2021 mid-year outlook the cloud has four walls 8 april

2021 Mid-year OutlookThe Cloud Has Four Walls

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND

THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investorsshould be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making

their investment decision.

8 April 2021

Research Analyst Research Associate Research Associate

Sami Badri

Communications Equipment & Infrastructure ResearchTel: +1 (212) [email protected]

George Engroff


Lauren Lucas


Equity Research Americas

mailto:[email protected]



Sami Badri | 212-538-1727 | [email protected]

I. Coverage Summary – Ratings & Target Prices

II. Data Centers

III. Towers

IV. Telecom & Networking Equipment

V. Company Ratings & Target Prices

VI. Appendix

2

Table of Contents (Click Below to Jump to Section) Outlook


Telecom & Networking Equipment Communications Infrastructure

Data Center Capex &

Construction Trends

Cloud Network Architecture

Shifts Led by Equipment

Affecting Capacity Needs

Enterprise & Cloud IT Spend

Customers Shared

Coverage Model Structured to Capture Both Communications Sectors with Converged IT

Spend, Cloud, & Telecom Visibility Modeled Across Both Sectors.

Source: Credit Suisse Research.

Telecom Spending Trends

and Upgrades

3

Credit Suisse Coverage Model Outlook

Ticker Rating, Target Price, and Thesis Summary

RADITop Pick: (Outperform, $19 Target Price) – The only publicly traded equity focused solely on tower land interests. We believe RADI’s indexation to the telecom ecosystem and their scalability across 19 countries should sustain 20%+ CAGR for the next 3 years., making

them an attractive company, especially since their cash flow streams are less risky than already low risk tower companies.

EQIX(Outperform, $942 Target Price) - As EQIX extends its scale more easily and establish itself with a wider spectrum of channel partners, its interconnection revenues should grow at 2x the colocation market revenues through 2024 and EQIX remains the dominant

interconnection vendor globally. All in, a premium multiple is warranted, in our view.

COR(Outperform, $156 Target Price) – Following challenged lease renewal pricing and elevated churn in the last two years, churn, lease renewal rates, and overall revenue growth are set to improve in 2021 based on company guidance and our review of enterprise end market

dynamics. Given COR’s revenue mix is ~45% enterprise, an uptick in enterprise activity can accelerate the broader business tremendously.

SWCH(Outperform, $19 Target Price) – Longer-term, we expect SWCH to grow ahead of MTDC peers on revenue and EBITDA, despite churn headwinds in 2021, due to its highly power-dense facilities which address large workload applications. Despite its strong growth

outlook, SWCH still trades at a meaningful discount to the peer group.

MSITop Pick: (Outperform, $198 Target Price) – MSI is one of very few providers that can offer a true end-to-end solution for customers from first responder radios to full command center (software) communications in one aggregated and auditable system. We see MSI as

the leading provider and highly irreplaceable given it is the only true large scale U.S. based end-to-end provider serving municipal, state, and federal first responders in North America.

AMT(Outperform, $296 Target Price) – AMT is the largest REIT in one of the world’s most highly visible businesses, towers. The U.S. 5G buildout cycle will provide solid visibility long-term, and international expansion should boost growth over the medium and longer-term as

the company remains acquisitive, consolidating high value opportunities within its already vast and diversified portfolio of assets. Recent stock pull back presents attractive entry point.

COMM(Outperform, $21 Target Price) – Despite recent pressures on COMM’s end markets, we continue to view the company’s relevance to overall telecom network densification and data center build-outs as positive over the next few years. The company boasts a strong track

record of operational excellence and discipline with respect to debt pay-downs and achieving synergies from integrating acquisitions.

DLR(Outperform, $167 Target Price) – Global hyperscale data center leader. We are constructive due to strong hyperscale/enterprise demand, improving renewal spreads, and better European positioning (InterXion assets). DLR’s development yields to climb to the 12%+

range given these factors and increased cross-selling.

ANET(Outperform, $359 Target Price) – ANET is well positioned to benefit from strong cloud titan capex spend growth. Cloud titans and SPs will continue to look to ANET for data center switching long-term, in our view, based on the company’s proprietary EOS software, quick

adoption and integration of leading edge components (merchant silicon use, latest DC switching chip), and network equipment power efficiency.

FFIV(Neutral, $207 Target Price) – Despite the end market equipment pressures by cloud providers, we continue to see FFIV's relevance in the enterprise customer multi-cloud transition as networking interconnectivity becomes increasingly more complex, requiring superior

product solutions like FFIV’s ADCs. Partial or full hybrid cloud adoption, heightened by COVID-19, highlights the importance of FFIV’s technology, increasing its relevance in a highly virtual and secure network.

SBAC (Neutral, $277 Target Price) – Third largest TowerCo, with impressive execution to benefit from ramping 5G buildout, but slowdown in domestic tower activity due to Sprint churn will hinder SBAC, which has limited optionality given elevated leverage.

CCI (Neutral, $155 Target Price) – Unlike AMT and SBAC, CCI pursued small cells/fiber in the U.S over international and macro towers. We believe the long-term ROIC prospects are therefore lower, but its U.S. business remains strong.

CSCO(Neutral, $46 Target Price) – CSCO continues to dominate numerous networking equipment end markets, but faces pressure from SP and enterprise spending, exacerbated by COVID-19. While we expect CSCO’s influence and innovative prowess will persist regardless of

the COVID-19 constrained macro backdrop, we are neutral pending end-market competitive dynamics, in particular for campus switching and WLAN.

QTS (Neutral, $71 Target Price) – QTS’ recent performance has been strong, indexed to cloud/hyperscale growth and enterprise hybrid growth with solid assets in Georgia and expansions into Arizona, but dilution remains overhang in our view.

CONE(Neutral, $82 Target Price) – Hyperscale demand accelerated due to COVID-19, and we believe solid demand should continue through 1H21. However, hyperscale pricing remains dynamic despite checks that pricing has troughed, and we favor MTDC peers that have

more exposure to hybrid cloud dynamics or vast global footprints.

CCOI(Neutral, $70 Target Price) – We continue to believe that CCOI’s NetCentric business is positioned well on a longer-term basis given its 5G, AR, and VR customer application ramps, but the medium-term dynamics regarding Corporate Customer growth have moved us to

the sidelines. We remain cautious on CCOI’s Corporate customer growth until U.S. office vacancy indicators recover.

JNPR(Underperform, $22 Target Price) – JNPR faces multiple pressures that we believe will lead the stock to Underperform. These include intensifying technological pressures from CSCO – virtual core and new Silicon One/8000 Series offerings – the rise of White Boxes, and

slower than expected 5G deployments. In our view, potential growth from JNPR’s customer diversification attempts will be offset by fierce competition in the service provider space.

UI(Underperform, $126 Target Price) – Total revenue forecasted to decelerate from recent highs, pressuring UI’s trading multiple. We are forecasting decelerated growth for UI’s key end-markets including WLAN and campus switching driven by macro trends and increased

competition. In our view, the capital allocation intensity is unsustainable and will not be able to counter expected revenue contractions.

Sami Badri | 212-538-1727 | [email protected] 4

Coverage Summary Outlook

Data Centers & Cloud InfrastructureHigh Cloud Demand Remains Stable in 1H 2021, Elevated Demand Levels Expected to Last Through 2021


6

Data Center OutlookExecutive Summary

Data Centers



For 2021, we see the data center sector as well positioned to continue its rise in relevance and growth (despite recent share price pullbacks), driven by enterprise

momentum. We identify the data center environment to be presenting a major buying opportunity for medium to long-term investors and highlight the following key

drivers and observations embedded in our 2021 Outlook:

Multi-Tenant Data Centers (MTDC) to See Solid Growth Due to Increasing Enterprise Strength in 2021, But Expect it in 2H: We believe industry commentary/channel checks

suggest that enterprise demand momentum should strengthen into 2021, acting as a strong tailwind versus 2020 performance, which was partially hindered by COVID-19, albeit stillmaintaining a solid backdrop. Robust enterprise demand by 2H21 would boost both colocation and interconnection revenues for Outperform-rated EQIX, DLR, COR, and SWCH. We viewthat enterprise demand will be especially strong in 2021 for a couple main reasons – (1) demand looked to be solid heading into 2020, but COVID-19 altered some plans for expansion,

as many companies deploying in smaller retail colocation environments chose to be cautious with spend in an uncertain environment; and (2) COVID-19 then acted as an accelerant fordigital transformation, turning many enterprises to a WFH model, and growing gaming and video streaming to new heights. All in, we believe the stars are aligned for enterprise

demand to accelerate in 2H 2021E creating a favorable situation for MTDCs. Importantly, see our 1Q21 channel checks slide to grasp the 2021 dynamics for timing.

Hyperscale Capex Spend Projected to Grow 14.7%/5.4% in 2021E/2022E, Driving More Business to MTDCs: Hyperscale Capex is a leading indicator for the Multi-TenantData Center industry largely because ~60% (2020 assumption) of all data center space, power, cooling, and interconnection is outsourced to third party data centers (MTDCs) rather than

built and maintained by the cloud service providers (insourcing). We expect this percent of outsourcing to begin indexing closer to the ~50% range through 2021E, largely a by-product ofthe vast scale the MTDCs have gained over the last five years, driving even more business to MTDCs, especially wholesale providers that have specialized in large scale data center

developments across top tier markets. Notably, across Tier 1 European Markets cloud providers have been reported to outsource almost 100% of capacity as they seek to collaboratewith experienced operators when globally expanding.

Backlog Intensity Has Surged Above 2018 Highs: MTDC backlogs remain high as of 4Q20, and backlog intensity (backlog / last quarter’s annualized revenue) has leveled at 8.5%,

above the last major high water mark levels seen in mid-2018 (6.4% in 3Q18). We expect intensity to come down slightly in 2021E as major data center builds are delivered tocustomers, commencing backlog revenues. Review: Using history as a guidepost, following the 1H18 high backlog intensity levels, 2019 was a year of pronounced outperformance withstrong commenced leases, revenue growth, and further follow-on leasing activity, strengthening the financial visibility and supply chains of MTDCs. We expect 2021E to see similar

characteristics as 2019, a year that several publicly traded data centers outperformed market indices and comparable asset classes.

Valuation – Following a Cooling Period, Data Centers Are on Sale: Data Center shares are trading at 19x EV/FY+2 EBITDA, versus their August 2020 peak of 22x and we thinkthis presents an attractive entry point opportunity given the aforementioned indicators/dynamics and the fundamental strength yet to come in a lease commencement year of major

backlog builds. Note, we believe it is possible that DC REITs could remain a victim to broader sector rotation, however we believe this dynamic has mostly played out and it will take abackseat to inflections in data center topline, EBITDA, and AFFOS growth as the year goes on, resulting in a share price momentum throughout 2021.

Key Stock Picks:

COR (Outperform, $156 Target Price, 28% upside) – Following challenged lease renewal pricing and elevated churn in the last two years, churn, lease renewal rates, and overallrevenue growth are set to improve in 2021 based on company guidance and our review of enterprise end market dynamics.

EQIX (Outperform, $942 Target Price, 38% upside) – As EQIX extends its scale more easily and establish itself with a wider spectrum of channel partners, its interconnectionrevenues should grow at 2x the colocation market revenues through 2024 and EQIX remains the dominant interconnection vendor globally. All in, a premium multiple is warranted, in ourview.

SWCH (Outperform, $19 Target Price, 10% upside) – Longer-term, we expect SWCH to grow ahead of MTDC peers on revenue and EBITDA, despite churn headwinds in 2021,

due to its highly power-dense facilities which address large workload applications. Despite its strong growth outlook, SWCH still trades at a meaningful discount to the peer group. DLR (Outperform, $167 Target Price, 17% upside) – We are constructive due to strong hyperscale/enterprise demand, improving renewal spreads, and better European positioning

(InterXion assets). We expect DLR’s development yields to climb to the 12%+ range given these factors and increased cross-selling.

0

50

100

150

200

250

300

1/1/2018 1/1/2019 1/1/2020 1/1/2021

Lo

gari

thm

ic

Scale

fo

r S

hare

Pri

ces (

Base 1

00)

CS Data Center Index S&P 500 Index Dow Jones Equity REIT Index AMZN MSFT GOOGL ORCL IBM

7

Data Centers Versus Market Returns (Stock Prices)Data Center Shares Have Roughly Matched the S&P 500 Since 2018 Until Recently; Performance to Improve Due to Secular Tailwinds, in Our View.


Source: Factset, Credit Suisse Research. Data Center Index includes EQIX, DLR, COR, CONE, SWCH, & QTS.

Data Center share prices have now nearly matched the performance of the Dow Jones Equity REIT index and but lagged the S&P 500 since January 2018. Following theCOVID-driven market pressures in 1Q 2020, public cloud providers’ performance has vastly outpaced the data centers. We believe that gap is likely to narrow given powerfulsecular data center tailwinds, such as Edge, 5G, hybrid cloud, and the exponential growth of data creation/consumption.

Data Center Performance Has Softened of Late,

Expected to Strengthen in 2021 on Continued

Cloud Demand and Further Lifted by Enterprise.

Data Centers

80

85

90

95

100

105

110

115

120

125

130

10/29/2020 11/29/2020 12/29/2020 1/29/2021 2/28/2021 3/31/2021

Lo

gari

thm

ic

Scale

fo

r S

hare

Pri

ces (

Base 1

00)

CS Data Center Index S&P 500 Index Dow Jones Equity REIT Index MSCI US REIT Index

8

Data Centers Versus Market Returns (Stock Prices)Data Centers Have Underperformed the Broader Market Since the Announcement of the COVID-19 Vaccine with Investors Buying Into Other Parts of the Market.


Source: Factset, Credit Suisse Research. Data Center Index includes EQIX, DLR, COR, CONE, SWCH, & QTS.

Data Center share prices have lagged other parts of the market in recent months. Since the end of October (about when the market was beginning to understand vaccineswould shortly be on the horizon), our Data Center Index has been up about 2%, while the S&P, DJ Equity REIT Index, and MSCI US REIT Index have gained 23%, 21%, and24%, respectively. Despite recent moves, we view Data Centers are positioned for a re-rating in 2021, driven by continued growth and overall tech infra demand.

Data Centers

Data Center Performance Lagging Broader REIT

and Market (S&P 500) Indices

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

EV

/FY

2 E

BIT

DA

QTS COR CONE DLR INXN EQIX SWCH Average

9

Data Center Returns (EBITDA Multiples)Data Center EBITDA Multiples Expanded Post-COVID; But Multiples Have Recently Eased Largely Due to Vaccine Rotation and Tough Compares.


Data Centers

Source: Factset, Credit Suisse Research.

DC EV/EBITDA Multiples Compressed in

1Q21 Reflecting Sector Rotation, and Are

Now Below Jan-2020 Levels…

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

0

20

40

60

80

100

120

140

160

180

200

1/1/2018 1/1/2019 1/1/2020 1/1/2021

Lo

gari

thm

ic

Scale

fo

r S

hare

Pri

ces (

Base 1

00)

CS Data Center Index CS Tower Index S&P 500 Index Dow Jones Equity REIT Index 10 YR Note (%)

10

Data Center & Tower Returns (Indexed Stock Prices)Rising LT Interest Rates Have Punished DCs and Towers Much More Harshly Than Broader REITs, Despite Similar Levels of Leverage and Capital Intensity.


Data Centers


10yr rates have moved roughly 1.7%, and while the recent trend is a negative for the REITs industry, nominal (and real) yields remain historically low.

Expectations for the level of interest rates are also low, which is beneficial for data centers and towers moving forward. In our view, as long as rates hold

below 2018 levels, we believe the outperformance of Data Center and Tower REITs can be sustained, assuming secular tailwinds are intact.

11

Outlook: Channel Checks for 1Q 2021 ResultsOur Channel Checks Include Inputs From: (1) Wholesale and Retail DCs (Colocation); (2) Hybrid Cloud Vendors (Managed Services & Web Hosting Providers, etc.); (3) Real Estate Brokers; (4) DC Builders; and (5) Private Equity Industry Contacts.

Data Centers



Customer Type Channel Check Summary

Cloud Service

Providers &

Technology

Companies

Leasing Activity: 1Q21 has been observed to be similar to 4Q20, albeit without new record leasing levels compared to 1H20 quarterly run-rates.The most recurring message this quarter was “hyperscalers are signing all their Right Of First Refusals (ROFRs),” which is signaling acontinued low supply-high demand market setup in 2021. The implication is actually very bullish for the sector and is continued evidence thatthere is a supply shortage for data center capacity in the market. Another interesting data point we heard was that hyperscalers have been veryactive “land banking” across markets, suggesting a large cycle of insourcing beyond 2022 for future compute infrastructure needs and this mayalso explain why hyperscale capex spending growth for 2021 has been revised up since 4Q20 reports, factoring in sizeable land purchases.

Pricing: Pricing for 5MW+ remains very competitive but the new pricing trough remains $70/kW for 10MW multi-block (10MW x 3), whichcompares to ~$65/kW that we were hearing about in 2019/2020. Major lease vintage renewals continue to be double digit negative but this is

expected to ease in 2021E, DLR a key winner here, seeing better comps. Connectivity: Web Traffic levels have stabilized further in 1Q21vs. 2020. Cloud On-ramps continue to be of highest strategic importance for cloud, hyperscale, and technology service providers as network

node distribution and enterprise customer harvesting continues to be a focus area for high revenue growth. DLR called out and remains well-positioned on the wholesale colocation side to deal with pricing, tight capacity supply and ramping cloud growth globally, especially in Europe.

Enterprise

Companies

Leasing Activity: Overall, behind our expectations, which were high in 4Q20 for 1Q21. We have heard numerous reports that enterprise dealsthat began negotiations in 2020 were delayed in 1Q 2021 with the following reasons mentioned: (1) WFH/in office staff rightsizing taking moretime to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing system integrator selection; and (3) chip/supplyshortages for IT solution gear also called out as an issue. Other factors include equipment refreshes and public cloud ecosystem lock-in asdecelerators to the enterprise cloud transition. We are now hearing that a big bulge of enterprise deals won’t get signed until May-June 2021 and

will commence in 2H21. Beyond the slowdown, DC operators continue to expect 2021E to be a big enterprise leasing year across

customer verticals. Government deal flows slowed down further in 1Q21 vs. 2H20. Pricing: Very stable pricing across markets and operators,most DC operators reporting strong pricing and renewals per checks as tier 1 retail colo market supplies get tighter.

Connectivity/Ecosystem/Channel: Interconnection ecosystem and channel remain strategically imperative for enterprises to deploying into yourinfrastructure, specifically calling out SaaS, SDN, Cloud On-ramps as requirements for deployment. EQIX/COR/SWCH are key winners here

given rising tide of enterprise demand expected in mid-2021; DLR strong in Americas and even stronger in EMEA.

Telecoms & NetworksActivity: Very active in 1Q21 with continued strong demand. Cable network checks indicating a very active 1Q21 compared to 2H20, perhapssuggesting they are now upgrading systems following the telco analyst days in mid-1Q21 and Federal funding proposals/bills.

Other Customer

TypesGaming Companies: Very active in capacity deployments across numerous geographies.

MTDC Metrics

2018 2019 2020 2021E 2018 2019 2020 2021E 2018 2019 2020 2021E

Revenue Growth Adj. EBITDA Growth AFFOS Growth

EQIX 16.1% 9.7% 6.5% 10.6% EQIX 17.6% 11.4% 6.1% 9.1% EQIX 11.9% 10.4% 8.5% 9.4%

DLR 23.9% 5.3% 21.6% 10.5% DLR 27.2% 2.7% 15.9% 10.5% DLR 10.5% -2.2% -1.7% 1.4%

COR 13.0% 5.2% 6.0% 7.0% COR 12.5% 4.1% 5.3% 6.0% COR 26.2% 5.9% 0.6% 2.6%

CONE 22.2% 19.5% 5.3% 8.9% CONE 21.7% 13.3% 4.9% 8.5% CONE 9.1% 5.1% 8.5% 0.7%

QTS 0.9% 6.7% 12.2% 12.9% QTS 7.8% 11.7% 19.2% 12.6% QTS -6.8% -1.6% -1.5% 11.8%

SWCH 7.3% 13.9% 10.7% 7.4% SWCH 3.6% 14.2% 16.4% 6.5% SWCH - - - -

Group Average 13.9% 10.1% 10.4% 9.5% Group Average 15.1% 9.5% 11.3% 8.9% Group Average 10.2% 3.5% 2.9% 5.2%

Backlog Intensity Share Price Returns* EV/FY+2 EBITDA

EQIX - - - - EQIX -22% 65% 24% -5% EQIX 15.8x 18.0x 22.8x 19.5x

DLR 3.1% 3.7% 6.3% - DLR -7% 11% 20% 0% DLR 16.9x 19.0x 22.0x 19.7x

COR 2.6% 3.4% 3.5% - COR -24% 30% 17% -5% COR 14.7x 16.0x 18.6x 17.2x

CONE 6.1% 5.1% 9.4% - CONE -11% 23% 15% -7% CONE 14.7x 16.4x 19.0x 17.0x

QTS 13.9% 18.8% 26.8% - QTS -33% 47% 18% 2% QTS 14.5x 15.8x 18.1x 15.9x

SWCH - 7.7% 9.8% - SWCH -62% 115% 12% -2% SWCH 15.6x 17.0x 16.3x 14.9x

Group Average 6.4% 7.7% 11.2% - Group Average -27% 48% 18% -3% Group Average 15.4x 17.0x 19.5x 17.4x

12

Outlook: 2021 Could be a Repeat of 2019Based Our Review of 2019 Data Center Performance and Stock Returns, We Believe That 2021 May be Comparable in Return/Growth, Supporting Our Upside Bias.

Data Centers


Source: Company data, Credit Suisse estimates. *2020 share price returns are YTD through 12/29/20.

Fundamentally, 2021 has a similar looking setup as 2019, which was a year the data center group returned 48% on average, not including dividends. First (1), onrevenue growth, 2021E is expected to grow slightly behind 2019 (+9.5% versus +10.1%) as major data center developments signed in 2H20 are set to commence in 2H21 due to

supply constraints. Second (2), Adj. EBITDA Growth is expected to trail topline growth in 2021E but margins remain healthy. This dynamic is also being driven by major leasingcommencements, but with added enterprise strength bolstering revenue growth alongside lower churn levels. Additionally, we believe there are elements of conservatism in mgmt.

initial 2021 guidance. Third (3), AFFO per share decelerated in 2019 to low single digits due to M&A and dilution from development funding and in 2021E we expect the AFFOS toaccelerate from 2020 levels, driven by greater scale and stronger balance sheets. Fourth (4), given the fundamental improvements in the 2021E data center cycle versus the lastcomparable one in 2019, we expect strong stock returns in 2021E with (5) scope for multiple expansion given recent compression, similar to what we saw in the 2019 cycle (whenit was compared to 2018). We expect 2021 returns to be composed of both bottom-up performance and to see valuation multiple expansion as data centers gain

further investor interest if the enterprise strength our channel checks and industry compiled data points are accurate.

1 12 2 3 3

4 5

13

Data Center Industry Surveys (Published March 2021)Industry Surveys Suggest Public Cloud Demand is Shifting Towards Hybrid and Multi-cloud Approaches, With IT Budgets Allocating Increasing Spend to Off-prem.


Omdia’s colocation and cloud services surveys published on March 2021, were composed of 140+ respondents each and based on collected responses in November 2020. Based onthe company sizes of the responders, we view these surveys as good barometers of the overall cloud and colocation industry to gauge enterprise demand and IT architecture changes. Our

view of Enterprise acceleration in 2021 coincides with our channel checks and these Omdia surveys. Additionally, for four of these categories we estimate category forecasts based on our

own channel checks and due diligence. Our findings below are based on the consumption of both Omdia surveys covering cloud/colocation changes in IT architectures.

