Tower Owner SBA Buys Data Center for Edge Computing Know-How

Mike Dano
9/18/2019

Cell tower owner SBA Communications said it purchased a data center in Chicago last month in order to learn about the edge computing opportunity.

"We're going to use it as an R&D facility," explained SBA's chief executive Jeffrey Stoops in comments at a recent investor event. He said the data center, called New Continuum, was built like a "vault" to handle computing functions for the US government, and that SBA's acquisition of the data center also includes a small loop of fiber in downtown Chicago. Stoops wouldn't disclose the purchase price for the data center, but SBA apparently swung a sweet deal. The facility, which hosts a mix of retail and wholesale operations, will be "totally immaterial" to SBA's overall financial situation, according to Stoops.

SBA representatives did not respond to questions from Light Reading about the acquisition.

Stoops said the purchase will provide SBA with edge computing know-how, "so when the computing world really does start to take shape, we will be educated, knowledgeable, and will know exactly how best to maximize our interest there." He said SBA owns 16,000 cell tower locations around the US, and each one of those locations could be used to host an edge computing facility.

Stoops laid out three scenarios for how SBA might play in the edge computing market:

  1. The company could act as a landlord for edge computing locations.

  2. The company could build data centers but allow others to manage the locations.

  3. The company could fully own and manage data centers for edge computing.

"We don't really know how to do that last part," Stoops said.

SBA isn't the only tower company to look for a role in edge computing. Crown Castle, another big US cell tower company, has invested in startup Vapor IO, while American Tower acquired the Atlanta, Ga.-based ColoATL data center earlier this year.

SBA last year signaled its initial interest in edge computing via an agreement with edge computing vendor Packet to run an edge computing location for SBA in Boston.

Why this matters
Edge computing promises to reshape how the Internet works by spreading computing capabilities to thousands or even millions of locations. That would represent a huge change from the way the Internet works today, where most computing requests are routed to a handful of massive data centers in a few big cities around the country.

The push behind this redesign is to bring computing functions closer to the "edge" of the network -- closer to where Internet users are physically located. Putting computing resources closer to users eliminates the time it takes for a computing request to travel to a far-off data center. Those kinds of snappy, responsive connections could be essential for real-time applications like virtual reality or autonomous cars.

As a result, a wide range of companies -- ranging from giants like Verizon to startups like EdgeMicro -- are investing in the idea of edge computing. And cell tower companies have routinely argued that they could play a big role in edge computing considering they own real estate around the country (cell tower locations, for instance) that supply power and fiber that's critical for edge computing.

However, it remains to be seen whether the edge computing space grows into a major opportunity, and whether tower companies will snag a role in the evolution of the space. Others, such as cloud computing provider Amazon and data center operator Equinix, are undoubtedly eyeing the opportunity as well.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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