Sloan
   July 9, 2013 at 4:22 am:

   NextDC looks like a scary investment to me. Apart from there being few major obstacles to entry with this business, once established in “the cloud”, switching costs for users of these services are negligble. Their inherent flexibility is one of the major attractions. I’m not sure which of NextDC and APDC is the scarier investment. I stopped looking at the APDC prospectus when I came across the statement “APDC will not own all of the building infrastructure and fitout”.

5. 

   marcus fox
   July 7, 2013 at 10:52 am:

   i’m still learning

6. 

   Eddie Nebo
   July 6, 2013 at 6:19 pm:

   Hi Guys,
   Just some small scuttlebutt. take from it what you will.
   Upon reading the article I have to add.
   Not all their buildings and equipment is ‘state of the art”, although they are out selling it.
   Melbourne and Sydney sure are though and also first mover …not so sure about that but national footprint – first mover is probably better description.
   Notwithstanding…I do hold a small parcel, and this space is quite fluid at the moment, with (all thing being equal) growth for couple of years yet with SAAS coming on stream in a big way.
   Anyways keep up the good work an Mont Invest. I read the blogs every week. ;)
   Regards,
   Eddie

7. 

   darryl wilson
   July 6, 2013 at 12:30 pm:

   Roger,Invested at an excellent price in NXT so found your article food for thought.May be time to move on.Will consider..halving my stake.

8. 

   WAYNE BARTLEY
   July 5, 2013 at 8:04 pm:

   NEXT DC HAVE DISPOSED OF THEIR ENTIRE HOLDING IN ASIA PACIFIC DATA CENTRE GROUP AS ANNOUNCED ON 6/06/2013
   REGARDS WAYNE

9. 

   Sashi Paul
   July 5, 2013 at 7:05 pm:

   Is the company in the same business as Vocus Communications – assume not as there is no mention in the commentary about Vocus