Source: Credit Suisse Research, Omdia Colocation Service & Leadership Strategies March 2021 (N=142), Omdia Cloud Service Leadership Survey March 2021 (N=154).

Data Centers

Survey Question: Which types of cloud service architectures does your organization use now, and what will it

be using by year-end 2022?

65%

50%

70%

55%

1%

44%

40%

56%

43%

49%

53%

48%

0%

31%

27%

49%

41%

40%

62%

77%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Don't know

Multicloud

Off-prem hybrid cloud

Hybrid cloud

Community cloud

Off-premises private cloud

On-premises private cloud

Public cloud

Now Year-end 2022 Credit Suisse Est. 2023E

Key Survey Findings:

(1) Public Cloud – Sizeable downtick registered by

enterprise spenders for public cloud seeing 77% of

responders today and moving down to 48% by year-

end 2022. With clear shifts into off premise private cloud,hybrid clouds and multi-cloud models. Note, 2020 was a

big year for public cloud as the pandemic made it difficult

for enterprises to deploy other types of IT models.

(2) Off-premises Private Cloud – Noticeable uptick

in this category moving from 40% of architectures

today to 49% by year end 2022. Furthermore, we seethis category going to ~55% by 2023E driven by

increased colocation demand and better connectivity

options in colocation DCs rather than in on premise

enterprise environments.

(3) Hybrid Cloud – Noticeable step up in responder

votes to 56% of total responders by year end 2022,

but even bigger to 2023 in our view. We believe thiswill become a dominant architecture by 2023E driven by

more optimized IT consumption models by both hardware,

software, and cloud companies.

(4) Multi-cloud – Big step up to 2022 as well, driven

by the same forces highlighted in our Hybrid Cloud

view. We believe this category should also see significant

adoption among enterprises.

Bottom-line and Stock Impacts: Given the

aforementioned findings, EQIX, DLR, COR, SWCH,

QTS, ANET, FFIV, CSCO, and JNPR in our coverage

are best positioned. However, strong execution will

be required to win enterprise business, a feat that

only some of the above names posses.

45%33%

29%

28%

26%39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Now Year-end 2022

Both SaaS and IT infrastructure SaaS-only IT infrastructure only

14

Data Center Industry Surveys (Published March 2021)Industry Surveys Suggest Public Cloud Demand is Shifting Towards Hybrid and Multi-cloud Approaches, With IT Budgets Allocating Increasing Spend to Off-prem.


Data Centers


13

18

21

0

5

10

15

20

25


Survey Question: Approximately, how many cloud service providers does your organization currently use, and how many do you expect to be using by year-end 2022?

Survey Question: Approximately, what percent of your cloud service providers are used for SaaS or IT infrastructure now, and what do you expect by year-end 2022?

Enterprises are increasing the number of Cloud SPs they

are using and we expect the number of Cloud SPs they are

using to inflect even higher by 2023E. Note, when the numberof Cloud SPs increases, this does not mean that Public Cloudincreases, but the number of providers that offer their services in acloud native consumption model is increasing. This data point

complements the architecture data points highlighted on the priorslide.

As the number of Cloud SPs used by enterprises increases,

enterprises are using Cloud SPs for specific services,

capabilities, and tools. Today 45% of enterprises are using the sameprovider for Both SaaS and IT Infrastructure, but by the end of 2022 this

goes down to 33% and 39% of Cloud SPs will be IT Infrastructure only.Differentiation among Cloud SPs is the next competitive frontier formajor providers. As the number of providers and offerings increase, thisis a positive reinforcing cycle for the MTDC industry, and exceptionallybetter for interconnection dense players.

13% 1%0%

47%

16%9%

34%

41%44%

6%

42% 47%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


1 2 to 4 5 to 9 10+

30% 33%25%

35%37%

45%

35% 30% 30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


On-premises data centers Colocation data centers Cloud SP data centers

52%

64%70%

0%

10%

20%

30%

40%

50%

60%

70%

80%


14%

18%

22%

0%

5%

10%

15%

20%

25%


15

Data Center Industry Surveys (Published March 2021)Industry Surveys Suggest Big Shift to Colocation DCs, Driven by Hybrid/Multi cloud.


Data Centers


64% of IT Racks Deployed in Colocation DCs by YE 2022 from 52%

Today. We Est. 70% by 2023E.

18% of Total IT Budgets for Colocation Expenses by YE 2022 from 14%

Today. We See 22% by 2023E Driven by Hybrid Cloud Architecture Shift.

For IT Workload Placements, Colocation to Take 45% of Total Share by

2023E, Up From 35% Today.

For Number of DCs in Use, by YE 2022 42% of Enterprises Expected to

be Deployed in 10+ DCs, Moving to 47% by 2023E

23%

11%

21%

28%

44%

26%

0%

10%

20%

30%

40%

50%

60%

EQIX DLR CONE COR SWCH QTS

Re

ve

nu

e M

ix (

4Q

20

20

Re

su

lts)

Cloud/IT Network Content Enterprise/Fins* Healthcare* Gov./Utilities* Education*

16

Enterprise Remains UnderpenetratedAs of 4Q 2020 Data Center Operator Results, Enterprise Revenue Mix Remains Relatively Low for Key Interconnect Dense Players EQIX, DLR, COR, and SWCH.


Data Centers

Source: Company data, Credit Suisse Estimates. Note: Content Category Credit Suisse Estimated for COR and CONE.

Following 4Q 2020 data center leasing and sector performance results, we continue to believe that there is a sizeable opportunity for the data center operators to

attract enterprise customers, including Financial Services, Government, Healthcare, Retail, Education, Industrial and other customer categories. The average percent

of revenue from Enterprise customers in 4Q 2020 across the major data center operators was ~25% of total revenues whereas the cloud mix was ~36%,

highlighting the potential revenues mix ahead since MTDCs are geared broadly to overall IT needs, but should be indexed more to Enterprise customers over time

given their hybrid cloud plans and their ramp in deployments to colocation environments (click: highlighted in the survey data points slide). Based on our estimates,

the Government, Healthcare, and Education industries alone make-up ~10% of data center operator revenues. We believe these industries will be data center

operator focus areas in 2021E, in addition to the already heavy financial services customer focus, assisting them in adopting the latest technologies for cloud,

connectivity, and edge application infrastructure.

17

Data Gravity to Intensify Over Next Four YearsIncreasing Digitization of Enterprise Workflows Driving Multi-year Growth.


Global Data Gravity Intensity By Industry (Gigabytes Per Second) Banking/Financial Services Sector Data Intensity to Grow Fastest

DLR’s Data Gravity Index Score utilizes data from 2000 global enterprises across 53 metros and 23 industries. The score measures the intensity and gravitational

force of enterprise data growth and is measured in gigabytes per second, providing a relative proxy for measuring data creation, aggregation and processing.

According to DLR’s forecast, total data gravity intensity (Gigabytes/second) is expected to grow at a 139% CAGR from CY20-24, highlighting that enterprises

will continue to increase their digital infrastructure at an accelerating pace, a secular trend that will benefit both sides of our coverage,

communications infrastructure and networking equipment. Examining the individual sectors, we highlight that the banking & financial services sector’s datagravity intensity is expected to grow the quickest over the next four years at a 144% CAGR from CY20-24.

Source: DLR Data Gravity Index. 2020.

1.1

1.4

1.6

5.5

7.0

7.3

36.8

37.8

49.5

180.5

244.2

257.1

0.0 50.0 100.0 150.0 200.0 250.0

Pharmaceuticals & Chemical

Mining & Natural Resources

Retail

Professional Services

Insurance

Manufacturing

Gigabytes per Second

2024 2020

23.5

866.7

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

2020 2024G

igabyt

es

per

Seco

nd

Data Centers

Cloud Service Provider Market

($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 13-'18 19-'24

Infrastructure as a Service (IaaS) 30,525 33,906 42,348 58,601 76,459 95,579 112,684 126,395 136,439 143,315 27.1% 13.4%

Y/Y Change 17.2% 11.1% 24.9% 38.4% 30.5% 25.0% 17.9% 12.2% 7.9% 5.0%

Cloud as a Service (CaaS) 6,419 10,191 16,496 27,150 39,376 55,507 70,957 83,211 91,543 96,632 69.9% 19.7%

Y/Y Change 70.2% 58.8% 61.9% 64.6% 45.0% 41.0% 27.8% 17.3% 10.0% 5.6%

Platform as a Service (PaaS) 5,697 9,343 16,509 26,563 39,138 52,783 65,299 75,088 81,834 86,086 82.4% 17.1%

Y/Y Change 77.4% 64.0% 76.7% 60.9% 47.3% 34.9% 23.7% 15.0% 9.0% 5.2%

Software as a Service (SaaS) 47,498 54,909 59,082 82,258 97,787 122,808 147,369 169,439 187,744 201,938 32.4% 15.6%

Y/Y Change 53.0% 15.6% 7.6% 39.2% 18.9% 25.6% 20.0% 15.0% 10.8% 7.6%

Total CSP Revenue 90,138 108,350 134,436 194,572 252,760 326,676 396,308 454,133 497,559 527,971 36.5% 15.9%

Y/Y Change 40.7% 20.2% 24.1% 44.7% 29.9% 29.2% 21.3% 14.6% 9.6% 6.1%

CAGR

18

Cloud SP vs. MTDC Market Growth Through 2024E


Data Centers

Source: Omdia, Credit Suisse Research.

MTDC Market Is Growing at a 7.9% CAGR from $29bn in 2019 to $41bn in 2024E: Based on market projections, the MTDC market is projected to maintainthe 7.9% CAGR level not only through 2024 but beyond, driven by a combination of factors including lease price escalators (average at ~2% per year), higher

demand for power (that is being passed through to the customer), space, and interconnectivity (cloud on-ramps, SDN on-ramps, Software Co. Pops) to accelerate

processes. We note that MTDC revenues comprise of colocation revenues and interconnection revenues. Given MTDC market’s relevance to the public cloud

ecosystem, we believe our 7.9% CAGR estimate may prove conservative especially after considering the overall Cloud SP market is 15.9% CAGR

though 2024E (see above). Note: MTDC forecasts above do not include M&A/divestitures from non-MTDC industries selling into MTDC (like Enterprise DCs).

Cloud Service Provider Revenues Are Growing at a 15.9% CAGR from $253bn in 2019 to $528bn in 2024E: The most significant attributor to the growth ofData Center REITs (MTDCs) in the past few years has been its indexation to rapid growth of the Cloud Service Providers, building hyperscale data center campuses

and interconnecting latency sensitive applications, largely driven by the major Big5 public cloud players Amazon Web Services (AWS), Microsoft Azure, Google Cloud

(GCP), Oracle Cloud, and IBM Cloud. Even though MTDCs are growing at ~50% the rate of CSPs, we do not see the growth rate decelerating within the

next 10yrs, largely driven by overall cloud infrastructure demand that is growing faster.

Multi-Tenant Data Center Market

($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 13-'18 19-'24

Colocation 16,314 19,121 20,968 23,637 26,431 27,850 29,399 31,370 33,793 36,579 11.6% 6.7%

Y/Y Change 8.0% 17.2% 9.7% 12.7% 11.8% 5.4% 5.6% 6.7% 7.7% 8.2%

Interconnection 1,643 1,900 2,163 2,463 2,761 3,080 3,451 3,862 4,341 4,902 13.3% 12.2%

Y/Y Change 10.8% 15.7% 13.8% 13.9% 12.1% 11.6% 12.1% 11.9% 12.4% 12.9%

Total MTDC Revenue 17,957 21,021 23,131 26,101 29,192 30,930 32,850 35,232 38,134 41,481 11.8% 7.9%

Y/Y Change 8.2% 17.1% 10.0% 12.8% 11.8% 6.0% 6.2% 7.3% 8.2% 8.8%

Total MTDC % of IaaS 58.8% 62.0% 54.6% 44.5% 38.2% 32.4% 29.2% 27.9% 27.9% 28.9%

Interconnection Attach To Colo 10.1% 9.9% 10.3% 10.4% 10.4% 11.1% 11.7% 12.3% 12.8% 13.4%

CAGR

All Others, 38%

Amazon, 30%

Microsoft, 14%

Google, 5%

Alibaba, 4%

China Telecom, 3%

IBM, 2%

SAP, 2%

All Others Amazon Microsoft Google Alibaba China Telecom IBM SAP

19

MTDC and Cloud SP Market Share (as of 2H20)EQIX/DLR Remain Dominant Forces, Expected to Advance Further with Expanded Global Reach via Recent M&A.


Data Centers

Source: Omdia, Credit Suisse Research

EQIX is the Largest DC In a Very Fragmented Industry AWS Remains the Dominant CSP, But Azure is Gaining Ground

Colocation Market Share: Digital Realty’s acquisition of InterXion raised its share to ~13% on a combined basis, behind the leading colocationprovider, Equinix (~19%). That said, the industry still remains significantly fragmented, with many private colocation providers around the world. Webelieve consolidation is only expected from a base of ~500 individual operators.

Cloud Service Provider Market Share (IaaS and CaaS Only): For cloud service providers, Amazon’s AWS unit remains the largest industryconstituent, but Microsoft (Azure), Google (GCP), and Alibaba (Alibaba Cloud) are all focusing on growing their cloud platforms, in addition to a numberof other software-focused companies with upstart platforms. Notably, most enterprise customers want a variety of public cloud service providers, forcingformidable runner-ups in the CSP sector. For now, AWS, MSFT, and Google are ~50% of the CSP market.

*IaaS & CaaS only

Equinix, 19%

Digital Realty, 13%

China Telecom, 4%

CyrusOne, 3%

NTT, 3%

Cyxtera, 2%

China Unicom, 2%

Coresite, 2%

GDS, 2%

Switch, 2%QTS, 2%

All others, 46%

Equinix Digital Realty China Telecom CyrusOne

NTT Cyxtera China Unicom Coresite

GDS Switch QTS All others

20

MTDC Versus Cloud Data CentersCloud Service Providers and MTDC (Colocation) Providers are “Natural Allies, Not Competitors,” With the Rate of Cloud SP Outsourcing Increasing Overtime.


Data Centers

Multi-Tenant Data Center (Colocation) Cloud Service Provider (CSP) Data Center

A CSP data center is generally not directly accessible to the public

and connections to the cloud are made typically through colocation.

Much of a CSP’s data center is customized and tend to be shrouded in

secrecy relative to a colocation facility. These facilities can also be muchlarger and operate at higher capacities than a typical data center. CSPs tend

to be selective with their locations and customers are not allowed in to installtheir own servers.

Pros (Pure Cloud Play): Great option for organizations to focus ondelivering solutions, more cost effective, improvements in rolling out cloud

services quickly, lowers I.T. operating costs, major driver for outsourcing,

outsourcing without losing secure information, and the host is responsible for

HVAC, electrical power, and I.T. equipment

Cons: Diminished control of I.T. resources, requires SLA agreements,requires OPEX costs, platform and equipment dependent, all hosts not equal

security concerns, potential compliance issues regarding security regulations

Colocation is about more than just data center facilities. Somecolocation data centers offer a host of services including managed I.T. to the

hybrid cloud. They can also provide greater power density, which is key to

quickly scaling and supporting new technologies. Several providers even offer

a direct connection to the top public cloud providers such as AWS, GCP,Azure, etc.

Pros: Great option for the service provider, much cheaper than building owndata center, data and electrical power redundancies, data centerinfrastructure management (DCIM), infrastructure professionals for technical

on-site support (remote hands), physical and logical security, interconnection

benefits

Cons: Managing equipment technologies can be burdensome, requires I.T.staffing, dependent on hosts’ network connections, electrical power, HVAC,requires leasing, costly OPEX and CAPEX, I.T. infrastructure become more

complex to manage

21

Interconnection Growth ExtendsNetwork Interconnection Proliferation Remains a Significant Driver, Led by Telecoms, Clouds, and Digital Media Industries…


Examining EQIX’s global forecast data, we can see that interconnection installed bandwidth capacity (Tbps) is expected to grow at a 45% CAGR from CY19-23,

a positive dynamic for both comm. infrastructure and equipment. We highlight that the telecom & government sectors’ bandwidth capacity are forecasted to expand thefastest over the next three years growing both at a 48% CAGR from CY19-23.

Source: EQIX GXI Volume 4. 2020.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2019 2020 2021 2022 2023

Inte

rconnection I

nst

alle

d B

andw

idth

Capaci

ty (

Tbps)

Other

Government & Education

Healthcare & Life Sciences

Wholesale & Retail Trade

Energy & Utility

Business & Professional Services

Manufacturing

Securities & Trading

Banking & Insurance

Content & Digital Media

Cloud & IT Services

Telecommunications

Data Centers

22Sami Badri | 212-538-1727 | [email protected]

Data Centers

Interconnection continues to gain importance to colocation

providers, as shown in the chart to the right. As data integration,Point of Presence (PoP) cross connection, and low latency

capabilities become even larger priorities for enterprises, we expect

the interconnection market to continue to outpace colocation growth

by 400+ bps. In light of this view, we are positive on EQIX and

SWCH mainly (and would highlight COR’s and DLR’s direct

indexation to this trend as well given COR legacy and DLR’s recentinterconnection dense acquisitions, like INXN/Westin Building),

given their established interconnection and colocation revenues,

boasting robust customer ecosystems across cloud, service provider

and enterprise. We highlight key data center metrics in the following

slides that support our view that interconnection density should

increase in coming years, partially driven by a significant enterprise

customer transition to deploy Hybrid cloud environments and reap

direct connect benefits.

Interconnection Revenues Have Outpaced Colo Revenues Since

2016 and This Momentum is Not Expected to Slow


Interconnection Market Across Regions

($ millions) 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 15-'18 19-'24

Americas Interconnection Revenue 931 1,088 1,255 1,397 1,529 1,692 1,882 2,091 2,334 2,617 14.5% 11.4%

Y/Y Change - 16.9% 15.3% 11.4% 9.4% 10.7% 11.2% 11.1% 11.6% 12.1%

Asia Interconnection Revenue 332 404 450 543 652 743 850 971 1,113 1,282 17.9% 14.5%

Y/Y Change - 21.7% 11.5% 20.7% 20.0% 13.9% 14.4% 14.2% 14.7% 15.2%

EMEA Interconnection Revenue 380 408 458 522 580 645 719 800 894 1,003 11.2% 11.6%

Y/Y Change - 7.3% 12.2% 14.1% 11.0% 11.1% 11.5% 11.2% 11.7% 12.2%

Total Interconnection Revenue 1,643 1,900 2,163 2,463 2,761 3,080 3,451 3,862 4,341 4,902 14.5% 12.2%

Y/Y Change - 15.7% 13.8% 13.9% 12.1% 11.6% 12.1% 11.9% 12.4% 12.9%

CAGR

10%

10% 10%10%

11%

12%

12%13%

13%

8%

9%

10%

11%

12%

13%

14%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E

Inte

rco

nne

ctio

n A

ttach

to

Co

lo

Co

lo &

In

terc

on

ne

ctio

n R

eve

nu

e (

$ m

il)

Colocation Interconnection Interconnection Attach to Colo

Interconnection Growth Through 2024EGrowth Across Regions Should Also Be Strong, Led by Asia. Importantly Interconnection Attach Rates Expected to Increase Through 2024E, Driven by Cloud and Enterprise Activity Within IT Dense Data Center Facilities.

Interconnection Revenues

($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021E 2Q 2021E 3Q 2021E 4Q 2021E

EQIX-Global $195 $198 $202 $207 $213 $219 $227 $235 $242 $249 $261 $271 $278 $285 $293 $300

y/y growth 31.7% 19.3% 12.6% 10.3% 9.1% 10.8% 12.2% 13.4% 13.8% 13.9% 15.1% 15.2% 15.0% 14.2% 11.8% 10.4%

Interconnection Mix 16.0% 15.7% 15.7% 15.8% 15.6% 15.8% 16.2% 16.6% 16.8% 17.0% 17.2% 17.3% 17.7% 17.6% 17.6% 17.6%

EQIX-Americas $129 $132 $134 $137 $139 $142 $146 $149 $151 $153 $157 $161 $165 $169 $172 $174

y/y growth 28.2% 13.3% 7.9% 7.2% 7.2% 8.2% 9.0% 9.1% 8.9% 7.7% 7.2% 7.3% 9.4% 10.1% 9.4% 7.8%


DLR $61 $62 $63 $64 $68 $64 $65 $66 $70 $85 $86 $86 $89 $92 $94 $97

y/y growth 7.2% 6.0% 4.9% 5.9% 11.1% 4.0% 4.1% 2.8% 2.4% 33.0% 31.3% 32.0% 28.3% 8.6% 12.0% 14.8%


COR $17 $17 $18 $18 $18 $19 $19 $19 $20 $21 $21 $22 $21 $22 $23 $25

y/y growth 14.1% 13.7% 9.3% 10.9% 11.2% 7.8% 7.8% 8.0% 9.1% 11.3% 10.8% 11.4% 9.5% 8.7% 15.8% 17.3%


CONE $10 $10 $10 $11 $11 $12 $13 $13 $13 $14 $15 $15 $15 $16 $16 $16

y/y growth 20.5% 18.8% 13.3% 17.4% 15.5% 19.8% 24.5% 20.4% 17.9% 14.9% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%


QTS $7 $7 $9 $8 $8 $9 $10 $10 $10 $10 $11 $13 $11 $12 $12 $14

y/y growth 15.0% 15.0% 15.0% 17.6% 15.0% 15.0% 15.0% 15.0% 15.9% 17.0% 8.2% 15.0% 15.0% 15.0% 15.0% 15.0%


SWCH $4 $4 $4 $4 $4 $4 $4 $5 $5 $5 $5 $5 $5 $6 $6 $6

y/y growth 9.6% 10.9% 5.2% 9.7% 15.6% 3.2% 17.6% 16.8% 16.5% 37.2% 21.4% 21.2% 21.8% 16.7% 19.1% 18.5%


Total InterC Revenues $293 $298 $305 $312 $323 $327 $338 $347 $360 $385 $398 $411 $419 $432 $445 $459

y/y growth 10.1% 9.6% 10.8% 11.2% 11.4% 17.9% 17.8% 18.5% 16.6% 12.2% 11.7% 11.6%


23

Interconnection Market GrowthInterconnection Growth Expected to Continue at High Growth and High Attach Rates Over The Next Year with EQIX-AMER and COR Leading.


Data Centers

Source:, Credit Suisse estimates, Company data. Total InterC Revenues excludes EQIX-Americas as it is accounted for in EQIX-Global.

Interconnection Will Continue to be a Dominant Driver in the MTDC Industry: Interconnection revenue mix has gradually increased, while mostly sustainingdouble digit growth, and we project this trend to continue into 2021, with interconnection mix approaching 13%. EQIX-Americas, EQIX-Global, and COR have notably

higher exposure to interconnection revenues than the peer group, but every MTDC has grown its interconnection mix from 2018 to 2020. Note, CONE and QTS

forecasts are high comparably but off very low basis from a % of revenue perspective.

0

20

40

60

80

100

120

140

160

Nu

mb

er

of

Clo

ud

On

-Ram

ps (

#)

2017 2018 2019 2020

24

On-Ramps Remain Core to MTDC Scale-outCloud On-Ramps Have Reached Critical Mass Deployment Within MTDCs.


Data Centers

Source: Credit Suisse Estimates, Cloudscene (12.30.2020), Company data.

On-Ramp 2020 Y/Y Increases:

AMZN +6% Y/Y

GOOGL +29% Y/Y

IBM +24% Y/Y

MSFT +57% Y/Y

ORCL +43% Y/Y

RAX +30% Y/Y

BABA +56% Y/Y

VMW -11% Y/Y

0

100

200

300

400

500

600

700

800

Nu

mb

er

of

On-R

am

ps (

#)

2017 2018 2019 2020

25

On-Ramps Remain Core to MTDC Scale-outSDN On-Ramps Have Also Scaled Significantly Within MTDCs, Elevating the Strategic Importance of MTDC Nodes.


Data Centers

Source: Cloudscene, Company data, CS estimates for Megaport & PCCW 2017

SDN On-Ramp Increases:

Megaport +27% Y/Y

PacketFabric +21% Y/Y

PCCW (Console Connect) +76% Y/Y

185

1,6002,259

5,041

221

2,000

2,755

6,567

245

2,7003,344

8,735

300

3,6004,069

11,561

317

4,6004,863

13,914

366

5,700 5,767

16,712

385

5,8006,333

18,145

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Data Centers (#) MRR ($) Ports (#) Total Services (#)

Gro

wth

Tre

nd

s

Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20

26

On-Ramps Are Key to Hybrid Cloud BuildoutsSDN Fabrics Have Matured, but Hybrid Cloud Adoption Has Room to Run.


Data Centers

Source: Company data, Credit Suisse Research.

Note: Total services comprise of Ports, Virtual Cross Connections (VXCs), and Internet Exchange (IX)

Although still in their early stages of growth, network fabric businesses are now critical to the data center market, as CIOs increasingly look to

buildout hybrid cloud infrastructure versus exclusively public or private clouds. Megaport’s hyper growth is beginning to decelerate slightly, as shown

below, and this is a positive showing industry maturity/standardization of connectivity; enterprises are increasingly using interconnection services through MTDCs.

Key Metric Growth is Beginning to

Decelerate, Signaling a

Stabilization/Maturity

0

20

40

60

80

100

120

140

160

# o

f P

oP

s

2019 2020

27

On-Ramps Remain Core to MTDC Scale-outCDN/System Integrators/SaaS Company PoPs/On-Ramps Major Drivers of Further Enterprise Colocation Adoption. These Service Providers Are Fueling Further MTDC Infrastructure Adoption, Accelerating Their Own Business’s Growth.


Data Centers

Enterprises Are Seeking Application

Service Ecosystems; Data Centers with One-Stop-Shops for all application consumption.

Expect PoP/On-Ramp Proliferation to

Continue Through the Next Five Years.

Source: Credit Suisse Estimates, Cloudscene (12.30.2020), Company data.

28

Cloud On-Ramps Versus SDN On-Ramps


Data Centers

Source: Cloudscene, Credit Suisse Research.

Cloud On-Ramps Software Defined Networking (SDN)

Similar to Cloud On-Ramps, SDN fabric service providers, such ascompanies like Megaport and PacketFabric, enable dynamic, real-time connectivity services between major carrier-neutral colocationcenters. This allows enterprises to virtually connect their IT

infrastructures through internet routing tables rather thanpurchasing millions of dollars’ worth of IT equipment, and relievesenterprises of network issues, IT spending budget constraints, andengineering expertise required to launch a complex technology, likesoftware-defined networking.

What is a Cloud On-Ramp? What is a SDN Fabric?

A Cloud On-Ramp is when an AWS, a GCP, an Azure, an IBMSoftLayer, or Oracle Cloud leases a small sized area (10-20cabinets) within a MTDC to establish a Point of Presence or "On-

Ramp" to make it very easy and seamless for other tenants withinthat facility to directly connect into public cloud platforms. Thisdrastically reduces connectivity bottlenecks, constraints, andgeneral engineering issues. Cloud on-ramps should not beconfused with a public cloud data center facility, since that is a

completely different type of data center deployment and may alsobe deployed into an MTDC.

Cloud On-Ramps and SDN Fabrics provide greater incentives for enterprises to use MTDCs, drawing in enterprise clients and

interconnection networks. They act as enablers to further push the MTDC to new heights.

Hyperscale CapEx CAGR (%)

($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22

FB $1,831 $2,523 $4,491 $6,732 $13,980 $15,102 $15,115 $22,322 $22,626 66.2% 12.8%

AMZN (AWS) $4,295 $4,681 $5,193 $9,190 $9,783 $13,058 $15,738 $15,918 $16,395 22.9% 13.8%

GOOGL $10,959 $9,915 $10,183 $13,184 $25,139 $23,548 $22,281 $25,688 $26,376 23.1% 1.2%

MSFT $5,294 $6,696 $10,208 $11,400 $15,800 $18,000 $20,487 $24,847 $24,552 31.4% 11.6%

ORCL $801 $1,606 $1,628 $1,986 $1,736 $1,520 $1,968 $2,669 $2,144 21.3% 5.4%

IBM $3,740 $3,579 $3,567 $3,229 $3,395 $2,286 $2,641 $2,499 $2,535 -2.4% -7.0%

Total U.S. CapEx $26,920 $29,000 $35,270 $45,721 $69,833 $73,514 $78,231 $93,942 $94,629 26.9% 7.9%

Y/Y Change 7.7% 21.6% 29.6% 52.7% 5.3% 6.4% 20.1% 0.7%

BABA $1,244 $1,705 $2,608 $4,502 $7,397 $4,784 $5,522 $8,520 $11,958 56.2% 12.8%

Tencent $1,077 $1,601 $2,823 $4,736 $8,170 $7,532 $8,644 $8,644 $9,944 66.0% 5.0%

BIDU $1,036 $1,237 $1,582 $2,064 $3,380 $1,775 $2,005 $2,005 $2,413 34.4% -8.1%

Total Chinese CapEx $3,357 $4,543 $7,013 $11,302 $18,947 $14,091 $16,171 $19,169 $24,315 54.1% 6.4%

Y/Y Change 35.3% 54.4% 61.2% 67.6% -25.6% 14.8% 18.5% 26.8%

Total Hyperscale CapEx $30,277 $33,543 $42,283 $57,023 $88,780 $87,605 $94,401 $113,112 $118,943 30.9% 7.6%

Y/Y Change 10.8% 26.1% 34.9% 55.7% -1.3% 7.8% 19.8% 5.2%

% of Revenue 6.8% 6.7% 7.6% 8.2% 9.9% 8.4% 7.4% 7.6% 7.1%

29

Outlook: Hyperscale Capex Spend GrowthHyperscale Capex Spending Growth Projected to Accelerate Meaningfully in 2021E; Best Growth Since 2018, When MTDCs Grew Revenues Rapidly.


Data Centers

Source: Factset, Credit Suisse Research. Tencent, Alibaba, Baidu are Consensus Estimates.

Hyperscale Capex

includes Capital Expenditure

investments into office space, I.T. equipment, data

center infrastructure, land, and other

major ticket items. Amazon Web Services and

Microsoft Capex figures include both Capex and Capital

Leases.

Hyperscale Capex is a leading indicator for the Multi-Tenant Data Center (MTDC) industry largely because ~half of all datacenter space, power, cooling, and interconnection historically has been outsourced to third party DCs (MTDCs) rather than built andmaintained by the hyperscale / cloud service providers themselves. Based on our discussions with industry professionals and MTDCconstruction data points, we expect this percent of outsourcing to be below 50% in 2021E versus the very high levels ofoutsourcing (60%+) seen in 2020E largely driven by better hyperscaler predictability and DC development in tier 2, 3, and newmarkets. For data center operators reliant on significant signings to maintain growth levels, this may be an issue, but for EQIX,COR, and SWCH, we view this as a relatively neutral impact, with some impact to DLR.

MTDC Leasing Backlog

($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020

DLR $126 $142 $148 $97 $144 $127 $99 $116 $122 $251 $229 $269

y/y growth 59.5% 121.9% 39.6% -16.4% 14.3% -10.6% -33.1% 19.6% -15.3% 97.6% 131.3% 131.9%

Annualized Revenues $2,977 $3,020 $3,076 $3,113 $3,258 $3,203 $3,226 $3,150 $3,293 $3,972 $4,099 $4,250

Backlog Intensity 4.2% 4.7% 4.8% 3.1% 4.4% 4.0% 3.1% 3.7% 3.7% 6.3% 5.6% 6.3%

QTS $54 $51 $59 $63 $55 $68 $80 $93 $101 $111 $131 $154

y/y growth 28.9% 29.3% 4.3% 33.8% 1.6% 32.7% 35.3% 48.6% 84.2% 63.3% 63.7% 65.9%

Annualized Revenues $455 $449 $449 $449 $451 $477 $501 $495 $505 $527 $550 $576


CONE $39 $85 $89 $54 $40 $24 $53 $52 $88 $97 $82 $101

y/y growth -11.3% 73.5% 140.8% 164.7% 1.0% -72.0% -41.1% -4.3% 122.8% 307.6% 56.2% 95.4%

Annualized Revenues $786 $788 $826 $885 $900 $1,006 $1,004 $1,016 $984 $1,026 $1,051 $1,074


COR $17 $21 $18 $14 $14 $30 $28 $20 $22 $19 $24 $21

y/y growth -33.9% -14.7% -25.5% -25.0% -19.0% 41.1% 62.3% 38.5% 64.0% -37.3% -16.9% 8.1%

Annualized Revenues $518 $546 $557 $557 $556 $572 $580 $584 $589 $602 $616 $620


SWCH - - - - $35 $26 $22 $37 $24 $24 $27 $50

y/y growth - - - - - - - - -31.4% -7.7% 23.2% 35.7%

Annualized Revenues - - - - $428 $446 $470 $482 $512 $508 $515 $511

Backlog Intensity - - - - 8.2% 5.8% 4.7% 7.7% 4.7% 4.7% 5.3% 9.8%

Total Backlog $236 $299 $314 $228 $287 $274 $282 $318 $357 $502 $492 $596

Y/Y Change 21.7% -8.3% -10.2% 39.3% 24.5% 82.8% 74.8% 87.7%


30

Outlook: High Demand Translated Into Peak BacklogsMTDC’s Have Been Key Beneficiaries of Growing Hyperscale Capex Spend, Driven by (1) Available Colocation Supply; (2) Increased Outsourcing by Large Cloud/Tech. Customers; and (3) High Growth Application Demand, Accelerated by COVID-19.


Data Centers

Backlog Intensity Above 2018 Highs:

MTDC backlogs grew materially in 2020,

and backlog intensity (backlog / last

quarter’s annualized revenue) has

maintained elevated levels. We expect

intensity to stay above ~6% through 2021

as capacity is built and then leases are

commenced over the following quarters,

driving continued revenue growth

momentum for MTDCs.

Reported Backlogs 8.5% of annualized

revenues driven by three key dynamics:

(1) MTDCs have developed or aredeveloping DC supply in markets where

large service providers/hyperscalers needed

the capacity; (2) MTDCs also benefited fromincreased outsourcing by hyperscale/cloud

providers (we estimate ~60%), enlarging

total leasing opportunities; and (3) Highgrowth applications, like Zoom Video, Public

Clouds (AWS, Azure, etc.), Video Games,and Other bandwidth intensive apps requiredMTDC customers to move fast and

accelerate expansion plans, benefiting the

MTDC industry.

2021E Outlook: Using history as a guidepost,

following the mid-2018 high backlog

intensity levels, 2019 was a year of

pronounced outperformance with strong

commenced leases, revenue growth, andfurther follow-on leasing activity,

strengthening the financial visibility and

supply chains of MTDCs. We expect

2021E to see similar characteristics as

2019, a year that several publicly traded

data centers outperformed market

indices and comparable asset classes.Source: Company data, Credit Suisse Research.

MTDC CapEx CAGR (%)

($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22

EQIX $660 $868 $1,113 $1,379 $2,096 $2,080 $2,283 $2,430 $2,695 33.5% 6.5%

DLR $805 $627 $654 $1,055 $1,262 $1,350 $1,937 $2,383 $2,481 11.9% 18.4%

QTS $292 $613 $452 $434 $601 $424 $838 $859 $749 19.8% 5.6%

CONE $284 $235 $731 $1,407 $1,329 $876 $902 $976 $985 47.1% -7.2%

COR $106 $157 $364 $187 $269 $401 $221 $205 $193 26.3% -8.0%

SWCH $130 $190 $287 $403 $276 $308 $347 $350 $323 20.6% 4.1%

INAP $74 $56 $46 $36 $42 $21 $21 $21 $20 -13.3% -17.0%

Total U.S. CapEx $2,351 $2,745 $3,648 $4,900 $5,874 $5,460 $6,550 $7,225 $7,447 25.7% 6.1%

Y/Y Change 16.8% 32.9% 34.3% 19.9% -7.1% 20.0% 10.3% 3.1%

GDS - - $144 $271 $634 $642 $1,235 $1,501 $1,393 - 21.8%

Chindata - - - - - - $382 $646 $609 - -

NextDC $103 $25 $101 $159 $283 $378 $398 $265 $252 28.6% -2.9%

Total Int'l CapEx $103 $25 $245 $430 $916 $1,020 $2,015 $2,412 $2,254 72.6% 25.2%

Y/Y Change -76.1% 891.7% 75.6% 113% 11.3% 97.6% 19.7% -6.6%

MTDC CapEx $2,583 $2,788 $3,870 $5,647 $7,288 $6,480 $8,565 $9,637 $9,700 29.6% 7.4%

Y/Y Change 7.9% 38.8% 45.9% 29.1% -11.1% 32.2% 12.5% 0.7%

31

Outlook: MTDC Capex Spend GrowthMTDC Capex Spend Decelerates in 2021E (Based on Current Estimates), Following Already Supportive 2020 Spend to Match Solid Demand, Which We Believe Reflects Significant Amount of Planned Space Coming Online Early in 2021E.


Data Centers

Source: Factset, Credit Suisse Research, Company Data. GDS and NXT-ASX are consensus estimates.

Multi-Tenant Data Center Capex Growth Forecasted to Slow: We believe this highlights (1) the cyclical nature of the industry, where overbuilding andpullbacks may occur; and (2) the maturation of the data center industry, which clearly grew significantly from 2015-2018. In light of this, we do believe there is

high likelihood that MTDCs end up revising up their capex plans as new deals come in, which is what our checks have revealed (more cloud deals expected).

Hyperscale CapEx CAGR (%)

($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22

FB $1,831 $2,523 $4,491 $6,732 $13,980 $15,102 $15,115 $22,322 $22,626 66.2% 12.8%

AMZN (AWS) $4,295 $4,681 $5,193 $9,190 $9,783 $13,058 $15,738 $15,918 $16,395 22.9% 13.8%

GOOGL $10,959 $9,915 $10,183 $13,184 $25,139 $23,548 $22,281 $25,688 $26,376 23.1% 1.2%

MSFT $5,294 $6,696 $10,208 $11,400 $15,800 $18,000 $20,487 $24,847 $24,552 31.4% 11.6%

ORCL $801 $1,606 $1,628 $1,986 $1,736 $1,520 $1,968 $2,669 $2,144 21.3% 5.4%

IBM $3,740 $3,579 $3,567 $3,229 $3,395 $2,286 $2,641 $2,499 $2,535 -2.4% -7.0%

Total U.S. CapEx $26,920 $29,000 $35,270 $45,721 $69,833 $73,514 $78,231 $93,942 $94,629 26.9% 7.9%

Y/Y Change 7.7% 21.6% 29.6% 52.7% 5.3% 6.4% 20.1% 0.7%

BABA $1,244 $1,705 $2,608 $4,502 $7,397 $4,784 $5,522 $8,520 $11,958 56.2% 12.8%

Tencent $1,077 $1,601 $2,823 $4,736 $8,170 $7,532 $8,644 $8,644 $9,944 66.0% 5.0%

BIDU $1,036 $1,237 $1,582 $2,064 $3,380 $1,775 $2,005 $2,005 $2,413 34.4% -8.1%

Total Chinese CapEx $3,357 $4,543 $7,013 $11,302 $18,947 $14,091 $16,171 $19,169 $24,315 54.1% 6.4%

Y/Y Change 35.3% 54.4% 61.2% 67.6% -25.6% 14.8% 18.5% 26.8%

Total Hyperscale CapEx $30,277 $33,543 $42,283 $57,023 $88,780 $87,605 $94,401 $113,112 $118,943 30.9% 7.6%

Y/Y Change 10.8% 26.1% 34.9% 55.7% -1.3% 7.8% 19.8% 5.2%

% of Revenue 6.8% 6.7% 7.6% 8.2% 9.9% 8.4% 7.4% 7.6% 7.1%

MTDC CapEx CAGR (%)

($ millions) 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 14-'18 18-'22

EQIX $660 $868 $1,113 $1,379 $2,096 $2,080 $2,283 $2,430 $2,695 33.5% 6.5%

DLR $805 $627 $654 $1,055 $1,262 $1,350 $1,937 $2,383 $2,481 11.9% 18.4%

QTS $292 $613 $452 $434 $601 $424 $838 $859 $749 19.8% 5.6%

CONE $284 $235 $731 $1,407 $1,329 $876 $902 $976 $985 47.1% -7.2%

COR $106 $157 $364 $187 $269 $401 $221 $205 $193 26.3% -8.0%

SWCH $130 $190 $287 $403 $276 $308 $347 $350 $323 20.6% 4.1%

INAP $74 $56 $46 $36 $42 $21 $21 $21 $20 -13.3% -17.0%

Total U.S. CapEx $2,351 $2,745 $3,648 $4,900 $5,874 $5,460 $6,550 $7,225 $7,447 25.7% 6.1%

Y/Y Change 16.8% 32.9% 34.3% 19.9% -7.1% 20.0% 10.3% 3.1%

GDS - - $144 $271 $634 $642 $1,235 $1,501 $1,393 - 21.8%

Chindata - - - - - - $382 $646 $609 - -

NextDC $103 $25 $101 $159 $283 $378 $398 $265 $252 28.6% -2.9%

Total Int'l CapEx $103 $25 $245 $430 $916 $1,020 $2,015 $2,412 $2,254 72.6% 25.2%

Y/Y Change -76.1% 891.7% 75.6% 113% 11.3% 97.6% 19.7% -6.6%

MTDC CapEx $2,583 $2,788 $3,870 $5,647 $7,288 $6,480 $8,565 $9,637 $9,700 29.6% 7.4%

Y/Y Change 7.9% 38.8% 45.9% 29.1% -11.1% 32.2% 12.5% 0.7%

32

Outlook: The Case for a 2022E “Super-cycle”Drivers: (1) Hyperscale Capex Spend Growth to Accelerate and Remain Elevated; (2) Meanwhile MTDC Capex Declining in 2021E (for now) and Marginally Increasing; (3) Construction Intensity at Trough (~3%); (4) High Data Growth Expected.


Data Centers

Source: Credit Suisse Research, FactSet, Equinix GXI Volume 4.

6.8%

3.6%

6.2%

3.7%

3.0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Co

nst

ruct

ion

Inte

nsi

ty (

%)

DC

Inst

all B

ase

(in

Meg

aWat

ts)

Data Center Install Base Under Construction Construction Intensity

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2019 2020 2021 2022 2023

Inte

rconnection I

nst

alle

d B

andw

idth

Capaci

ty (

Tbps)

Other

Government & Education

Healthcare & Life Sciences

Wholesale & Retail Trade

Energy & Utility

Business & Professional Services

Manufacturing

Securities & Trading

Banking & Insurance

Content & Digital Media

Cloud & IT Services

Telecommunications

(1) Hyperscale Capex Spend Accelerating and Remaining High

(2) MTDC Capex Growth Decelerating Into 2021E and 2022E

(3) MTDC Construction Intensity at Trough in 3Q 2020

(4) Installed Bandwidth Expected to Surge 45% CAGR thr. ’23E

Average Power Rates (cents/kWh) 2014 2015 2016 2017 2018 2019 2020 Trendline Total Inventory (MW) CS Market Tier

North America

Atlanta 4.7 4.8 4.8 4.8 4.7 4.7 4.5 270 Tier 2

Austin and San Antonio 7.0 7.2 7.4 7.4 7.2 7.2 7.3 145 Tier 2

Boston 18.0 22.0 20.0 16.0 15.0 14.5 14.5 160 Tier 3

Chicago 7.0 6.8 6.5 6.5 6.0 5.8 5.8 621 Tier 1

Dallas/Fort Worth 5.8 5.6 5.4 4.5 4.3 4.2 4.2 596 Tier 1

Denver 7.5 7.4 7.1 7.1 7.2 7.2 7.2 102 Tier 2

Houston 6.6 6.5 6.5 6.5 6.5 6.5 6.5 142 Tier 3

Los Angeles 13.5 13.5 14.5 14.5 14.5 14.5 14.5 230 Tier 1

New Jersey 9.0 9.0 8.5 8.5 8.4 8.6 8.3 410 Tier 1

New York City 16.1 15.5 14.6 14.3 13.6 13.5 13.3 152 Tier 2

Northern California 11.9 12.7 12.9 13.4 13.4 12.5 12.6 468 Tier 1

Northern Virginia 5.7 5.7 5.2 5.2 5.2 5.2 5.2 2105 Tier 1

Pacific Northwest 4.7 4.8 6.2 6.4 6.6 6.8 7.0 365 Tier 2

Phoenix 6.7 6.7 6.6 6.4 6.4 6.4 6.3 327 Tier 2

Salt Lake City - - 5.8 5.8 5.8 5.8 5.6 80 Tier 3

Greater Montreal Area* 3.5 3.5 3.6 3.7 3.9 N/A Tier 3

Greater Toronto Area* 13.8 9.2 13.0 14.6 12.5 N/A Tier 2

Western Canada (Vancouver / Calgary)* 6.8 7.3 7.5 7.5 8.0 N/A Tier 3

Europe

Amsterdam 8.1 8.1 9.2 9.2 9.2 10.3 11.4 426 Tier 1

Dublin 12.7 12.7 13.9 13.9 13.9 16.0 17.0 161 Tier 2

Frankfurt 17.4 17.4 17.4 17.4 17.4 20.0 23.4 443 Tier 1

London 18.0 18.0 18.9 16.2 19.8 20.6 23.6 768 Tier 1

Paris 9.0 10.0 11.0 12.0 13.0 14.0 14.7 271 Tier 1

33

U.S. Data Center Markets: Power Rate TrendTier 1 Data Center Markets Largely Have Improving Power Rates and Very Large Data Center Inventories, Creating a Continuously Reinforced Cycle of Growth, Connectivity, and Follow-on Infrastructure Investments.


Data Centers

Source: JLL Research, Credit Suisse Research.

Exception to Tier 1 Market Trend: Los Angeles, European Markets. *Credit Suisse Estimates for cents/kWh

20.7x20.0x

18.2x 17.8x 17.0x

15.4x

5.0x

7.0x

9.0x

11.0x

13.0x

15.0x

17.0x

19.0x

21.0x

23.0x

25.0x

EQIX DLR COR CONE QTS SWCH

EV

/EB

ITD

A M

ult

iple

s

2021E 2022E

12.6%

6.5%

9.1%

6.0%

8.5%

6.1%

10.8%

15.2%

11.1%12.5%

7.2%7.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

QTS SWCH EQIX COR CONE DLR

Ad

j. E

BIT

DA

Gro

wth

2021E 2022E

55.2%53.8% 53.0%

51.8% 52.0%

46.9%

55.5%55.0%

54.0%51.9% 52.1%

47.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

QTS DLR COR CONE SWCH EQIX

Ad

j. E

BIT

DA

Marg

in

2021E 2022E


Data CentersData Center Fundamentals (Margins/Growth)Modest Improvement in DCs EBITDA Margins, with Double Digit Growth.

Source: Credit Suisse estimates, Factset estimates, Company Data.

O/P SWCH to Grow Adj. EBITDA Ahead of MTDC Avg.Adj. EBITDA Margins – QTS, DLR Lead MTDC Group

Data Center Group EBITDA Comments:

• We forecast Data Centers to grow adjusted EBITDA by 8.1% onaverage in 2021E, and to follow it up with 10.7% growth in 2022E.Among the peer group, we expect QTS and SWCH to see the fastestgrowth over the next two years, while CONE and DLR trail the rest ofthe group.

• While Data Centers continue to deliver double digit adjusted EBITDAgrowth, we project them to roughly maintain margins through 2022,with the peer group achieving an average margin of 52.6% in 2022E.We expect COR to see the largest margin improvement, while DLRsees slight contractions, mostly because of the InterXion integration.

• On an EV/EBITDA basis, EQIX continues to lead the Data Centers,being rewarded for its scale and reach. Meanwhile, SWCH trades at anotable discount vs. peers despite fairly strong metrics.

SWCH Trades at a Discount Despite Solid Growth & Margins

24.0x

21.3x19.9x

19.0x

17.3x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

EQIX QTS COR DLR CONE

P/A

FFO

S M

ult

iple

s

2021E 2022E

27.2%

24.2%

3.8%6.1%

1.5%

9.1% 9.5%

13.9%

8.0%

3.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

EQIX DLR COR QTS CONE

FFO

/S

hare

Gro

wth

2021E 2022E

9.4%

11.8%

2.6%1.4%

0.7%

11.4%

7.7%

14.0%

6.4%

1.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

EQIX QTS COR DLR CONE

AFFO

/S

hare

Gro

wth

2021E 2022E


Data CentersData Center Fundamentals (FFOS/AFFOS)We Expect DCs to Broadly See Robust FFOS, AFFOS Growth Through 2022E.

Source: Credit Suisse Research estimates, Company Data.

FFO/Share Growth – O/Ps EQIX, DLR, COR to Grow Ahead AFFO/Share Growth – EQIX, QTS Robust, CONE Lags

DLR & CONE Cheapest on FY22 AFFOS Basis, EQIX Leads Data Center Group FFOS/AFFOS Comments:

• We forecast Data Centers to grow FFO/share by 12.6% on average in2021E, and to follow it up with 8.8% growth in 2022E. Among thepeer group, we expect EQIX and DLR to see the fastest growth overthe next two years, while CONE lags the group average.

• On AFFO/share, we project Data Centers to grow by 5.2% on averagein 2021E, and by 8.2% in 2022E. We expect EQIX and QTS to leadthe peer group in AFFO/share growth through 2022E, and we expectCONE to again see the slowest growth.

• On a Price/AFFOS basis, EQIX leads the Data Center group, whichwe believe is warranted due to its scale, interconnection strength,diversification, and growth profile. DLR and CONE trade at a discountvs. peers, but we view DLR should trade closer to EQIX’s multiplegiven its aggressive diversification into retail colocation and potentialROIC improvement.

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2017 2018 2019 2020 2021E

Net

De

bt/

EBIT

DA

(Le

vera

ge)

Wei

ghte

d A

vera

ge C

ost

of

De

bt

EQIX Leverage DLR Leverage COR Leverage CONE Leverage QTS Leverage SWCH Leverage

EQIX CoD DLR CoD COR CoD CONE CoD QTS CoD SWCH CoD


Data CentersData Center Fundamentals (Debt/Leverage)DC Cost of Debt Has Fallen Despite Rising Leverage Due to ImprovedFundamentals and a Fairly Favorable Interest Rate Environment. We Do Not Expect The Declines in Cost of Debt to Slow As DCs Become More Mature Assets.

Source: Credit Suisse estimates, Company Data.

4.4%

3.5%

3.2%3.1%

1.7%

1.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

COR DLR CONE QTS EQIX SWCH

Div

ide

nd

Yie

ld

17%14%

6%5%

2%0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

SWCH EQIX COR QTS DLR CONE

Div

ide

nd

Gro

wth

2020 2021E 2022E


Data CentersData Center Fundamentals (Dividend Yield)Dividends Continue to Grow Modestly For Most MTDCs

Source: Credit Suisse Research, Company Data.

COR Leading on

Dividend Yield with

Solid Div. Growth

Trajectory

0.0x1.0x2.0x3.0x4.0x5.0x6.0x7.0x8.0x9.0x

10.0x

Net

Deb

t/ F

Y20 E

BIT

DA

-40%

-30%

-20%

-10%

0%

10%

20%

AFFO

Per

Sh

are

Gro

wth

Y/Y

2020 2021E 2022E

0%

10%

20%

30%

40%

50%

60%

70%

80%

EB

ITD

A M

arg

ins

2021E 2022E

(10%)

(5%)

0%

5%

10%

15%

20%

Re

ve

nu

e G

row

th Y

/Y

2020 2021E 2022E


Data CentersData Center REITs vs. Other REITs (Multiples)Data Centers Are Attractive at Current Levels Considering Growth Forecasts.

Source: Factset, Credit Suisse Research estimates. *2020-2022 Hotels’ & 2020 Regional Malls’ revenue growth not to scale for graphical purposes. Hotels’ AFFOS growth and net leverage ratio N/A.

AFFO Per Share Growth is Projected to Accelerate 2021-2022E Favorable Growth, With Leverage Comparable to REIT Peers

DCs Show Consistently Higher Revenue Growth Across REITs EBITDA Margins Are On The Lower End

39

Public Versus Private Data Center OperatorsData Center Industry Remains Fragmented; Private Market Stacked With Vendors.


Data Centers


Public Data Centers Private Data Centers (30+ Operators)

40

Public Versus Private Data Center OperatorsKey Differences Between Public/Private Data Center Operators, Publicly Traded Operators in a Position of Strength Currently.


Data Centers


Given the formations of recent private data centers from a variation of larger company divestitures (telecoms), mergers (managed services, colocation), and demand surges fromwholesale and retail providers, inquiries from private equity, asset manager and fixed income institutional investors have increased significantly with a common theme across all theinquires is to understand the key differences between the private and publicly traded data center operators. Below we highlight the five key differences between the two types ofproviders based on our industry contacts and our general sector observations, collected through industry conferences, reported metrics, and other sources.

Factor Details on Public / Private Operators Offering Retail & Wholesale Colocation

1) Business Segments

Almost all publicly traded data center operators primarily offer space, power, cooling, and interconnection. Private operators offer theseservices in addition to web/cloud hosting, managed services, security services, construction services, and other. This means privateoperators generally have higher OPEX levels to support the extra staff to service these extra segments in cases that the services are moreOPEX intensive than the standard colocation business, pertaining mainly to web hosting and managed services. Wholesale is lean.

2) Location & Markets

Publicly traded operators predominantly focus/deploy into Tier 1 or 2 markets given enterprise customer and cloud availability zoneconcentrations. Tier 1 & 2 markets are also more interconnection dense compared to lower tier metros/markets. Private operators deploysimilarly for both retail and wholesale builds, but have a larger presence in Tier 3 markets (Charlotte, Orlando, Minneapolis, Montreal,Seattle, Nashville, etc.). Tier 3 markets are more complex to scale with enterprise and cloud customers, ramping slower and smaller.

3) Age of Facilities &

Power Distribution

Capabilities

Publicly traded data center operators have a healthy combination of new capacity from facility expansions and net-new campus builds whilemaintaining older facility vintages given consistent non-recurring CapEx investments for retail/wholesale facility sites. Private operators inretail on average have much older data centers, with lower power capacities supporting older IT hardware & networking equipmentdeployments, and in some cases have not seen non-recurring CapEx investments for several years. New private wholesale builds aregenerally in good shape given their recent development standards, using experienced facility design engineering firms.

4) Type of ColocationPublicly traded operators are balanced well between retail and wholesale data centers and have robust retail capabilities with cloud andSDN On-Ramps whereas private operators have lower On-Ramp capabilities, forming less capable customer/cloud/SDN tenantecosystems. Public operators have a material scale and connectivity advantage compared to private operators in this factor.

5) Access to Financing

& Capital

Publicly traded operators have several capital financing options including: 1) follow-on equity raises/public markets, 2) credit facilities, 3)senior debt notes (investment grade, high yield), 4) variety of joint venture partnership opportunities, and 5) other forms of funding at highpublic equity valuations. Private companies have combinations of public company sources (debt, credit facilities, etc.), but at lowervaluations, lower scale, usually lower than investment grade rated debt options, more complex JV partnership agreements, and privateoperators do not have access to equity raise capabilities from public markets (especially not at REIT valuations), restricting cash injectionsto private/pension/sovereign equity or new investor funding sources, which is usually an unfavorable course of action for more privatemarket investors if the new capital is not going towards new facility developments or expansions.

41

Data Center Operating Business Models/Strategies


Data Centers


Company Strategy Description Pros Versus Cons

Retail /

Colocation

(Ecosystem/

Interconnection

Density)

Retail / Colocation businesses focus

on smaller customer deployments,

oftentimes having dense interconnection activity and two to

50 cabinets per customer per multi-

tenant data center.

Pros: Higher colocation price points and higher interconnection revenue streams per cabinet, lifts returns on invested capital yields (~15% to 25%) for businesses. High moat businesses, requires solid balance sheet and assets to compete effectively. Can upsell into other services and connectivity offerings given tech industry position.

Cons: Retail Colocation Market is not high growth; market generally growing ~8% CAGR for the next five years. Stable ROICs in existing markets but fluctuations in international markets with regulations impacting interconnectivity. Short term leases/contracts (~2yrs).

Wholesale /

Hyperscale

(Cloud Targeted)

Wholesale / Hyperscale data center

businesses are generally leased by one customer/tenant per data center

facility. Customers are generally

cloud providers (AMZN, MSFT, FB,

CRM) or large enterprises seeking to exit their older enterprise facilities

and outsource infrastructure needs.

Pros: High market growth during high IT spend cycles, indexed to hyperscale capex growth that is almost double retail colocation growth rates over the next five years. Long lease maturities, lower churn rates, and solid repeat business. Balance Sheet is strategic, longer leases can lock-in better costs of debt (Invest. Grade ratings).

Cons: Customer has sizeable bargaining power during renewal process and returns on invested capital can generally be low (~9% to ~11% per year). Often times regarded as a commoditized business and sensitive to power rates per market. Small number of target customers to achieve high growth. Tech. obsolescence is a big risk.

Various and

Mixed

Strategies

(Enterprise,

Hosting,

Connectivity,

Cyber Security)

Various strategies include:

(1) Targeting Tier 2 and 3 data center markets (international

markets, etc.);

(2) Cyber security Offerings with colocation services;

(3) Colocation, Web Hosting, and Connectivity offered together for

customer deployments (Flexential, Switch, INAP).

Pros: Higher price points for colocation price points with upsell opportunities into cloud hosting, cyber security, and connectivity offerings, lifts return on invested capital yields to 11% to ~15% range. Tier 2 and 3 markets can be more profitable than Tier 1 markets, given limited

competition.

Cons: Market growth for mixed strategy businesses are lower than ~8% CAGR for the next five years, largely because customers are legacy enterprises managing private cloud workloads. Mixed strategy businesses receive lower valuations given their mixed offerings and difficult to understand business models compared to Retail/wholesale businesses that have a good number of publicly traded comps.


Data CentersEnterprise DC Divestitures to Continue (Credit Suisse)


Credit Suisse Example—IRM-CS Transaction: In 2Q17, Iron Mountain Incorporated (IRM) announced plans to make its first international acquisition by

purchasing two data centers owned by Credit Suisse (CS) in London and Singapore for $100 million. As part of the transaction, CS will enter into a long-term leasewith IRM to maintain their existing data center operations. The two data centers would add a total of 273,000 square feet and over 14 MW of capacity (including

future expansions) to IRM’s portfolio of which 4.2 MW will be leased back to CS. The London data center totals 120,000 square feet and is located in the Slough

Trading Estate, while the Singapore data center totals 153,000 square feet and is located in Serangoon. Both facilities provide access to large power networks and

an ability to serve numerous enterprises in the respective data center markets. Designed to meet the security requirements of a highly regulated financial services

firm, the data centers comply with IRM's standards for security and compliance. Additionally, after accounting for the 4.2MW leased to Credit Suisse, IRM will have

additional expansion capacity of approximately 10MW in these two attractive data center markets.

• Why Did CS Divest Their Data Centers? CS found that it was very expensive to maintain its two data center facilities where they were only utilizing ~30% ofcapacity. Therefore, it made more economical sense to sell these locations to avoid the recurring capex and overall costs of maintaining a data center facility while

being able to still use the facilities through a leaseback deal. Ultimately, CS built these data centers overestimating for capacity it never used and by leasing back

through a third-party data center provider, CS will only need to pay for what it uses, rather than for the whole facility.

• Why Did IRM Acquire CS’ Facilities? IRM is continuing to build out its data center business and this transaction enabled IRM to establish an internationalpresence at an affordable price (we believe the price point of ~$7million per MW, is at or below traditional build levels). In addition, CS serving as IRM’s anchor

tenant in these facilities is an added bonus and with an anchor tenant signed and excess gross power available, IRM will be able to expand its colocation expertise

on the facility and increase the facility’s utilization, leasing the entire facility’s available gross power.

Win-Win Transaction: In summary, we view enterprise data center facility divestitures to MTDCs as a win-win transaction, giving the enterprises access tointerconnection services that MTDCs specialize in at lower overall OPEX and giving MTDCs facilities at price tags below their and the market’s average cost basis for

similar facilities. We do not see a reason for the rate of enterprise data center facility divestitures to drop.

0%

0%

3%

3%

4%

4%

5%

5%

5%

5%

6%

8%

8%

9%

9%

12%

12%

13%

14%

16%

18%

21%

25%

26%

34%

36%

0%

1%

11%

12%

5%

11%

4%

5%

7%

5%

4%

16%

4%

8%

12%

15%

12%

16%

13%

17%

27%

32%

43%

1%

3%

15%

6%

11%

16%

13%

6%

0%

N/A

1%

4%

15%

5%

4%

9%

4%

10%

18%

9%

N/A

N/A

21%

13%

13%

20%

Security Software

Collaboration Software

CRM Applications

HCM Applications

BI/Analytics

Public Cloud

Hybrid Cloud

SD-WAN

Observability

Wireless Connectivity

Edge Compute

DevOps

ERP Applications

Routers

Database

IoT

Infrastructure software

Microsoft Office

AI/Machine Learning

Storage

Campus Switches

Data Center Switches

PCs

Servers

Data Center Builds

Consulting

January 2020 Survey July 2020 Survey January 2021 Survey

43

Credit Suisse January 2021 CIO Survey ResultsData Center Builds (Enterprises Building Their Own Data Centers) Are One of the First Areas Enterprise CIOs Would Pull-back Spending From Their Budgets. Unsurprising In Our View Given the Secular Dynamics Within the Data Center Sector.

Data Centers


Based on data from our January 2021

CIO Survey (77 Global CIOs at

companies with revenue >$1bn), when

we asked: What are the top 3 areas

where you would likely pullback spend

if necessary? Data Center Builds have

a ~3x greater likelihood today (34%)

versus 13% in January 2020 of being

an area a CIO would pull-back

spending, top of the list of areas a CIO

would cut spending allocations. This is

a trend that has been in motion for the past5+ years given the capital intense nature ofbuilding than managing an enterpriseowned data center. Financially, it does notmake sense in our view for an enterprise to

build, own, and managed a data centergiven the highly distributed nature of nextgeneration of IT workloads and compellingpublic cloud offerings across variousvendors. We expect this trend to accelerateand enterprise owned data center builds todramatically pull back in coming years.

Source: Credit Suisse CIO July 2020 Survey (See Report: July 2020 CIO Survey – Data Center Implications Remain Positive; Networking Impact Negative Overall).

https://plus.credit-suisse.com/s/_YI8f4AA-WEqgEk


Data CentersEdge Data CentersEdge Data Center Proliferation Expected to Accelerate in 2021-2022.


Edge Computing and Edge Data Centers in Focus: Throughout 2019 there was a consistent narrative ramp in edgecomputing and data centers, and this ramp was finally topped by Amazon Web Services at Re:Invent in the first week of

December 2019 with the announcements pertaining to their new partnership with Verizon to deliver 5G Edge Cloud Computing

services and AWS Outposts. Incorporating sub-sector technology capex spend cycle views across Hyperscale, Multi-Tenant Data

Centers, Telecom, and Cable companies, we presented our views on the edge compute and the micro data center landscape at

Edge Congress (November 2019, Austin, TX). We believe the physical edge/micro data center opportunity will

materialize in a more meaningful way in 2021, following more telecom capex spending ramps in preparation for 5G, cablecompany network core re-distributions (and virtualization core completions), further hyperscale capex spending trends, and the

emergence of more edge application use cases, discussed in our keynote with projections and supporting observations.

Timeline for Edge Proliferation – 2021-2022 Critical for Edge RampsClick Here for Link to Video

https://plus.credit-suisse.com/u/V7j7Pr2AF-XphW

https://plus.credit-suisse.com/u/V7j7Pr2AF-XphW

45

Edge Compute & Edge Data CentersSignificance of Edge Computing Elevated By The Pandemic


While the COVID-19 pandemic led to a downturn of investment in the automation sector (estimated ~10% contraction of spend in 2020) asenterprises focused on business resiliency and connectivity of a remote workforce, the sector is positioned to benefit in the medium and long-termas organizations recognize the significance of industrial IoT with use cases for remote monitoring and operations. Industries with high-throughputsuch as automotive, semiconductor, and food and beverage are expected to be the quicker adopters of edge computing. The industrial edge

computing market is expected to grow from at a 20% CAGR over the next decade growing from $619M in 2019 to $4,789M in 2030

as organizations continue to recognize the benefits of edge computing (lower cost of data transmission, lower latency etc.)

Source:. Industrial Edge Compute and The Future of Automation – Omdia. November 2020.

Market for Industrial Edge Computing By Region Top Four Growth Industries For Industrial Edge Compute

1,002

1,801

1,986

102

206

311

0 500 1,000 1,500 2,000

Americas

Asia & Oceania

EMEA

Revenues (Millions of $)

2019 2030

35 33 30

74

281

310327 328

0

50

100

150

200

250

300

350

Food and beverage

machinery

Semiconductor and

electronics

Power AutomotiveR

eve

nues

(Millio

ns

of

$)

2019 2030

Data Centers

Tower REITsFundamentals Remain Very Attractive Compared to Overall REIT Industry, Albeit at Lower Growth Rates


47

Tower OutlookExecutive Summary – Secular Gainers, Structural Winners Amidst 5G Cycle

Data Centers


Five Key Revenue Drivers Lifting U.S. Towers Higher: Following the formation of a large third carrier, New T-Mobile, and the commencement of the 5G cycle, we identify ameaningful sequence of revenue drivers for the U.S. towers, which we expect to lift their business performance both short and long term. We identify: (1) elevated carrier capitalexpenditures (Capex) to remain intensified through 2023E as carriers look to further build out 5G radio nationwide coverage; (2) we expect tower tenancy to increase steadily overtime from a ~2x industry average level (factoring in industry telecom consolidation); (3) with the introduction of new spectrum portfolios, including C-Band, we expect moredensification on towers over time, especially on macro towers given the growing mind-share of mid-band for 5G networks (see our recent post telco analyst day note here for

further details); (4) we expect 5G handsets from major handset providers (5G iPhone especially) to lead to further tower densities; and (5) as the aforementioned drivers ramp,we see tower amendment activity increasing and ROIC rising. Given the 5G cycle is expected to last through 2023 by our estimates and many digital consumption trends (WFH,OTT streaming, and online gaming) accelerated due to COVID-19, we believe that the TowerCos are well-positioned for growth over the long-term. Additionally, in the short-term,we believe concerns around wireless carrier capex are overblown, as carriers remain committed to winning the 5G race (due to its implications to winning customers), and thereforeview TowerCos as oversold and undervalued at current levels relative to the long term opportunity ahead, despite concerns of rising rates. To review our detailed thesis, see our

recent sector primer: Tower REITs – Riding the 5G Wave.

• Top Pick: RADI (Outperform, $19 TP, +31% upside potential) – Solid Grower with Superior Cash Flow Visibility: We recently initiated on RADI with an Outperformrating, based on the following factors: (1) Vast TAM opportunity to consolidate land interests; (2) RADI’s highly effective, globally distributed 300 person business dev. teamwhich leverages RADI’s proprietary database of land owners/interests; (3) Macro environment to bolster RADI’s acquisition pipeline as individual land owners increasingly look tosell their lands amid challenging economic dynamics; (4) RADI has $324M of available cash, ample access to credit, with sufficient leverage capacity for continued high levels ofacquisition activity; and (5) 5G should further bolster RADI’s business opportunity as connectivity density rises, increasing the number of TAM site and lease interests. Ourvaluation is based on the average of two methods: (1) EV/GCF multiple of 25x (~2x above TowerCo peer group) our 2022E GCF of $100.4M; and (2) EV/EBITDA multiple of25x (~5x above TowerCo peer group but below RADI’s current multiple of 33x) our 2022E adjusted EBITDA of $34.7M.

• AMT (Outperform, $296 TP, +21% upside potential) – Indexed to Global Connectivity Proliferation: We maintain an Outperform rating on AMT, based on the followingmain factors: (1) AMT’s globally distributed macro tower business is set to benefit from various telecom standard upgrades within high growth markets; (2) AMT’s averagemacro tower tenancy is expected to increase over time as TMUS-S optimizes its nationwide 5G network; (3) net leverage levels are below peers and AMT has scope to increasedepending on M&A opportunities, which benefit from lower costs of debt and interest rates; and (4) AFFO payout ratio is expected to grow dividends and to increase to ~57%payout level (2021 CS estimate) as U.S. business accelerates in response to the 5G cycle. Our valuation is based on a 30x FY22 AFFOS of $9.31 and DCF assuming a WACCof 5.6% and terminal growth rate of 2.5% (below standard portfolio lease escalators of ~3%).

• SBAC (Neutral, $277 TP, -3% downside potential) – Moved to the Sidelines Due to Slower Domestic Growth: We moved to Neutral on SBAC based on the followingmain factors: (1) Given ~80% of SBAC’s revenues are generated with U.S. domestic customers, we viewed consensus estimates as too high for domestic revenues in light ofelevated Sprint churn over the next couple of years; (2) Rising rates are a headwind, with the 10 Year Treasury currently yielding ~1.6%, up from ~0.5%. While we don’t viewrising rates as a substantial detriment to SBAC’s free cash flow generation, SBAC has generally seen poor share price returns in years in which rates rise; (3) SBAC also haslimited optionality relative to its peers due to higher leverage; and (4) That said, valuation levels have appeared to trough in the short-term. Our valuation is based on a P/AFFOSmultiple of 23x our 2022E AFFOS of $10.73 and DCF assuming a WACC of 5.4% and terminal growth rate of 2.1%.

• CCI (Neutral, $155 TP, -12% downside potential) – Valuation Difficult to Justify Considering Long-Term Tenancy Trend and ROICs: We have a Neutral rating on CCIand identify the following factors keeping us on the sidelines: (1) ROIC concerns tied to their small cell business, which has yet to accelerate node deployment despite previousexpectations for an acceleration; (2) as CCI builds further outside of major metro cities, the likelihood of achieving higher tenancy above the ~2.3x industry average over time isreduced in our view, (3) in our view, the capital return and dividend payout ratio are already optimized at ~80%; and (4) DISH’s long-term leasing agreement with CCI can be akey driver if DISH ends up leasing close to 20,000 towers from CCI. We view the buildout will be more equitable than not given AMT’s MLA. Our valuation is based on aP/AFFOS multiple of 25x (in-line with CCI’s current level) our 2022E AFFOS of $6.96 and DCF valuation assuming a WACC of 5.6% and terminal growth rate of 2.5%.

https://plus.credit-suisse.com/s/V7qi5N4AN-XtNl

https://plus.credit-suisse.com/r/V7l3QV2AN-Vvd1

48

Five Key Revenue Drivers Lifting U.S. Towers HigherWe Expect All Five Core Drivers to Be Operationally Bolstering the Tower Industry in 2021 and Lifting TowerCo Share Prices Higher.

Towers



Carrier CapEx & 5G Cycle

Carrier CapEx across U.S. Carriers to deploy $30B from 2019-2023E to further densify nationwide

networks, including 4G/LTE density and nationwide 5G rollout.

Increased Tenancy

Formation of three major carriers and a new fourth carrier (DISH, assuming successful entry) to

increase tower tenancy over time from ~2.3x per tower through 2023E and 5G cycle.

More Spectrum, More Site Densification

In addition to deploying more mid-band spectrum through major carriers (enabling 5G nationwide coverage), C-Band to further augment tower

opportunity.

5G Handsets & Use Cases are Tailwinds

Launch of commercial and consumer 5G use cases introduce several key drivers for tower

industry, including increased network importance.

Tower Amendments

As major carriers right-size their networks and deploy nationwide 5G coverage by augmenting

existing/new macro towers and small cells, Towers to see continued elevated amendment activity.

VZ

T

TMUS

DISH

DISH must offer postpaid

national wireless service in 2021.

To receive radios at scale from

Fujitsu in 2021. Low and mid-

band spectrum share declined to

8% from 13% following C-Band

auction.

2023

$10B incremental C-Band capital

spending from 2021-2023.

>50% of 4G and 5G sites to be

on Verizon-owned fiber by 2023.

175M+ POPs covered b C-Band.

To spend $6-8B in capex

deploying C-Band spectrum, with

the vast majority of spend

occuring from 2022-2024.

mmWave to be part of network

densification strategy.

The New T-Mobile committed to

offering in-home broadband

within three years of closing

[market In-home broadband to at

least 9.6M eligible households,

2.6M rural households].

2022

Secured 60 MHz of early clearing

A-Block spectrum. $10B

incremental C-Band capital

spending from 2021-2023. 2x

mid-band spectrum post C-Band

auction. 7-8k C-Band equipped

sites in 2021.

Acquired 80 MHz of C-Band for

$27.4B. Plan to deploy the first

40 MHz by the end of 2021. C-

Band deployment costs already in

2021 guide. 3M new fiber

locations across 90 metros in

2021.

T-Mobile committed to a

Nationwide 5G network within 3

years of closing [low-band area

covering 97% US pop., mid-band

area covering 75% of US pop.].

Fast 5G to cover 200M people by

EOY '21.

2021

Dish must have a 5G network

that covers 20% of country and

have a core network built (Jun).

Plans to deploy 10,000 sites by

2022.

$10B incremental C-Band capital

spending from 2021-2023.

>50% of 4G and 5G sites to be

on Verizon-owned fiber by 2023.

Verizon expects the contribution

to revenue growth from 5G B2B

segment to build in 2022.

To spend $6-8B in capex

deploying C-Band spectrum, with

the vast majority of spend

occuring from 2022-2024. We

expect AT&T to finish FirstNet

builds through 2022.

The New T-Mobile committed to

a rural 5G deployment within

three years of closing [low-band

area covering 85% US

population, mid-band area

covering 55% of US population].

Dish must have a 5G network

that covers 70% of country and

may also purchase Sprint's

800Mhz spectrum (Jun).

2019

5G available in

21 markets over

mmWave (Nov)

5G available in

19 markets over

mmWave (Apr)

5G available in 10 markets over

mmWave (Aug)

Dish does not expect a lot of 5G build out in 2020

[$250M-$500M spend]. For 2020, Dish expects much

of the 5G work to be centered on RF planning and

permitting. DISH has the option on at least 20k

decommissioned S and TMUS cell sites within the first

five years of the deal closure. Dish is launching its first

city this year as a demo market.

Dish was in litgation looking to extend buildout terms

on spectrum holdings. Original DISH buildout plans

were for 2020.

TMUS* 5G

available in 6

markets over

mmWave (Jun)

S* 5G available

in 9 markets

over 2.5 GHz

(Aug)

TMUS* 5G

available in 200+

POPs over low

band (Dec)

5G available in 31

markets over

mmWave (Dec)

TMUS-S Deal

Closed following

favorable ruling

(Feb)

2020

Verizon dynamic spectrum sharing (DSS) and 5G

marketing launch in tandem with iPhone, 5x+ y/y

increase in 5G small cells, 60+ 5G Ultra Wideband

(UWB) Mobility cities, 10+ 5G UWB Home cities on 5G

NR and nextGen CPE, 10+ 5G commericial MEC

centers. Nationwide 5G achieved in October 2020, up

to 230M people covered.

AT&T to continue

expanding its low-band 5G

coverage. FirstNET is

nationwide already and

80% of the build is done.

5G available in 58 markets

total; 35 markets over

mmWave (Feb). Nationwide

5G achieved in July 2020.

T-Mobile is offering 5G service on

600Mhz. First Nationwide 5G

achieved, which now covers 270M

people in the U.S.

49

Expectations For Major Carriers’ 5G Rollout Plans5G Race Stunted by COVID-19, to Reaccelerate in 2021E, Albeit with Sprint Churn

Towers


Source: Credit Suisse Research. Company Data.

We expect material improvements to 5G networks supported by increased capital expenditure capacities accelerating in 2021, given carrier plans and minimized

COVID impacts. In July 2020 AT&T achieved its nationwide 5G goal, the second carrier to do so after TMUS. Verizon achieved nationwide 5G (mid-band) in

October and plans to extend 5G coverage in densely populated areas using mmWave spectrum and MEC, but progress remains behind the other carriers. DISH

remains in the nascent stages of network development.

5.01.8 1.2 1.4 2.4

4.96.8

4.0 5.42.1 3.1 4.6 4.5

2.7

3.6 3.7 2.82.7

3.7

4.2

4.34.7

4.75.2

5.5 6.4 12.0 11.8 11.8

9.5 9.4 9.4

3.75.3 6.0

9.29.8

10.8

11.2

12.210.1

10.19.6

9.3 7.9 6.9 9.6 9.5

9.5 9.4 9.3 6.5 6.5 7.2

8.49.0

8.9

9.410.5 11.7

11.2 10.3 8.5 9.1 8.9

13.5 13.2

12.8 13.0 13.0

1.43.8

3.11.1 1.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E

Sprint T-Mobile AT&T Verizon DISH

Wirele

ss C

apex

($ b

illio

ns)

50

5G Cycle: We Are In the Early InningsWe Are in the Build-out Stage of the 5G Wireless Capex Cycle That Should Build Momentum in 2021 and Last Until 2024.

Towers


Source: Credit Suisse Research and Estimates.

5G adoption is expected to translate into significant network traffic increases. However, we expect the 5G cycle to be bigger than the priornetwork standard upgrade cycle given the magnitude of bandwidth growth expectations and overall volume of new users consumingbroadband intense applications wirelessly. Given the significant step-up in expected traffic, we expect carriers to absorb the majority ofdata traffic increases through existing further cell site densification – leveraging existing 4G macro cell tower nodes, and augment thenetwork further with new macro and small cell sites. However, we previously saw ~4 years of spend associated with the coverage buildout

phase of the 4G cycle equating to $26.4B of CapEx spend across the four major carriers and our expectations for the 5G cycle is to seeat least 6 years of elevated capex spending equating to $33.1B of CapEx, on average, to densify and right-size the existing and newnetwork. Importantly, we believe that 5G standardization is fundamentally a more robust network upgrade cycle than 4G was

for its predecessor, given the extensive 3GPP standards and target data transmissions capabilities by the major carriers,

therefore necessitating greater spend intensity for high-quality coverage maps.

4G Cycle: $26.4B 5G Cycle: $33.1B Estimated

1.9

1.9

1.9

1.9

1.9

1.9

1.8

1.8

1.8

1.8

1.8

1.8

1.8

1.9

2.0

2.1

2.1

2.2

2.2

2.2

2.2

2.3

2.4

2.4

0.0 0.5 1.0 1.5 2.0 2.5

2020

2019

2018

2017

2016

2015

2014

2013

2012

Average Tenants Per Tower

CCI SBAC AMT

51

Tower Tenancy Has Declined Due to ConsolidationOverall Tenancy Should Remain Fairly Stable Given 2021 Churn Dynamics. Acquired Tower Portfolios, Such as Telxius, Have Healthy Tenancy Ratios.

Towers



Acquired Telefonica sites with ~1.1xAcquired Vivo SA sites with ~1.3x

17k sites added over 2 years averaging 1.6x

Acquired Oi SA sites with ~1.2x

30k sites added averaging 1.3x

Two portfolios acquired, including Sunesys, with 1.5x sites

Acquired Verizon sites with ~1.1xAcquired LatAm sites with ~1.1x

Acquired V. Idea sites with ~1.1xAcquired Millicom sites with ~1.2x

Acquired Eaton sites with ~1.1xAcquired GTS sites with ~1.7x

We believe that with the establishment of New T-Mobile as the third major U.S. carrier, the TowerCos’ U.S. tenancy should improve gradually, especially if Dish is capable ofcompeting as a fourth carrier, providing more upside to tenancy, thereby improving ROIC on macro towers especially.

52

New Spectrum Additions Are LT Positives for TowersFollowing C-Band Auction, Mid-Band is More Evenly Spread Between Operators; C-Band Capex is a Solid Boost for TowerCos, While They Work Through Sprint Churn.

Towers



In our view, C-Band and other mid-band spectrum are clearly long-term opportunities for tower companies that will vary

based on product and customer mix, but given 1) the amount of capital spent on acquiring C-Band spectrum and 2) the

noted incremental capex dollars to be spent on deploying C-Band, we believe Mid-Band, again, should be a backbone of

the next wireless evolution. We expect the new mid-band spectrum will provide new tower leases and amendment revenues as

operators aggressively extend capacity for 5G. In the figure above, we highlight the current state of spectrum for mobile operators. Wehighlight that the New T-Mobile has the largest mid-band spectrum holdings, but note that the vast majority of it is in the lower Mid-Band region, while Verizon now owns the largest collection of upper Mid-Band spectrum. Between Verizon’s additional $10B spentfrom 2021 to 2023, and AT&T’s incremental $7B spent from 2022-2024, new Mid-Band spectrum blocks are clearly going to be adriver of tower activity going forward. The auction for the 3.45-3.55GHz spectrum will begin in December 2021, with potential for a

mid-2022 deployment. Importantly, the new block is adjacent to 430MHz of mid band spectrum that has previously been freed up.

Low and Mid Band Spectrum Holdings (MHz) by Major Carrier

Incremental $10B in C-Band

capital spending through 2023

Incremental $7B in C-Band

capital spending through 2024

53

Carrier Spectrum Holdings Breakdown T-Mobile Leads Low & Mid-Band, But Verizon & AT&T Have Gained Ground.

Towers


Source: Credit Suisse Research (Doug Mitchelson – Telecom, Cable, Media Research Team).

Given that radios utilizing low and mid-band spectrum constitute the majority of macro tower radios (due to the spectrums’

propagation), it is important to understand which customers are capable of growing their 5G network to the benefit of TowerCos.

Following the C-Band auction, all of the major carriers are in a great position to build out their 5G networks with a combination of

low/mid-band in rural/suburban locations, supplementing that with high-band in metros and other dense areas (arenas/airports).

Spectrum Holdings

Band Category Low-Band Lower Mid-Band Upper Mid-Band Total High Band/mmWave (fka Ultra-High)

Band Name 600 MHz 700 MHz Cellular SMR Total L-Band PCS AWS-1 AWS-3 H Block AWS-4 WCS EBS/BRS Total 3.5GHz CBRS C-Band Total Low MVDDS 24GHz LMDS 37/39 47GHz

Low 1710-1755 1695-1780 1915-1920 2000-2020 Lower Upper + Mid Total

Band 2110-2155 2155-2180 1995-2000 2180-2200 Mid Mid Band mmWave

Population-Weighted Avg MHz

Verizon 21.7 25.2 46.9 21.4 35.2 11.4 68.0 15.7 160.9 176.6 291.5 6 621 1,086 1,713

T-Mobile 30.8 9.9 13.9 54.6 66.0 36.9 3.4 137.1 243.4 0.1 26.9 27.0 325.0 334 120 339 380 1,173

AT&T 2.6 29.2 23.6 55.4 38.1 14.6 20.3 20.0 93.0 79.9 79.9 228.3 254 90 795 1,139

Dish 17.8 6.0 23.8 21.1 10.0 40.0 71.1 19.4 19.4 114.3 375 17 5 1 610 1,008

Total Big 4 51.2 66.8 48.8 13.9 180.7 125.5 86.7 56.2 10.0 40.0 20.0 137.1 475.5 35.2 267.7 302.9 959.1 375 611 836 2,221 990 5,033

Comcast 5.0 5.0 7.8 7.8 12.8

Charter 4.4 4.4 4.4

Other & FCC 11.7 4.6 4.1 0.5 20.9 40.0 4.9 3.3 4.2 25.0 56.9 134.3 100.0 102.6 12.3 214.9 370.1 125 89 15 179 10 418

All Others 16.7 4.6 4.1 0.5 25.9 40.0 4.9 3.3 4.2 25.0 56.9 134.3 100.0 114.8 12.3 227.1 387.3 125 89 15 179 10 418

Total 67.9 71.4 52.9 14.4 206.6 40.0 130.4 90.0 60.4 10.0 40.0 45.0 194.0 609.8 100.0 150.0 280.0 530.0 1,346.4 500 700 850 2,400 1,000 5,450

Band Share

Verizon 30% 48% 23% 16% 39% 19% 11% 10% 57% 33% 22% 1% 73% 45% 31%

T-Mobile 45% 14% 97% 26% 51% 41% 6% 71% 40% 0% 10% 5% 24% 48% 14% 14% 38% 22%

AT&T 4% 41% 45% 27% 29% 16% 34% 44% 15% 29% 15% 17% 36% 11% 33% 21%

Dish 26% 8% 12% 35% 100% 100% 12% 13% 4% 8% 75% 2% 1% 0% 61% 18%

Total Big 4 75% 94% 92% 97% 87% 96% 96% 93% 100% 100% 44% 71% 78% 23% 96% 57% 71% 75% 87% 98% 93% 99% 92%

Comcast 7% 2% 5% 1% 1%

Charter 3% 1% 0%

Other & FCC 17% 6% 8% 3% 10% 100% 4% 4% 7% 56% 29% 22% 100% 68% 4% 41% 27% 25% 13% 2% 7% 1% 8%

All Others 25% 6% 8% 3% 13% 100% 4% 4% 7% 56% 29% 22% 100% 77% 4% 43% 29% 25% 13% 2% 7% 1% 8%

Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: Company reports, Credit Suisse estimates, FCC, press reports.

1525-1661 3550-37003450-35502495-2690Frequency (MHz) 663-698 698-806 824-894 854-94012.2 -

12.7 GHz

27.5 -

28.35 GHz

47.2 -

48.2 GHz

24.25 -

25.25 GHz1850-1990

37.6 -

40 GHz3700-39802305-2310

54

5G Coverage Ramps: Network Traffic to Increase5G Build-outs to Accelerate in 2021


By the end of the year, more than 1B people (~15% of the world’s population) will live in 5G coverage areas, according to the Ericsson MobilityReport November 2020. Ericsson increased its estimate for the number of 5G subscriptions at the end of 2020 to 220M. 5G’s faster adoption than4G (LTE) is primarily driven by earlier availability of 5G-enabled devices by a number of vendors and China’s earlier engagement with 5G comparedto 4G. We believe that momentum for 5G build outs and adoption will accelerate in 2021 driven by the 150+ 5G device models

commercially launched, first standalone network launches in Asia and North America, and the availability of different device price

tiers and operating systems.

Source: Ericsson Mobility Report – November 2020.

Mobile Subscriptions By Technology (Billion)

Towers


5G Overview: Benefits are Numerous5G Benefits Yet to be Realized in Full.

Generation TechnologyReal World

Download Speed

Theoretical Download

Speed

Network

Latency

Device

ConnectionsData Volume

2G GSM 9.6 Kbps <114 Kbps 1000 ms

2.5G GPRS 32-48 Kbps 114 Kbps 500-700 ms

2.75G EDGE 175 Kbps 384 Kbps 300 ms

HSPA 650 Kbps 7.2 Mbps

HSPA+ 1.4 Mbps 21Mbps 100-500 ms

DC-HSPA+ 6 Mbps 42 Mbps

4G LTE 15 Mbps 100 Mbps 100 ms 10k

4.5G LTE- Advanced 42 Mbps 300 Mbps 50 ms 50-100k 0.01 TB / sec

5G 1.0 Gbps* 10 Gbps 1-10 ms 1,000k 10 TB / sec

3G

Benefits of 5G: Higher speeds, Lower latency, More device connections

5G data usage 2.8x higher

than 4G in Korea (Sep 2019)

5G vs. 4G – performance and functionality differences

56

5G Coverage Ramps: Network Traffic to IncreaseExpect Significantly Elevated Network Traffic in a 5G World.

Towers


Source: Credit Suisse Research. Ericsson Mobility Report.

Global total mobile data traffic reached ~38 exabytes (EB) per month by the end of 2019, and is projected to grow 4 fold to reach160 EB/month by 2025. Below, we can see the regional breakout of total mobile data traffic. We highlight that data traffic for theMiddle East and Africa are expected to grow at the fastest rate (CAGR 38% ‘19-25). We believe higher data traffic levels will

help drive the need for improved mobile standards and 5G deployments.

2.5 1.4 2.6 1.2

10.58.5

2.34.6

1.73.3 2

3.71.7

1511.8

3.56.9

2.6

17

11.6

16

9.5

47

35

2022

18

0

10

20

30

40

50

North

America

Latin

America

Western

Europe

Central and

Eastern

Europe

North East

Asia

China South East

Asia and

Oceania

India,

Nepal,

Bhutan

Middle East

and Africa

EB

/Mon

th

2018 2019 2025E

Total Mobile Data Traffic By 2025E (EB/Month) – All Regions Growing +20% CAGR from 2019-2025

CAGR 38%

‘19-25

CAGR 21% ‘19-25

CAGR 34% ‘19-25

CAGR 20% ‘19-25

CAGR 21%

‘19-25

CAGR 33% ‘19-25

CAGR 31%

‘19-25

CAGR 34%

‘19-25

CAGR 28%

‘19-25

57

5G Coverage Ramps: Migration to 4G/5G NetworksNorth America and Western Europe Lead on Most 5G Mobile Connections.

Towers


Source: CSCO Annual Internet Report, Company Data

We can see below the regional breakout of mobile connections by 2023. We note that the top three 5G countries in terms of percentof devices and connections share on 5G will be China (20.7%), Japan (20.6%), and United Kingdom (19.5%), by 2023. Increasedadoption of newer mobile standards will benefit towers as carriers build out 5G coverage, incurring amendment revenues while new

equipment adds weight to the tower structures.

Mobile Connections By 2023 (%)

29%23%

31%37%

73%

1%13%

46%52%

50%50%

22%

45%

43%

11% 13% 2%2%

1%

17%

16%

14% 12% 16% 11%

4%

37%28%

0%

50%

100%

Global APAC Central

and

Eastern

Europe

Latin

America

Middle

East and

Africa

North

America

Western

Europe

% M

obile C

onnecti

ons

3P and Below 4G 5G LPWA

TowerCo Revenues Heavily Indexed to N. America

US, 56.8%

India, 16.1%

Brazil, 8.0%

Mexico, 6.8%

Nigeria,

3.0%

Africa Other,

4.7%

LatAm Other,

2.9%Europe, 1.8%

AMT

U.S., 81%

Brazil, 12%

Other, 7%

SBAC

U.S., 100%

CCI

U.S., 80%

Brazil, 11%

Other, 9%

26% 25% 22%13% 9%

2% 1% 0% 0% 0% 0%

74% 75% 78%83%

68%

40%30% 25% 20% 15% 10%

0% 0% 0% 3%

23%

58%69% 74% 80% 85% 90%

0%

25%

50%

75%

100%

CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25

AP

AC

% M

ob

ile I

nfr

astr

uctu

re

Sp

end

2G/3G LTE 5G

84%76% 74%

63%

26%12%

5% 2% 0% 0% 0%

16%24% 26%

37%

74%

85%88%

84%

66%

43%37%

0% 0% 0% 0% 0% 4% 7%15%

34%

57%63%

0%

25%

50%

75%

100%


CA

LA

% M

ob

ile I

nfr

astr

uctu

re

Sp

end

2G/3G LTE 5G

57% 56% 57%46%

24%10% 7% 1% 0% 0% 0%

43% 44% 43%53%

62%

69%

54%

50%44%

38% 34%

0% 0% 0% 1%14%

21%

40%49%

56%62% 66%

0%

25%

50%

75%

100%


EM

EA

% M

ob

ile I

nfr

astr

uctu

re

Sp

end

2G/3G LTE 5G

53% 52% 50%

21%

2% 0% 0% 0% 0% 0% 0%

47% 48% 50%

76%

57%48%

42%

27%18% 13% 11%

0% 0% 0% 3%

41%52%

58%

73%82% 87% 89%

0%

25%

50%

75%

100%

CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25NA

M %

Mo

bile Infr

astr

uctu

re S

pend

2G/3G LTE 5G

58

5G Coverage Ramps: Migration to 4G/5G NetworksAPAC and North America Leading the Way in Network Migrations.

Towers


Source: Omdia.

Moving Towards A 5G World: 5G is still in the early innings, which should allow for meaningful tower growth as carriers ramp their spending on 5G coverage. TowerCos should benefit by generating amendment revenues as customers upgrade antenna systems, especially given the higher spectrum frequencies used for 5G, which necessitate the utilization of more towers.

NAM Breakdown of Mobile Infrastructure Spend (%)

CALA Breakdown of Mobile Infrastructure Spend (%) APAC Breakdown of Mobile Infrastructure Spend (%)

EMEA Breakdown of Mobile Infrastructure Spend (%)

60% 60% 60% 62%63% 65%

70% 70%

60%

51% 50%

67% 67% 67%

60%53%

68%

80%84%

71%

84%

69%

80%88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20

59

Lease Amendment Activity Trending HigherTower Amendment Activity Has Meaningfully Inflected Upwards and We Expect Amendments to Remain Elevated Through 2023E Given That We Are in the 5G Cycle.

Towers


Source: Credit Suisse Research, Company Data

SBAC Amendment Activity Has Grown as a Share of Leasing Revenue, 5G the Likely Driving Force

We expect that carriers will continue to meet their 5G coverage targets by upgrading existing cell sites, driving amendment revenue

more so than expansion site revenue in the early innings. The chart above quantifies the amendment activity motion that this trend has already been in place for over a year, with carriers deploying 5G-ready equipment. We expect lease amendment activity to remain elevated, with Verizon noting that “initial C-Band build [will take place] on existing infrastructure.”

Above, SBAC noted that amendments accounted for 79% of domestic tower leasing revenue over the past seven

quarters, up from an average of 62% in the seven quarters preceding 2Q19. As carriers look to accelerate the commercial availability of 5G across more geographies, we view that amendment activity will remain elevated across major tower operators in 2021.

60

Fundamentals: Gross MarginsTower Gross Margins Expected to be Marginally Higher Through 2022E Versus 2020. Margins are Mature, But Very Solid, Especially Considering Site Mix.

Towers


Source: Credit Suisse Research, FactSet

TowerCos’ Gross Margin Trajectory Muted From ’20-22 AMT’s ’21 GM Remains Ahead of CCI & Data Centers

We forecast gross margin (GM) to rise slightly for TowerCos through 2022, while noting that TowerCos are already at very

solid GMs, well ahead of MTDC peers.

We note that TowerCos primary direct operating expense is ground rent, followed by power and fuel costs. While we would expect fuel

costs to remain relatively stable given crude oil’s price recovery, ground rent costs will likely continue to increase with fixed escalators built into most of the ground leases. Additionally, international tower GMs are lower than that of the US, which means AMT’s GM projection is impressive considering we project its international mix of sites to grow. In total, while variable costs in GM may remain flat, the larger fixed costs should over-index as TowerCos build out in new regions, leaving minimal room for GM leverage, albeit with better topline growth. That said, we compare TowerCo GMs to data center GMs and it remains clear that TowerCo margins are robust.

68.2%

76.8%

69.1%

77.0%

72.9%

67.7%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

SBAC AMT CCI

Gro

ss M

arg

in

2010 2015 2020 2021E 2022E

77.2%

72.2%

66.9% 66.1%

61.6% 61.1% 60.9% 60.5%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

SBAC AMT CCI QTS COR CONE DLR EQIX

Gro

ss M

arg

in

61

Fundamentals: Adj. EBITDA MarginsCost Management Remains Robust, but Margins are Facing Headwinds from Business Maturity and Exploration Costs of New Infrastructure Assets.

Towers


Source: Credit Suisse Research, FactSet.

CCI ‘21-22 Margins Down vs. Expansions from AMT, SBAC Towers 2021E EBITDA Margins Well Ahead of Data Centers

We forecast AMT and SBAC to expand adj. EBITDA margins slightly over the next couple of years from 2020 levels, while

CCI’s margin should revert to more normalized levels in 2021/2022. SG&A costs for TowerCos are driven by personnel

costs to support the procurement of towers for expansion through M&A and new builds, and they continue to improve

efficiency and boost operating leverage.

TowerCos primary costs are above the gross margin line, that said, TowerCos have been very successful in optimizing SG&A expenses, lowering the costs from a double-digit percentage of revenue in the past decade to high single-digits today. Therefore, in light of our expectations for modestly improved gross margins and slightly improved SG&A costs, we arrive to very modestly improved adj. EBITDA

margins for TowerCos. Although longer-term, as tenancy gets closer to 3 tenants per tower, adj. EBITDA margins have room for upside, given improved leverage with relatively static procurement costs (employees).

61.8%

67.9%

62.4%

72.3%

65.8%

58.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

SBAC AMT CCI

Ad

j. E

BIT

DA

Marg

in

2010 2015 2020 2021E 2022E

71.8%

65.0%

58.3%

55.2%53.8% 53.0% 52.0% 51.8%

46.9%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

SBAC AMT CCI QTS DLR COR SWCH CONE EQIX

Ad

j. E

BIT

DA

Marg

in

26.5x 26.1x

22.9x

18.8x

25.0x 24.9x

21.6x

18.1x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

SBAC CCI AMT CLNX-MCE

EV

/E

BIT

DA

Mu

ltip

les

2021E 2022E

26.8x26.0x 25.8x26.3x 25.7x

24.9x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

SBAC AMT CCI

P/A

FFO

S M

ult

iple

s

2021E 2022E

62

Valuations: AFFOS and EBITDA MultiplesSBAC Trades at a Premium on a P/AFFOS and EV/EBITDA Basis Compared to Peers; However, We View AMT is Best Positioned in the Group.

Towers



P/AFFOS Multiple Valuation EV/EBITDA Multiple Valuation

P/AFFOS: SBAC trades at a ~1 turn premium to AMT, which trades at a slight premium to CCI. SBAC’s premium to AMT is due to its greater share of revenue generated in the US (at 80% of site leasing revenue versus AMT which only generates a little over half of its

site leasing revenues domestically). While CCI’s discount is due to its significant exposure to small cells and fiber, which are not viewed as positively as macro towers.

EV/EBITDA: SBAC trades at a premium to CCI and AMT. Additionally, we included CellNex, a European tower operator, to highlight the

premium placed on U.S.-focused tower operators. The multiple gap between U.S. TowerCos and CellNex has narrowed as colocation share has grown in Europe, but the U.S. premium remains due to greater market share and REIT status in our view.

0.0%

0.9%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%


Div

ide

nd

Yie

ld

Yield Avg Min Max

3.5%

4.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%


Div

ide

nd

Yie

ld

Yield Avg Min Max

1.8%

1.2%

2.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%


Div

ide

nd

Yie

ld

Yield Avg Min Max

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%


Div

ide

nd

Yie

ld

AMT CCI SBAC Average

63

Valuations: Dividend YieldsRising Rates Flattened Tower Shares, While Dividends Grew, Elevating Yields in 1Q21, Following Prior Yield Compression.

Towers



Group Average: 2.1% AMT – Elevated Yield at 2% in Recent Months

CCI – Group Leading Yield of 3.1%SBAC – Started Paying a Dividend in 2019

0%

20%

40%

60%

80%

100%

120%

SBAC EQIX CONE AMT QTS DLR CCI COR

AFFO

Payo

ut

Rati

o

2019 2020 2021E 2022E

64

Fundamentals: DividendAMT & SBAC Have Room to Expand Dividends to Match DC Dividend Yields.CCI Dividend Payout is Already More Mature at 73%.

Towers


Source: Credit Suisse Research, Credit Suisse Estimates.

2019-2022E AFFO Payout Ratio: SBAC & AMT Have Meaningful Room to Grow Dividends to Supplement Shareholder Returns

In General, Tower AFFO Payout Ratios are Slightly Below Data Center Peers: While CCI’s AFFO payout ratio is only second to COR, SBAC and AMT have lower payout ratios, closer to that of EQIX and CONE.

• AMT: Paid out 53% of its AFFO through a dividend in 2020, well below most other REITs. AFFO payout is forecasted to rise in 2021, but only marginally to 57%, again, below most REIT peers. If AMT were to grow its 2021E div. by 50% we project that it’s AFFO payout would only rise to

73%, highlighting the optionality the company has with its cash flows.

• SBAC: Paid out 20% of its AFFO through a dividend in 2020, SBAC’s first year with a dividend. We project AFFO payout to rise to 23% in 2021E, still well below payout ratios for all other towers and data centers, as SBAC is still aggressively growing its site count.

• CCI: Paid out 73% of its AFFO through a dividend in 2020, higher than most towers and data centers, and more in-line with broader REITs. CCI’s payout ratio is expected to rise to 79% in 2021E.

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

P/FY

+2 A

FFO

2021E 2022E

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

P/FY

+2

FFO

2021E 2022E

0.0x5.0x

10.0x15.0x20.0x25.0x30.0x35.0x40.0x

EV

/FY

+2

EB

ITD

A

2021E 2022E

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x16.0x

P/FY

+2 S

ale

s

2021E 2022E

65

Towers


Valuations: Relative REIT Group ValuationsDue to Impressive Rev./AFFOS Growth Towers Trade Ahead on All Metrics, Warranted in Our View, Especially as the Most REITs Struggled Due to COVID.

Source: Credit Suisse estimates, FactSet, Hotels 2021 P/AFFO is N/A due to negative AFFO.

P/Sales EV/EBITDA

P/FFO P/AFFO

N/A

Telecom & Networking EquipmentExpect Mixed Results from Enterprise Customers in 1Q21 Results, Cloud Demand Remains Consistently Elevated


67

Networking


Following a challenging 2020 for Networking companies, we expect the dynamic to turn relatively favorable for the group in 2021E, and in specifically 2H21E based on our industrydata and channel checks.

Across the Comm. Equipment End Markets, we would highlight the following:

Overall Networking Market Growth (Switching, Routing, ADCs, WLAN): Following our recent checks, we continue to expect a strong enterprise recovery in 2021 albeitweighted to the 2H, driven by enterprises adopting long-term projects and long-lasting approaches to digitizing workflows, an effort that was essentially fully halted whenCOVID-19 hit. Furthermore, we believe the strength in enterprise this year will be magnified by lapping easier comps from 2020 with the WLAN market growing +10.5 y/y(revised up from 6.3%) in 2021. We expect the data center switching market will continue to steadily grow, stemming to even stronger than anticipated U.S hyperscale capexgrowth, 20.1% y/y versus initial expectations of +16% y/y. According to the latest Omdia forecast, the data center switching market is projected to grow to $12.38B (+2.7%y/y) in 2021, slightly below our expectations given our channel checks, while the campus switching market is expected to grow to $15.71B (+8.2% y/y), revised down from+9.4% y/y, but still well above our conversations with industry contacts. Heading into another year of the 5G cycle, we expect the SP routing and switching markets willcontinue to expand as carriers continue to invest in 5G equipment, but we need to see tangible examples of equipment vendors winning deals and what types of technologiesdeployed to determine if they are repeatable sales motions. We still expect security will continue to remain a key priority in 2021 and over the next several years.

Channel Check Summary: We have heard numerous reports that enterprise deals that began negotiations in 2020 were delayed in 1Q 2021 with the following reasonsmentioned: (1) WFH/in office staff rightsizing taking more time to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing system integratorselection; and (3) chip/supply shortages for IT solution gear also called out as an issue. Other factors include equipment refreshes and public cloud ecosystem lock-in asdecelerators to the enterprise cloud transition. We are now hearing that a big bulge of enterprise deals won’t get signed until May-June 2021 and deployed in 2H21.

Valuation – Given the aforementioned industry dynamics and the difficult 2020, we expect to see a constructive recovery in the narrative, fundamental models, or valuations asa group, but continue to favor vendors indexed to specific trends like MSI (first responder, LMR, Command Center), ANET (growing cloud titan capex spend, strong enterprisegrowth opportunities) and COMM (telecom wireless equipment for 5G cycle, cable network densification).

Credit Suisse Outperformers and Underperformers:

1. Top Pick: MSI (Outperform, $198 Target Price) – MSI is one of very few providers that can offer a true end-to-end solution for customers from first responder radios to fullcommand center (software) communications in one aggregated and auditable system. We see MSI as the leading provider and highly irreplaceable given it is the only true largescale U.S. based end-to-end provider serving municipal, state, and federal first responders in North America.

2. ANET (Outperform, $359 Target Price) – ANET is well positioned to benefit from strong cloud/hyperscale capex spend growth. Cloud titans and SPs will continue to look toANET for data center switching long-term, in our view, based on the company’s proprietary EOS software, quick adoption and integration of leading edge components(merchant silicon use, latest DC switching chip), and network equipment power efficiency.

3. COMM (Outperform, $21 Target Price) – Despite recent pressures on COMM’s end markets, we continue to view the company’s relevance to overall telecom networkdensification and data center build-outs as positive over the next few years. The company boasts a strong track record of operational excellence and discipline with respect todebt pay-downs and achieving synergies from integrating acquisitions

4. JNPR (Underperform, $22 Target Price) – JNPR faces multiple pressures that we believe will lead the stock to Underperform. These include intensifying technologicalpressures from CSCO – virtual core and new Silicon One/8000 Series offerings – the rise of White Boxes, and slower than expected 5G deployments.

5. UI (Underperform, $126 Target Price) – Total revenue forecasted to decelerate from recent highs, pressuring UI’s trading multiple. We are forecasting decelerated growthfor UI’s key end-markets including WLAN and campus switching driven by macro trends and increased competition.

Telecom & Networking Equipment OutlookExecutive Summary – 2021E Should Be a Better Year for Equipment Than 2020

68

Networking



CS Comm Equipment Performance vs. Major IndicesMost CS Comm. Equipment Coverage Has Underperformed the S&P 500; Underperformed the IGM Tech ETF Index Since Jan 1, 2019, But MSI In-Line With S&P500 Amid COVID; UI The Only Exception. Vaccine Lift Has Been Marginal.

0

50

100

150

200

250

300

11-Jul-19 11-Oct-19 11-Jan-20 11-Apr-20 11-Jul-20 11-Oct-20 11-Jan-21

Logarith

mic

Index

of

Share

Price

s (B

ase

100)

ANET CSCO JNPR FFIV

UI MSI COMM CS Comm. Equipment AVG

S&P 500 N.A. Tech ETF (IGM)

COVID-19 Weighed on Group in 2020, But Returns Have Underperformed Even Before

Virus Effects on Comm. Equipment Dating Back to 2H19. Following Biden’s Vaccine

Timeline, Group Returns Have Improved But Continue to Lag Broader Tech Returns.

69

Comm Equipment Forward EPS (FY2) MultiplesUnlike Major Market Indices/Markets (S&P500, Nasdaq), Com. Equipment Stocks Have Not Seen Multiples Expand. COVID-19 Impacts Continue to Weigh on Group Despite Vaccine Announcement.

Networking



0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

Jan-19 Jul-19 Jan-20 Jul-20 Jan-21

P/FY

2 E

PS

ANET COMM CSCO UI MSI FFIV JNPR Average

ANET and UI Saw Large Multiple Expansions in 2H20: These expansions were predominantly driven byidiosyncratic fundamentals (better revenue/EPS results in 3Q 2020 rather than market multiple expansions.

Companies that should see further multiple expansions include FFIV/MSI driven by their software business

transitions and robust core revenue growth sustainability, a 2021 dynamic we believe should play-out.

70

Outlook: Channel Checks for 1Q 2021 ResultsOur Channel Checks Include Inputs From: (1) Data Center Infrastructure Providers (Colocation); (2) Hybrid Cloud Vendors (Managed Services & Web Hosting Providers etc.); (3) Equipment/System Integrators; and (4) Value Added IT Resellers.

Networking



Equipment Type Channel Check Summary

Data Center

Switching – Cloud

Service Providers &

Hyperscalers

Data Center Switching demand from Cloud Service Providers and Technology customers has been strong in 1Q21, and the trajectory for 1H21 is more

positive than what some of the equipment coverage may have suggested, in our view. And, we are incrementally more positive following our checks on the

trajectory of cloud SP spend going into 1H21. Most of our conviction stems from the commentary we have heard regarding continued hyperscale data

center signings and significant facility openings in the next 6 months― facilities ready for data center switch shipments. Additionally, when reviewing the

Hyperscale Capex spending acceleration in 2021E by North American Hyperscalers, we are more constructive than current market expectations; the

aforementioned dynamics put ANET in a position to benefit given the rapid pace of data center densification and scale across numerous regions at a time.

400G Shipping at Scale Likely 2H21E/1H22E: Based on our industry checks, 400G switches shipping at scale by 2021 remains unlikely based on our industrychecks with industry engineers and end users when discussing the 400G switching upgrade/deployment opportunity. Most of our industry checks highlighted that

most of the 2016 to 2018 data center build vintages do not need to be upgraded to 400G switching speeds from 100G until 2H21 or early 2022 (~5yrs in

operation versus the suspected ~3yrs in our prior sector outlooks) given their optimized electrical efficiencies, aligning with the dynamics that equipment vendors

have discussed on earnings calls relating to cloud customers running their equipment longer and hotter than they have before. Commentary around CSCO/JNPR

insertions into cloud networks were not prevalent, no mentions or wins for any of them, whereas ANET came up a few times for Tier 1 data center

market designs.

Data Center

Switching &

Equipment (ADC,

Blades, etc.) –

Enterprise

We have heard numerous reports that enterprise deals that began negotiations in 2020 were delayed in 1Q 2021 with the following reasons

mentioned: (1) WFH/in office staff rightsizing taking more time to figure out; (2) Solarwinds hack leading to network vulnerability assessments, slowing

system integrator selection; and (3) chip/supply shortages for IT solution gear also called out as an issue. Other factors include equipment refreshes behindschedule and public cloud ecosystem lock-in as decelerators to the enterprise cloud transition in 1H21. We are now hearing that a big bulge of enterprise

deals won’t get signed until May-June 2021 and deploying/commencing in 2H21. ANET, along with its new offerings, is expected to make significant

progress in DC switching this year. Checks were positive on the soundness of the FFIV Voltera acquisition and we expect FFIV to maintain its very relevantproduct/services portfolio, trekking better than expectations from a business perspective than most industry experts thought 12 months ago, but no

acceleration detected to make us more constructive going into quarterly results. CSCO/JNPR came up in checks, but little stood out as noteworthy from a

deal perspective for 1Q21. Most experts believe 2021 is CSCO’s “breakout year” to take back market share and win a series of new major enterprisedeals, expectations are very high whereas reported deal flow has not kept up with the hype.

Service Provider

Routing and Carrier

Switching

Positive commentary on quarter checks for 1Q20 from SPs. There continues to be order flow by cable/telecom customers swapping out 10Gequipment for 100G switching/SP routing, which was better in 1Q21 versus 4Q20. Despite the consistent order flow, this segment has underperformed

especially for core providers CSCO & JNPR, and this trend may improve in 1Q21, but strength extending through 2021 unclear.

Campus Switching &

WLAN

Based on 4Q20 earnings results and the lack of reconciliation of channel checks to actual results, we do not believe summarizing our checks for Campus

Switching & WLAN are additive. We do believe there is continued pressure on this product group, but Federal funding seems to be backstopping many

issues which was shown explicitly through CSCO’s earnings results last quarter (and their 1Q20 revenue guidance).

71

Outlook: A Stabilization in Enterprise Into 2021Key Commentary From 4Q 2020 Earnings Calls

Networking


Following a challenging and tumultuous year for enterprise networking spend, we expect a stabilization of enterprise spend. Our channel checks suggestthat the enterprise customer base should continue its rebound from CY 4Q20 with some isolated impacts depending on the sectors and quality of a company’s customermix. In addition, we expect campus switching and WLAN end markets, specifically, will continue to see improving conditions and reach a stabilization in 2021.

Augmenting our checks, we highlight key commentary from CY4Q20 earnings calls from some of the largest enterprise focused companies both in/out of our coverage.


Company 4Q 2020 Key Earnings Results Comments

CSCO: On the F2Q21 (4Q20) call, mgmt. noted that the enterprise market remained soft driven by “some elongatedsales cycles and a continued pause in spending amongst some customers”. With a positive tone, mgmt. emphasized thecommercial orders led, followed by enterprise following 2008, noting that commercial orders grew 6% in 4Q20.

ANET: ANET’s guidance for 2021 was generally upbeat with the expectation for continued growth with Enterprise andProvider customers. Furthermore, mgmt. emphasized that ANET’s single OS, CloudVision has resonated with enterprisecustomers with the company just crossing over 1,000 CloudVision customers since they began shipping the product.

JNPR: Mgmt. believes that enterprise will be JNPR’s fastest growth vertical in 2021. In 4Q20, JNPR saw a 125%increase in new logos for Mist. And, while mgmt. is not accounting for a recovery in their 2021 outlook, mgmt. believesthat in the 2H21 dynamics should reverse and “enterprises go back to spending more like they used to”.

EQIX: Per mgmt.’s commentary, healthcare and retail as telehealth and digital initiatives had strong momentum in 4Q20resulting in a strong quarter for the enterprise vertical. In an upbeat tone, mgmt. noted that they believe that the

enterprise momentum they have seen over the past several years should absolutely continue into 2021.

DELL: In the F4Q21 (4Q20), DELL saw improved demand from large enterprises and continued improvement

from their small & medium customers. Looking ahead, mgmt. believes that the demand environment will continue toimprove noting that estimates from both IDC & Gartner see overall IT spending growing mid-single digits in CY2021.

72

Rural Digital Opportunity Fund (RDOF)RDOF a Solid Market Opportunity for Equipment Names in 2021 and Beyond.

Networking



Factor Details

What is RDOF?

The Rural Digital Opportunity Fund (RDOF) is a program initiated by the Federal Communications Commission (FCC)under the Universal Service Fund (USF) to address the digital divide in the U.S. In essence, the fund allocates $20.4Bin federal government grants over the next 10 years. The RDOF grant will take place in two phases: Phase 1 auction

results ($16B reverse auctioned) were announced in December 2020. Phase 1 focuses on areas with no internet access.And Phase 2 (Remaining $4.4B of funds) will focus on underserved areas and rely on updated FCC data that will moreaccurately depict which areas have coverage. The date for Phase 2 bids has not been announced yet.

Timing of Sector

Impact?

Regional service providers that have won funds from Phase 1 of the RDOF reverse auctions will need to have completed aLong Form Application (FCC Form 683), which includes a detailed technology and system design plan. A winning biddermust have a network design that describes how they will deliver the performance levels they’ve guaranteed in their bid toat least 95% of the required number of locations in each state by the end of the 6yr build-out period and for the durationof the 10yr support term, assuming a 70% subscription rate by the final service milestone. We expect the start of the

tailwind to comm. equipment will begin to materialize in a more meaningful way in 2H21 as the deadlines to

get final approval of funding for Phase 1 will run until June 2021 (several year tailwind as projects commence).

Equipment

Categories to

Benefit

Vendors that that sell fixed line access equipment, fiber termination points and/or in-home equipment, CPE

systems, and Wi-Fi mesh systems are poised to benefit.

Stock Calls

Indexed to RDOF

CommScope (COMM) has A “long-tail of smaller customers [service providers] in Tier 2 and Tier 3 markets” and an end-to-end solution offering. On the 4Q20 earnings call, mgmt. noted that RDOF has generated enormous demand acrosstheir portfolio of fiber cable, hardened connectivity and fixed wireless products. COMM also rated Outperform in our

coverage.

73

Biden Infrastructure BillA Promise to Close the Digital Divide.

Networking



Factor Details

What is the Bill’s

Scope?

Separate from the coronavirus relief package (~$1.9T rescue plan), President Biden has offered up a massive $2.3T

infrastructure bill that aims to invest in America’s ageing infrastructure such as roads and bridges as well as

expanding broadband internet access and boosting funding for research and development. In addition, Biden has includedhigher corporate taxes to help pay for the package raising the corporate tax rate from 21% to 28%. Focusing onconnectivity, the bill prioritizes broadband expansion by allocating $100B to bring affordable internet to “all Americans” by2029. The bill seeks to achieve “100% high-speed broadband coverage” across the US, and aims to prioritize broadbandnetworks “owned, operated by, or affiliated with local governments, non-profits, and cooperatives”.

When will this Bill

impact the

Equipment

Sector?

The bill has not been approved yet. Cited by major news media outlets, House Speaker Nancy Pelosi (D-Calif.) hassaid her goal is for that chamber to pass the bill by July 4, 2021, which could mean that the bill won’t make it to theSenate until the middle of that month. Even when the bill is finally passed, the money is expected to be spent over an eightyear period providing an elongated tailwind for the comm. equipment sector.

Equipment

Categories to

Benefit

Depending on how Biden’s plan further defines “building 'future-proof' broadband infrastructure” massive fiber-to-the-

home (FTTH) investments could be necessary. Service providers like AT&T have pushed back arguing that “it is notpractical to assume fiber can or should serve every household in rural America” (Joan Marsh, EVP, AT&T). If the narrative

continues to focus on fiber, these investments may challenge cable providers and fixed wireless providers. However, webelieve that given the impractical nature of only utilizing fiber, a mix of investments (cable, fixed wireless) will be necessary,

Stock Calls

Indexed to

Biden’s

Infrastructure Bill

Within our coverage we see Cisco (CSCO), Commscope (COMM), and Juniper (JNPR) as key potential beneficiariesof the proposed Biden infrastructure bill. We believe of the three companies COMM may see the greatest uplift fromthe bill as it offers an extensive fiber-to-the-home (FTTH) portfolio for access cabling. COMM also rated Outperform in

our coverage.

74

COVID-19 – Imagining The New NormalBroadband for All, Pandemic Magnified Connectivity Inequalities


COVID-19 magnified the digital divide and inequality surrounding connectivity. In the U.S specifically, it is estimated that roughly ~10% ofall public school teachers live in households without adequate internet connectivity, and roughly 15-16M K-12 public school students, or 30% of allpublic K-12 students, live in households without either an internet connection or devices adequate for distance learning at home (Common Sense &BCG Report). Based on data aggregated from the National Conference of State Legislatures (NCSL), we estimate ~$1.48B (potentially more asthese are states that have publically disclosed information) of the CARES funding allocated to states has been spent on technology/broadband.Under the U.S treasury guidance, provided that funds are spent by Dec. 30, states may use their Coronavirus Relief Funds (CRF) to expand

broadband capacity for distance learning and telework. Given President Elect Biden’s vocal stance on closing the digital divide, we believe

there will be an increased focus on broadband connectivity for all leading to potential more funds and grants in the space (RDOF).

Source: NCSL

CARES Funds Allocated to Technology / Broadband Spending

State, Millions of $

Alabama $203.4 New Hampshire $50.0

Arizona $2.0 New York $48.0

California $61.5 North Carolina $39.0

Georgia $9.0 North Dakota $61.9

Idaho $40.7 Oklahoma $161.0

Iowa $85.0 Oregon $23.5

Kansas $60.0 South Carolina $50.0

Maine $10.6 Utah $28.9

Maryland $25.0 Vermont $31.1

Michigan $25.0 Virginia $30.0

Mississippi $267.0 Washington $24.3

Missouri $37.8 West Virginia $50.0

Nevada $50.0 Wisconsin $5.0

Total Spend $1,479.6

Networking

https://www.commonsensemedia.org/sites/default/files/uploads/pdfs/common_sense_media_report_final_6_26_7.38am_web_updated.pdf

75

Outlook: Forward Looking Product OrdersCSCO Service Provider Product Orders Materially Impacted by Decelerating Trends Since 2015, Negative Pressures Only Intensified Through 2020.

Networking



0

50

100

150

200

250

300

YE2015 F1Q16 F2Q16 F3Q16 F4Q16 F1Q17 F2Q17 F3Q17 F4Q17 F1Q18 F2Q18 F3Q18 F4Q18 F1Q19 F2Q19 F3Q19 F4Q19 F1Q20 F2Q20 F3Q20 F4Q20 F1Q21 F2Q21

Logi

rith

mic

In

de

x to

Re

po

rte

d O

rde

r G

row

th (

Bas

e 1

00

)

Total Cisco Enterprise Public Sector Commercial Service Provider Americas EMEA APJC

Despite High Expectations for 5G Equipment Upgrades and SP Capex Spending (See Tower REIT Section and next Slide

for Metrics), Service Provider Order Demand Still Declined in 2020: When charting CSCO’s product orders on a logarithmicbasis (across all reported order segments and regions), it is clear that service provider customer demand has been the clear laggard inCSCO’s results, largely driven by declining Cable and Telecom customer demand throughout the year. Given COVID-19 headwinds,other customer segments, including Commercial and Enterprise exacerbated the total product order declines. In 2021, we expect

lumpiness in the Service Provider segment, and anticipate positive inflections in the Enterprise, Commercial, and Public

Sector categories after already reporting better than CS expected results last quarter.


5G Cycle: Global Wireless Capex OutlookWe Remain in the Early Innings of an Extended Wireless Generation Cycle. Western Europe and India to See Large Step-Ups in Spend in 2021E.

Wireless capex (US$ bn) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E

Western Europe 17.8 19.0 20.7 21.7 21.9 24.3 25.5 23.5 22.8 22.3 22.3 21.0 22.1 22.5 22.3

% change -9% 7% 9% 5% 1% 11% 5% -8% -3% -2% 0% -6% 5% 2% -1%

North America 21.3 24.4 26.9 30.7 34.5 33.6 32.3 29.7 30.3 31.5 33.1 32.4 35.0 37.4 36.7

% change -7% 15% 10% 14% 13% -3% -4% -8% 2% 4% 5% -2% 8% 7% -2%

Asia-Pacific 73.3 63.1 64.1 71.7 80.9 84.4 92.2 81.5 75.1 76.2 79.0 82.5 85.3 87.0 88.8

% change 3% -14% 2% 12% 13% 4% 9% -12% -8% 1% 4% 4% 3% 2% 2%

China 41.6 30.9 31.4 33.3 42.9 47.3 51.5 41.7 35.9 33.7 36.1 41.9 42.7 42.7 42.7

% change 24% -26% 2% 6% 29% 10% 9% -19% -14% -6% 7% 16% 2% 0% 0%

India 6.2 7.1 4.4 4.1 3.6 5.2 8.1 6.9 6.3 7.9 6.3 4.8 5.9 6.2 6.6

% change -24% 15% -38% -7% -11% 44% 55% -15% -8% 25% -20% -25% 25% 5% 5%

Asia Pacific ex China, India 25.6 25.1 28.3 34.2 34.4 31.9 32.6 32.9 32.9 34.5 36.6 35.9 36.6 38.0 39.6

% change -13% -2% 13% 21% 0% -7% 2% 1% 0% 5% 6% -2% 2% 4% 4%

Latin America 13.1 14.4 18.9 20.7 21.2 22.5 20.7 17.8 17.7 18.0 18.6 13.7 15.2 15.5 16.0

% change -19% 10% 31% 10% 3% 6% -8% -14% -1% 2% 3% -26% 11% 2% 3%

Emerging EMEA 25.2 25.8 29.3 25.2 26.0 26.6 24.8 22.0 21.6 22.7 22.7 22.2 22.9 23.5 24.5

% change -7% 2% 14% -14% 3% 2% -7% -11% -2% 5% 0% -2% 3% 3% 4%

Global wireless capex 150.8 146.7 159.8 169.8 184.6 191.5 195.5 174.6 167.4 170.7 175.7 171.8 180.5 186.1 188.3

% change -4% -3% 9% 6% 9% 4% 2% -11% -4% 2% 3% -2% 5% 3% 1%

US$ bn 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E

Wireless capex 150.8 146.7 159.8 169.8 184.6 191.5 195.5 174.6 167.4 170.7 175.7 171.8 180.5 186.1 188.3

% change -4% -3% 9% 6% 9% 4% 2% -11% -4% 2% 3% -2% 5% 3% 1%

Wireless equipment spend 62.3 58.3 65.2 59.9 59.8 63.5 64.8 59.8 54.9 51.9 55.9 61.7 65.4 67.9 69.2

% change -7% -6% 12% -8% 0% 6% 2% -8% -8% -6% 8% 10% 6% 4% 2%

Equipment to capex (%) 41.3% 39.7% 40.8% 35.2% 32.4% 33.1% 33.2% 34.3% 32.8% 30.4% 31.8% 35.9% 36.3% 36.5% 36.8%

4G rollouts during 2011-2015: Wireless capex rose from ~$150bn pre 4G to as high as $195bn at the peak of 4G in 2015.This led to

wireless equipment spend also peaking at $65bn in 2015.

Slower but Longer 5G cycle ahead: As telcos try to manage a balance between 5G investments and service revenue growth and FCF, we believe that 5G capex cycle may see slower growth than what we saw in 4G cycle. But equally we see a longer sustained investment cycle with focus shifting towards 5G

resulting in equipment to capex ratio rising from the lows of 30% in 2018 to 36% in 2020

Source: Credit Suisse Research and Estimates from Credit Suisse Analyst Achal Sultania.

Networking

77

Networking End Market (Revenue)2021 Growth in Mid-Single Digit Range; Lifted by DC Switching and WLAN.

Networking


Source: Credit Suisse Research, Omdia data & estimates

Networking Market

($millions) 2017 2018 2019 2020E 2021E 2022E 2023E 2024E '14-'19 '19-'24

Switching

Carrier Switching 2,413 2,294 2,380 2,161 2,239 2,174 2,098 2,026 (2.2%) (3.2%)

Data Center Switching 11,510 11,663 12,002 12,056 12,383 13,034 14,086 14,591 7.4% 4.0%

50GB & Below 9,046 7,693 6,769 5,825 5,105 4,544 4,063 3,607 (4.1%) (11.8%)

100GB & Above 2,464 3,970 5,233 6,231 7,278 8,490 10,023 10,984 131.8% 16.0%

Campus Switching 13,430 15,453 15,749 14,521 15,713 17,198 17,521 17,379 3.4% 2.0%

Total Switching 27,353 29,410 30,131 28,738 30,334 32,406 33,706 33,995 4.3% 2.4%

Y/Y Growth 7.9% 7.5% 2.5% -4.6% 5.6% 6.8% 4.0% 0.9%

Application Delivery Controllers

Hardware 1,348 1,214 1,074 972 816 721 627 547 (8.4%) (12.6%)

Virtual 515 577 648 696 781 803 822 829 18.9% 5.0%

Total ADC Market 1,862 1,791 1,722 1,668 1,597 1,523 1,450 1,375 (2.4%) (4.4%)

Y/Y Growth -5.1% -3.8% -3.9% -3.2% -4.2% -4.6% -4.8% -5.1%

Routing

Service Provider Routing 13,171 12,757 12,673 12,263 12,652 12,859 12,987 13,128 0.1% 0.7%

Core Routers 3,471 3,564 3,385 3,098 3,463 3,587 3,710 3,838 5.2% 2.5%

Edge Routers 9,700 9,193 9,288 9,165 9,189 9,272 9,277 9,290 (1.5%) 0.0%

Enterprise Routing 2,920 2,852 3,132 2,594 2,756 2,856 2,882 2,888 1.3% (1.6%)

Optical Networking 14,496 14,649 15,448 16,181 16,830 17,591 18,428 18,428 4.0% 3.6%

Total Routing Market 30,587 30,258 31,252 31,038 32,238 33,305 34,297 34,444 2.0% 2.0%

Y/Y Growth 2.4% -1.1% 3.3% -0.7% 3.9% 3.3% 3.0% 0.4%

WLAN

Access Points 4,654 5,131 5,171 5,225 5,995 6,844 7,636 8,332 7.0% 10.0%

Controllers 1,207 1,415 1,528 1,679 1,633 1,653 1,717 1,812 7.2% 3.5%

Total WLAN Market 5,862 6,546 6,699 6,904 7,628 8,497 9,354 10,144 7.0% 8.7%

Y/Y Growth 10.8% 11.7% 2.3% 3.1% 10.5% 11.4% 10.1% 8.4%

Overall Networking Market 65,664 68,006 69,805 68,347 71,797 75,732 78,807 79,958 2.4% 2.8%

Y/Y Growth 5.1% 3.6% 2.6% -2.1% 5.0% 5.5% 4.1% 1.5%

CAGR

78

Networking End Market (Units/Ports)Growth in High-Single Digit Range; Led by WLAN and DC Switching Units.

Networking


Source: Credit Suisse Research, Omdia data & estimates

Networking Market

(Unit/Ports in millions) 2017 2018 2019 2020E 2021E 2022E 2023E 2024E '14-'19 '19-'24

Switching (Ports)

Carrier Switching 10.030 10.430 10.130 9.881 10.501 10.395 10.232 10.074 7.8% (0.1%)

Data Center Switching 55.428 58.512 57.908 60.914 65.231 69.976 78.899 86.378 10.7% 8.3%

50GB & Below 47.512 44.111 39.977 39.206 38.926 37.417 37.387 36.313 2.8% (1.9%)

100GB & Above 7.916 14.402 17.931 21.708 26.306 32.559 41.512 50.065 331.0% 22.8%

Campus Switching 582.995 631.868 663.512 630.510 680.735 715.667 738.062 746.272 5.8% 2.4%

Total Switching 648.453 700.810 731.550 701.305 756.468 796.037 827.193 842.724 6.2% 2.9%

Y/Y Growth 8.6% 8.1% 4.4% -4.1% 7.9% 5.2% 3.9% 1.9%

Application Delivery Controllers (Units)

Hardware 0.051 0.0436 0.0353 0.0331 0.0284 0.0252 0.0220 0.0192 (11.0%) (11.5%)

Virtual 0.067 0.074 0.080 0.087 0.098 0.100 0.102 0.103 13.5% 5.1%

Total ADC Market 0.118 0.117 0.114 0.114 0.114 0.114 0.112 0.112 1.5% (0.3%)

Y/Y Growth -6.8% -0.8% -2.8% 0.5% -0.1% -0.5% -1.6% 0.0%

Routing (Ports)

Service Provider Routing 8.320 8.227 8.088 7.799 7.958 7.958 7.902 7.868 3.5% (0.6%)

Core Routers 0.602 0.619 0.577 0.512 0.552 0.555 0.565 0.590 3.9% 0.4%

Edge Routers 7.718 7.608 7.511 7.287 7.406 7.403 7.337 7.278 3.5% (0.6%)

Total SP Routing 8.320 8.227 8.088 7.799 7.958 7.958 7.902 7.868 3.5% (0.6%)

Y/Y Growth 0.1% -1.1% -1.7% -3.6% 2.0% 0.0% -0.7% -0.4%

Enterprise Routing (Ports) 8.036 6.979 8.148 7.330 7.897 8.400 8.634 8.744 1.9% 1.4%

Y/Y Growth -10.8% -13.2% 16.8% -10.0% 7.7% 6.4% 2.8% 1.3%

WLAN (Units)

Access Points 26.718 29.631 31.415 34.290 38.138 42.654 47.126 51.528 12.9% 10.4%

Controllers 0.191 0.238 0.207 0.184 0.178 0.180 0.180 0.180 (1.3%) (2.7%)

Total WLAN Market 26.909 29.869 31.622 34.475 38.317 42.834 47.306 51.707 12.8% 10.3%

Y/Y Growth 14.6% 11.0% 5.9% 9.0% 11.1% 11.8% 10.4% 9.3%

CAGR

79

Networking Market Share DynamicsFFIV and ANET Are Leaders for Respective Market Share Gains.


Below we provide a market share by revenues comparison for several of the comm. equipment companies in our coverage. We highlight that FFIVand ANET have led the coverage group with double digit market share gains (percent change) gains since over the past five years. Furthermore, wecall out FFIV’s dominance in its respective markets (physical ADC and virtual ADC) which we do not think investors are fully appreciating.

Source: Omdia

Revenue Market Share of Key Product Segments

Networking

2016 2017 2018 2019 2Q 2020 3Q 2020 4Q 2020 '16 to Latest (bps)

FFIV

pADC 45.1% 45.1% 47.9% 48.9% 50.1% N/A N/A 498

vADC (virtual) 35.6% 40.9% 45.6% 48.7% 47.6% N/A N/A 1,197

ADC (total) 42.7% 43.9% 47.1% 48.8% 49.1% N/A N/A 640

CSCO

Data Center Switching 55.1% 50.2% 43.6% 41.0% 36.8% 43.4% N/A -1,166

Campus Switching 57.6% 54.2% 55.6% 55.6% 52.5% 51.4% N/A -616

WLAN 44.9% 42.5% 41.7% 41.5% 40.4% 40.0% 35.8% -486

Enterprise Routing 70.5% 66.1% 67.1% 67.9% 68.3% 66.2% 61.7% -429

SP Routing 31.0% 29.7% 29.5% 27.4% 23.9% 27.6% 20.4% -344

SP Switching 46.0% 46.8% 53.1% 50.2% 47.9% 52.9% 48.2% 691

JNPR

Data Center Switching 5.4% 5.7% 4.4% 4.1% 3.3% 3.2% N/A -221

Campus Switching 2.4% 2.3% 2.7% 2.4% 2.8% 2.8% N/A 44

WLAN 0.0% 0.0% 0.0% 0.0% 1.1% 1.0% 1.0% 103

SP Routing 18.2% 16.6% 14.4% 12.8% 12.6% 14.0% 13.0% -519

ANET

Data Center Switching 9.7% 12.4% 15.8% 16.8% 14.1% 14.6% N/A 489

Campus Switching 0.0% 0.0% 0.0% 0.1% 0.4% 0.4% N/A 38

80

Data Center Switching Share Remains DynamicANET Share Continues to Expand in DC Switching Driven by Cloud/Hyperscale. 2021 May Be a Large Enterprise Breakout Year for ANET as Demand Accelerates.

Networking



ANET's Extensible Operating System (EOS) Continues to Be One of the Most Compelling Sales Propositions for the Cloud Service

Providers: Its customer ease-of-use and breadth of flexibility has enabled ANET to take market share away from the other companies (mostnotably CSCO); ANET has more than doubled its market share by revenue from 6.3% in 2014 to 16.8% as of 2019. We see scope for ANET’s

market position to continue expanding, driven by both continued cloud growth and enterprise demand acceleration in 2021.

CSCO: We do not expect CSCO’s significant market sharerebound will continue in 2021.

ANET: High expected enterprise demand presents a verysizeable opportunity for ANET to expand market share in DC

switching in 2021, in addition to strong cloud share.

67.2%

61.6%59.2%

55.5%

50.5%

43.2%41.1% 41.4%

36.8%

43.4%

6.3%8.3% 9.8%

12.5%15.6% 16.8% 16.3%

14.1% 14.6%

-

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

Mark

ets

hare

by R

eve

nu

e

Cisco White Box Other Arista

81

Data Center Switching: 100G DC Switching ShareMarket Share Split by CSCO/ANET Across Enterprise/Hyperscale with ANET Advancing Fastest in Americas, Driven by Major Cloud Deployments.

Networking



Global 100G Switching Market Shares

EMEA 100G Switching Market Shares APAC 100G Switching Market Shares

Americas 100G Switching Market Shares

36.3% 35.4%

25.7%28.1% 28.6%

26.0% 25.1%21.0% 20.6%

63%

53%

38%

39% 31% 32%

34% 34%31%

37%

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20100G

Sw

itch

ing

Mark

et

Sh

are

by R

evenu

e

Arista Cisco White Box Juniper Other

0.0%

21.8%

26.8%

17.8%

24.0%26.2%

19.4%15.2%

10.8%13.3%

72%

66%

48% 48%

40%42%

44% 43%

37%

44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

EM

EA

100G

Sw

itch

ing

Mark

et

Sh

are

by

Revenu

e


0.0%

21.7%14.6%

11.1%13.0% 11.1%

8.7% 9.7%5.9%

7.9%

67%

56%

35%37%

28% 27%24% 23%

21%24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

AP

AC

100G

Sw

itch

ing

Mark

et

Sh

are

by

Revenu

e


0.0%

45.2%44.2%

33.5%34.5%

36.5%36.1% 36.7%

33.6%30.9%

58%

47%

35%37%

29% 30%34% 35% 34%

42%

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

Am

eri

cas 1

00G

Sw

itch

ing

Mark

et

Sh

are

by

Revenu

e


82

Data Center Switching: 400G Share Remains Low400G Share Forecasted to be ~3% in 2021E, ~7% in 2022E, and ~16% in 2023E… Ramp Pushed Out Further Due to Optics Constraints & COVID

Networking



Total DC Switching Growing 4.9% CAGR Through ’24E Average Selling Price By Port Speed Stable for 100G

ANET Capturing Fair Share of 100G+ DC Switching Market 400G Only ~3%/~7% of DC Switching Market ’21/’22

$0

$4

$8

$12

$16

2018 2019 2020 2021 2022 2023 2024

Revenue by S

peed (i

n $

bil)

Other 10GE 25GE 40GE 100GE 400GE

36.3%35.4%

25.7%28.1% 28.6%

26.0% 25.1%21.0% 20.6%

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q2010

0G

Sw

itch

ing

Mark

et

Sh

are

by R

eve

nu

e


35%26%

17%11% 7% 4% 2%

7%13%

20%24%

26%24% 22%

22%15%

10%5%

2%0%

0%

34%43%

51%56%

57%55%

54%

0%1% 3% 7%

16% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 2019 2020 2021 2022 2023 2024

Revenu

e M

ark

et

Sh

are

(%

)

Other 10GE 25GE 40GE 100GE 400GE

$875

$311 $276 $291 $285 $271 $248 $218 $191

$572 $520 $456

$392 $356

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2016 2017 2018 2019 2020 2021 2022 2023 2024

AS

P B

y P

ort

Sp

eed

1GE 10GE 25GE 40GE

50GE 100GE 200GE 400GE

83

Data Center Switching: White BoxBare Metal Switching Market Forecast to Grow at a ~26% CAGR From 2019 To 2024; White Box Vendors Represents ~49% of Bare Metal Switching Market.

Networking


Based on survey data from Omdia’s North American Leadership Survey, 76% of respondents adopted OCP switches in 2019, a large step-up

from the 60% of respondents in the 2018 survey. This increase from the prior survey highlights that OCP-certified switch acceptance is still rising. In

addition, 81% of respondents expect to be using OCP-certified switches in 2021. Currently, white box vendors represent ~49% of the bare metalswitching market. OCP-certified equipment is offered by these white box vendors which include Edgecore, Delta Networks, Mellanox, and NVIDIA. The Bare

Metal Switching Market is Expected to Grow to $4.17B at a ~26% CAGR from 2019 to 2024.

10%

22%

76%

7%

12%

81%

0% 20% 40% 60% 80% 100%

Don't Know

No

Yes

Use OCP Switches

2021 Now

12011329

1913

2430

2907

3571

4172

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

CY18 CY19 CY20 CY21 CY22 CY23 CY24

Gro

wth

(y/

y)

Rev

enue

s ($

M)

Revenues ($M) y/y Growth

Impacts to Incumbent Data Center Switching Vendors is Negative: Generally, as white box adoption increases and its growth continues to outpace theoverall data center switching market, its adoption resistance begins to ease driven by increased service/maintenance/know-how. This could grow to be a very

negative dynamic in the medium-term for major networking providers. Long-term we believe this could have negative effects on Juniper Networks and Arista

Networks that work heavily with customers in data center switching environments. However, based on our most recent work on Arista Networks, our

findings and company’s view is that their relevance may increase than decrease overtime with customers who currently deploy white box

solutions in their networks, which was one of the key reasons why we upgrade Arista to Outperform (illustrated in following slides).

OCP Certified Switch Adoption [n=139] Bare Metal Switching Forecast To Grow At 26% CAGR CY19-24

84

ANET: White Box Threat DissolvingKey Differentiator – ANET Continues to Innovate and Evolve its Proprietary EOS Software; ANET Has Demonstrated That It Can Add Feature Rich Capabilities Without Sacrificing Performance Shown By Its Enterprise Customer Adoption.

Networking


ANET’s EOS software utilizes a multi-processstate sharing architecture separating stateinformation and packet forwarding from protocolprocessing and application logic. The EOSarchitecture is grounded upon a centralizedSystem Database (State) where system state anddata is stored and maintained. When data in theState needs to be accessed, an automatedpublish/subscribe/notify model is employed. Thisdistinct architecture focused a centralized

database allows for a (1) self-healing, resilientnetwork, (2) easier software maintenance, (3)

module independence, (4) higher software qualityoverall, and (5) quicker time-to-market for newfeatures. The legacy approach is contingent uponan embedding state system and manualintegration of subsystems without an automatedstructure core (ANET’s State) resulting in moretime-consuming and difficult recoveries from

system process failures/restarts. Overall,

ANET’s EOS software provides organizations

with more visibility, improved agility, and self-

healing processes, and this technology is a

differentiator especially when

comparing/contrasting open compute

software solutions (white box) to ANET’s

products/software.

Source: Company Data

Legacy Approach to Network Operating System vs. ANET’s EOS

85

ANET: White Box Threat Dissolving Data Center Switching― 100G Market Demonstrates Stabilized Share for ANET; White Box Not Disrupting ANET’s Overall Ethernet Switching Opportunity

Networking


Based on Omdia’s 3Q20 Campus vs. Data Center Ethernet Switching Tracker, we can see that while ANET’s market share has fluctuated quarter to

quarter over the past four years, it has remained relatively stable at ~21% of 100G Ethernet data center switches. Similarly, white box switchingmarket share by revenues for 100G has declined slightly over the past four years from 20% to 15%. We believe this stabilized share highlights

that white boxes do not pose as large as a threat than we had initially thought to ANET. Looking ahead to the upcoming 400G data center

switching market, we note that early market share data highlights ANET, CSCO, and white box as early movers. We note that the market for 400Gdata center switching is nascent, with 3Q revenues totaling around~$26M. Based on the early adopters for 400G, large cloud providers

upgrading their data center interconnect, we believe ANET will be a key early mover in the 400G market.

Source: Omdia 2Q20 Campus vs Data Center Switching

100G Market Shares Remained Relatively Stable Over Past 4yrs 400G Ramp in Very Early Stages; Total 3Q Market Revs at ~$26M

0.0%5.9%

14.8%

6.8%

18.2% 20.2%

95.2%

84.9%

57.1%60.8%

49.5%54.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

40

0G

DC

Ma

rke

t S

sh

are

By R

eve

nu

es

ANET CSCO White Box Other

22.0%20.6%

19.5% 15.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

2Q

20

3Q

201

00

G D

C M

ark

et

Sh

are

By R

eve

nu

es

ANET White Box

86

ANET: White Box Threat DissolvingANET an Early Mover in 400G; Robust Data Center Switching Offering

Networking


In 2019, ANET released its 400G router-switch platforms (7800R Series), demonstrating ANET’s ability to be an early mover for next-generationtechnologies. And, we believe the white box threat is diminishing as cloud providers recognize the benefits of ANET EOS’ multi-process state andthe increasing complexities, engineering rigor, and associated costs associated with white-box switching. Bottom-Line: Cloud titan and service

providers will continue to look to ANET for data center switching based on the company’s (1) proprietary EOS software and (2) quick

adoption and integration of leading edge components (merchant silicon use, latest data center switching chip).


ANETs 400G Data Center Switching Offerings

Modular Spine

Switches

Cloud

Optimized

Switches

Dynamic Deep

Buffer,

Universal Leaf

and Spine

Fixed

Configuration

Switches

87

ANET: White Box Threat DissolvingKey Differentiator― ANET Continues to Innovate and Evolve its Proprietary EOS Software Across Equipment Types and Platforms.

Networking


We highlight ANET’s dedication to invest in EOS to maintain the best-in-breed capabilities for cloud, service providers, and enterprise customers.We note that all enhancements have stuck to ANET’s core cloud-base principles of openness, programmability, and quality. In our view, ANET’smajor customer base, cloud providers, will increasingly turn to ANET for its innovation and agility as they look to seamlessly roll-out new services andfeatures. Furthermore, the unrivaled concentration and continued investment in the ANET’s proprietary EOS gives us confidence that

the company will continue to be a key partner and innovator for its major customer base, cloud titans.


History of Rich Innovation in ANET’s Extensible Operating System

88

ANET: White Box Threat DissolvingLong Standing & Close Relationships with Open Networking Community

Networking


In May 2020, ANET announced the Arista SAI (Switch Abstraction Interface) offering, providing customers with have the flexibility to deploy SONiCsoftware on Arista switching platforms allowing them to leverage open source software with EOS. The SAI initiative emerged from ANET’spartnership with MSFT. SONiC, an open source network operating system that runs on multiple hardware platforms, was developed initially by MSFTfor the Azure cloud platform. In our view, the long track record of working with the open networking community and some of largest

cloud titans underscores ANET’s commitment to reducing complexities and challenges for customers through continued innovation.

We believe that this virtual cycle of partnership may fuel further collaborations and increase ANET’s relevance to cloud providers.


History of ANET’s Open Networking Collaboration SAI Layer Enables SONiC to Run on ANET Switches

89

Networking


Source: Forester, Credit Suisse Research, Company data

White Box Switch Vendors

Bare Metal SwitchBranded Bare Metal

(BBM)White-box (WB) Switch Proprietary Switch

Definition

Hardware only with basic

support from original design

manufacturer

Hardware only with original

equipment manufcaturer

branding and

warranty/support/services

Commodity hardware and

Network Operating System

preloaded

Proprietary hardware and


Hardware Cost Low Low Low High

Type of Hardware ComponentsOff-the-shelf components

including ASIC

Off-the-shelf components

including ASIC

Off-the-shelf components

including ASICProprietary (Custom ASIC)


None (customer can load

PicOS/Cumulus/Big

Switch)

Non (customer can load

PicOS/Cumulus/Big

Switch)

Vendor's own or 3rd party

already loaded (Example:

Arista EOS)

Vendor's own Network

Operating System (Cisco

ACI, Arista EOS, etc.)

Examples / Vendors

Accton AS5712

(Broadcom)

Penguin 4800 (Broadcom)

Quanta 3048 (Broadcom)

Dell S4810-ON/S6000-

ON (Broadcom)

HP 5700/5712/6700

(Broadcom)

HP 5700/5712/6700

(Broadcom)

Arista 7250x (Broadcom)

Dell S6000 (Broadcom)

HP 5930 (Broadcom)

Nexus 7000 / 9000

HP 3500/5400/8200 (HP

ProVision)

Juniper 9200 (Trio)

ANET: White Box Threat DissolvingUnderstanding Key Differences Between White Box and Branded Are Important.

90

Service Provider RoutingCSCO Gradually Losing Share, Seen Through SP Product Orders (See Earlier Slides)

Networking



Global Carrier Routing Market Shares Americas Carrier Routing Market Shares

EMEA Carrier Routing Market Shares APAC Carrier Routing Market Shares

46.8%45.2%44.7%41.5%

43.4%47.3%

44.3%40.9% 39.6%

42.1%

36.0%

26.2%26.4%26.2%29.3% 30.0%

24.1% 24.5%27.0% 25.6%

24.0%22.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Am

eriacs

Mark

et

Share

by

Reve

nue

Cisco Nokia Juniper Brocade Other Huawei

21.7%23.2% 22.7%

20.7%18.2% 17.3%

15.2%18.6%

12.5%14.2%

10.7%9.0%6.9% 7.9% 6.9% 6.5% 5.6% 4.1% 4.3% 4.1% 5.7% 5.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

AP

AC

Mark

et

Share

by

Reve

nue

Cisco Nokia Juniper ZTE Other Huawei

34.4%35.4%

31.2% 30.4% 30.5%27.8% 29.1%

23.0%

28.8%30.7%

20.8%19.6%18.0% 18.7% 17.9%

15.5%17.3%

14.4% 13.4% 14.5% 14.8% 15.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

EM

EA

Mark

et

Share

by

Reve

nue


35.4%35.2% 34.3%

31.0%29.7% 29.5%

27.4%26.0%

23.9%

27.7%

20.4%18.8%

17.6% 18.5% 18.2%16.6%

14.4%12.8% 13.0% 12.6%

14.1% 13.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Glo

bal M

ark

et

Sh

are

by R

evenu

e


91

Service Provider RoutingCSCO New SP Routing Innovations Aimed at Webscale and Telecom Customers; We Anticipate Elevated Pressures in SP Routing, Impacting JNPR Negatively

Networking


Cisco Silicon One, 8000 Series Router, and Flexible Buying Options:

CSCO introduced the Cisco Silicon One December 2019, which is a networkingsilicon architecture developed for the rapidly growing networking needs of globalcontent and web scale customers that has the versatility to address numeroususe cases. CSCO says that this is the industry's first networking chip designed tobe universally adaptable across service provider (SP) and web-scale customer

markets. Designed for both fixed and modular platforms, it can managechallenging requirements that have evolved materially across the routing market.First, CSCO announced the Silicon One 'Q100' model and how it surpasses the10Tbps routing milestone for network bandwidth without sacrificingprogrammability, buffering, power efficiency, scale or feature flexibility. Second,

the company released the new Cisco 8000 Series, its new carrier class router,built on the new Cisco Silicon One Q100 architecture with a new operatingsystem, the IOS XR7. XR7 is designed to be lightweight, highly programmable,and optimized for 400GB networking. Finally, CSCO announced new purchasing

options that enable customers to consume the company's technology throughdisaggregated business models, including non-CSCO applications, which hasgenerally not been par for the course at CSCO.

Addressing Traffic and Network Cost Surges: CSCO plans on leveraging itssilicon, routing appliance, and optics to differentiate itself ahead of broad based

5G deployments to address the network bottlenecks that have been createdacross the industry due to surging video streaming traffic. Importantly, CSCO

says that innovation has not kept up with rising traffic loads, and this has led toelevated levels of OPEX and TCO for SP customers.

JNPR Implications Negative: Based on what CSCO is addressing, we believethis is more negative for Credit Suisse Underperform-rated JNPR given the directoverlap in both silicon innovations and SP routing capabilities.

New Cisco 8000 Series Routers

Cisco’s Pluggable Announced

Source: Cisco December 2019, Credit Suisse Research.

92

Carrier SwitchingCSCO Market Share Stable, Even in Huawei Dominated APAC.

Networking



Global Carrier Switching Market Americas Carrier Switching Market

EMEA Carrier Switching Market APAC Carrier Switching Market

79.7%81.8%

75.8%

83.4%85.8% 85.2%

70.6%73.9% 73.4%

76.4% 76.1%

0%

15%

30%

45%

60%

75%

90%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Am

eri

cas M

ark

et

Sh

are

by R

eve

nu

e

CSCO Huawei ZTE Other

13.3%

17.7%19.2%

21.3%23.0%

28.4% 28.2%

39.1%

27.8% 27.0%25.2%

0%

15%

30%

45%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

AP

AC

Mark

et

Sh

are

by R

evenu

e


59.5%62.3%

67.6%

60.1%56.6%

61.6%59.4%

56.0%

49.9%

60.7%

56.0%

0%

15%

30%

45%

60%

75%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

EM

EA

Mark

et

Sh

are

by R

eve

nu

e


40.3%43.4%

47.0% 46.0% 46.8%

53.1%

49.6%

54.1%

47.4%

52.2%

48.2%

0%

15%

30%

45%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Glo

bal M

ark

et

Sh

are

by R

eve

nu

e


93

Enterprise RoutingCSCO Remains Dominant Force in Enterprise Routing Market, Huawei Challenging CSCO in APAC But EMEA Offsetting Weakness.

Networking



Global Enterprise Routing Market Shares Americas Enterprise Routing Market Shares

EMEA Enterprise Routing Market Shares APAC Enterprise Routing Market Shares

85.4%84.9% 87.0% 87.3% 85.3% 85.6% 87.5% 86.2% 87.5% 86.7%82.7%

6.6%6.5% 5.0% 4.9% 5.8% 5.2% 4.5% 5.6% 5.1% 5.6% 4.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Am

eri

cas M

ark

et

Sh

are

by R

evenu

e

Cisco Teldat HPE Other Adtran Huawei

45.2%

40.5%42.7%42.3%

39.1%39.7%38.0%

33.7%33.5%33.9%

27.2%

7.4%8.0%10.6%10.8%12.0%

10.5% 9.9%

3.2%

8.2% 8.7%

20.8%

0%

10%

20%

30%

40%

50%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

AP

AC

Mark

et

Sh

are

by R

eve

nu

e

Cisco OneAccess Yamaha

H3C Other Huawei

81.4%78.6% 79.4%

70.3%65.1% 67.5% 67.3%

71.2%73.7% 72.9%

65.4%

3.1%5.1% 7.2%

13.9% 15.1%10.4% 12.4%

6.6%9.2% 7.4%

17.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

EM

EA

Mark

et

Sh

are

by R

eve

nu

e

Cisco Ekinops Teldat

HPE Other Huawei

74.6%71.1%

73.1%70.5%

66.1% 67.1% 67.9% 68.8% 68.3%66.2%

61.7%

2.9%4.0% 5.1%7.4% 8.9%

6.8% 6.8%3.0%

5.2% 4.9%

11.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Glo

bal M

ark

et

Sh

are

by R

evenu

e

Cisco H3C ZTE Ekinops Other Huawei

94

Enterprise/Campus SwitchingCampus Switching Remains CSCO’s Territory

Networking



Global Enterprise Switching Market Shares Americas Enterprise Switching Market Shares

EMEA Enterprise Switching Market Shares APAC Enterprise Switching Market Shares

44.0%

37.4% 37.9%

34.8% 33.8%

36.9%

32.9%

37.7%

29.5% 30.2%

1.6%1.4%

1.5% 1.2% 1.2%

1.3% 1.1% 1.2% 1.0% 1.3%1.4%

0.0% 0.0% 0.0% 0.0%

0.0% 0.0% 0.1% 0.1% 0.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

AP

AC

Mark

et

Sh

are

by R

evenu

e

Cisco HPE (Aruba) White Box

ZTE H3C Huawei

Other Juniper Arista

56.0%55.8%57.9%

54.6%

50.4% 51.9% 53.0% 53.3% 52.0%48.4%

2.0%2.1%

1.9% 1.6%

1.4% 1.9% 1.7% 1.4% 2.5% 2.1%1.2%

0.0% 0.0% 0.0%

0.4% 0.0% 0.0% 0.1% 0.2% 0.2%

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

EM

EA

Mark

et

Sh

are

by R

evenu

e

Cisco HPE (Aruba) D-Link

Dell Extreme Huawei


61.0%58.6%

60.6%57.6%

54.2% 55.6% 55.6%57.5%

52.5% 51.4%

2.4%0.0%

0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.4% 0.4%2.3%2.6%

2.5% 2.4% 2.3% 2.7% 2.4% 2.6% 2.8% 2.8%0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

Mark

et

Sh

are

by R

evenu

e

Cisco HPE (Aruba) Arista

H3C Juniper White Box

Extreme Other Huawei

74.0%74.2% 75.8% 74.6%70.7% 70.6%

73.1% 72.3%70.3% 68.6%

3.0%

3.6% 3.4% 3.7% 3.7% 4.2% 3.8% 4.3% 4.4% 4.2%3.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.4% 0.8% 0.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20

Am

eri

cas M

ark

et

Sh

are

by R

evenu

e

Cisco HPE (Aruba) White Box

Dell Extreme NETGEAR


95

Enterprise Campus Switching & WLAN EquipmentCOVID-19 Impacts to the New Normal: Extending the Remote Workforce Will Continue to Be a Priority in 2021, But May Prolong Demand Overhang.

Networking


Based on data from CSCO’s 2021 Global Networking Trends Report, an average of 4.7 times more employees are working from

home now compared to before the pandemic. When the pandemic first hit, IT teams struggled with scaling to cope with the sudden demandand numerous IT issues. Security remains a top priority when assessing the WFH model. We expect WFH will continue to be a dominant trend inthe 1H21, and LT employees will demand more flexibility. As enterprises consider a return to the workplace, the top priority focuses on deployingmore pervasive video conferencing suggesting that the WFH model and or less business travel will persist beyond the pandemic. The by-product

of this behavior may create a prolonged overhang on campus switching and WLAN equipment for office spaces.

Source: 2021 Global Networking Trends Report (See Report: 2021 Global Networking Trends Report.)

Top Four Challenges for Enabling Remote Workers Preparing for Safe Return to Workplace

35%

43%

52%

65%

0% 20% 40% 60%

IT Operations

App Performance

End-user Behavior

Security

30%

32%

36%

38%

62%

0% 20% 40% 60%

Establishing new workplace

safety measures such as

thermal cameras, touchless

elevator controls, etc..

Deploying proximity reporting

to maintain social distancing

Focused on remote NetOps

and help desk

Implementing social density

insights to ensure safe

working conditions

Deploying more pervasive

video conferencing

https://www.cisco.com/c/dam/en/us/solutions/enterprise-networks/2021-networking-report.pdf

96

Wireless Local Area Network (WLAN)CSCO Continues to Dominate WLAN Market Despite Intensified JNPR/ANET Comp.

Networking



Global WLAN Market Shares Americas WLAN Market Shares

EMEA WLAN Market Shares APAC WLAN Market Shares

50.6%48.5%

47.2%44.9%

42.6% 41.7% 41.5%39.0% 40.4% 40.0%

35.8%

1.5% 2.6% 2.9%4.4% 5.1% 6.1% 6.7% 6.6% 7.1%

9.6% 9.3%

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Glo

bal M

ark

et

Share

by

Reve

nue

Cisco Ruckus Other Huawei HPE (Aruba) Ubiquiti

54.1%52.0% 51.2% 50.2% 48.7% 47.6%

50.0% 49.7% 48.9% 49.0%45.1%

1.3%2.5% 2.7%4.4% 5.5% 6.5% 7.7% 9.0% 9.0%

10.8% 10.2%

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

Am

eric

as

Mark

et

Share

by

Reve

nue

Cisco Ruckus Other Aerohive HPE (Aruba) Ubiquiti

39.8%37.5%

35.8%

30.0% 29.0% 28.1%24.7%

26.6%24.3% 24.6%

22.6%

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

AP

AC

WLA

N M

ark

et

Share

by

Reve

nue

Cisco Ruckus Other Huawei HPE (Aruba) H3C

51.1%49.0% 47.5% 46.2%

43.8% 44.1% 42.3%40.1% 41.4%

38.6%34.7%

2.1%3.5% 3.9% 5.8% 6.5%8.8% 8.3%

12.8%8.7%

13.2% 13.8%

-10%

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20

EM

EA

Mark

et

Share

by

Reve

nue

Cisco Ruckus OtherHuawei HPE (Aruba) Ubiquiti

97

Wireless Local Area Network (WLAN)Recent Consolidation Intensifying WLAN Market Competition, COVID-19 Only Challenging Market Further; Wifi 6 Continues to be Most Attractive Opportunity.

Networking


Acquirer Target Date Market Share / Revenue Estimates / Comments

Date Announced:

August 2, 2018

Date Closed:

August 2, 2018

Arista acquired Mojo Networks to strategically address industry changes as

enterprises move to Internet of things (IoT) ready campuses. Mojo Networks, aleader in cloud-managed wireless networking, created its own cloud-managedproprietary technology, cognitive WiFi.

Date Announced:

March 4, 2019

Date Closed:

April 1, 2019

Juniper added Mist Systems to its portfolio for its cloud-managed wirelessnetworks powered by artificial intelligence (AI). The acquisition strengthenedJuniper’s best-in-class wired LAN, SD-WAN and security solutions with Mist’snext-generation wireless LAN (WLAN) platform.

Date Announced: November 8, 2018

Date Closed:April 4, 2019

CommScope acquired ARRIS for its strong leadership positions in customerpremise equipment (CPE), Network & Cloud (N&C), and enterprise networks(Rukus Wireless). The business combination enables end-to-end wired and

wireless communications infrastructure solutions giving COMM access to new andgrowing markets.

Date Announced: June 26, 2019

Date Closed:August 9, 2019

The acquisition of Aerohive adds critical cloud management and edge capabilitiesto Extreme's portfolio of end-to-end, edge to cloud networking solutions. Aerohivewas one of first companies to offer controller-less Wi-Fi and cloud networkmanagement, including cloud-managed Wi-Fi and network access control (NAC).

Source: Credit Suisse Research, Company data.

98

Application Delivery Controllers (ADC)FFIV Market Share Continues to Remain Elevated, At 49.1% of Market Revenues.

Networking



Global ADC Market Continues to Contract at Mid Single Digits vADCs Starting to Make up ~40% of Total Market Revenues

FFIV Continues to Dominate Market Share at 49% As of CY2Q20 FFIV Transitioning Business to Virtual Gradually, at 20% in F4Q20

50%

75%

100%

2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20

Glo

bal

AD

C M

ark

et R

evenue B

reakdow

n

pADC vADC

43.2%44.4%45.7%42.4%

44.4%44.7%46.9%

44.6%

49.4%49.8%50.1%

45.5%

50.1%49.1%

30.1%30.5%28.1%

30.3%27.8%27.0%

24.9%25.5%24.9%25.3%26.2%28.6%

25.2%26.5%

0%

10%

20%

30%

40%

50%

60%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Glo

bal

AD

C M

ark

et

Share

F5 A10 Other KEMP Radware Citrix

(6%)

(5%)

(4%)

(3%)

(2%)

(1%)

0%

1%

$0.0bn

$0.2bn

$0.4bn

$0.6bn

$0.8bn

$1.0bn

$1.2bn

$1.4bn

$1.6bn

$1.8bn

$2.0bn

2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E

y/y R

evenue G

row

th

Tota

l R

evenue A

DC

Mark

et

7% 6% 7% 8% 8% 8% 12% 14% 12% 16% 16% 20%

0%

25%

50%

75%

100%

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20

Software Systems Services

99

Credit Suisse 1H21 (Jan’21) CIO Survey ResultsSecurity Remains A Top Priority Among CIO Spending, A Positive Dynamic For FFIV.

Networking


Based on data from our January 2021 CIO Survey (75 Global CIOs at companies with revenue >$1bn), we found that the most

important priority for 2020 will be security software, a positive for FFIV given its growing focus on security. Towards the bottom of thepriority list are Campus Switches (3%) and Routers (4%), which is another data point highlighting our tempered outlook for networking equipmentcompanies in 2021, namely JNPR and ANET. Following 4Q20 results, we have found the CIO preferences as highly precise and have

found that security software importance is only increasing following the SolarWinds-FireEye-Cisco incidents.

Source: Credit Suisse CIO July 2021 Survey (See Report: January 2021 CIO Survey – Data Center Implications Remain Positive; Networking Impact Negative Overall).

Very favorable directionally for FFIV

given their multi-cloud solutions,

recent software acquisitions in multi-

cloud (NGINX) and security (Shape

Security).

3%

3%

4%

4%

4%

5%

6%

8%

9%

10%

10%

10%

10%

12%

13%

16%

16%

19%

25%

27%

32%

38%

44%

45%

53%

69%

N/A

N/A3%

5%

11%

0%

8%

4%

15%

12%

12%

21%

27%

N/A

7%

9%

13%

16%

29%

35%

29%

31%

43%

55%

47%

65%

4%

5%

10%

0%

3%

9%

10%

8%

3%

11%

10%

4%

11%

11%

15%

21%

23%

26%

4%

40%

46%

41%

55%

Campus Switches

Data Center Switches

Routers

Data Center Builds

Database

Observability

Servers

Consulting

HCM Applications

PCs

Edge Compute

Microsoft Office

DevOps

Wireless Connectivity

Infrastructure software

Storage

SD-WAN

IoT

CRM Applications

ERP Applications

AI/Machine Learning

Collaboration Software

Hybrid Cloud

BI/Analytics

Public Cloud

Security Software

January 2020 Survey July 2020 Survey January 2021 Survey

100

COVID-19 – Imagining The New NormalSecurity, Security, Security

Networking


Based on Gartner’s 3Q20 WW forecast, we expect the info security and risk mgmt. market to grow 8.6% y/y in 2021 from $131.9B in 2020 to$143.2B. We highlight the forecasts for individual segments below, noting that the highest growing segment is cloud security, in-line with theaccelerated adoption of the cloud and hybrid cloud model driven by the pandemic. In addition, the forecast reconciles with our Jan 2021 CIO survey,which emphasized that security continues to be a top priority. We believe security will continue to be an area of focus among CIOs in 2021.

Source: Gartner 3Q20 Security Forecast

Total Info Security & Risk Management Market by Revenues (Constant Currency U.S $) [Segment, CY19-24 CAGR%)

0

50,000

100,000

150,000

200,000

2018 2019 2020 2021 2022 2023 2024

Reve

nue (

Millio

ns

of

$, C

C)

Consumer Security Software, 3.8%

Security Services, 7.0%

Other Information Security Software, 6.4%

Network Security Equipment, 6.3%

Integrated Risk Management, 8.0%

Infrastructure Protection,12.5%

Identity Access Management, 10.9%

Data Security, 12.4%

Cloud Security, 33.1%

Application Security, 8.1%

https://plus.credit-suisse.com/s/V7pkHs4AF-ZSOp

101

COVID-19 – Imagining The New NormalCloud Gaming Growth Accelerated By Pandemic; Expect Moderation as Pandemic Lockdowns are Eventually Lifted, But Strength to Continue LT

Networking


As the popularity of PC gaming has grown, so too has interest in watching gameplay streamed online; even before COVID significantly accelerateddemand, average time watched on Twitch grew at a 36% CAGR over CY13-19. With widespread “stay at home” measures around much of theworld in CY20, average Twitch viewership has surged +55% in Apr-Sep vs. a Jan-Mar baseline. While we expect some moderation as things returnto “normal” over the next 12-24 months, we think growth in online streaming is here to stay. See our CS colleague Matt Cabral’s initiation of CorsairGaming (CRSR) here. According to Statista, the worldwide cloud gaming market is forecasted to grow to $4.8B by 2023, underscoring thestrength in cloud adoption and at-home entertainment. In our view, we believe there may be a moderation in cloud gaming demand as vaccines

rollout and pandemic lockdown measure are lifted; however, long-term we expect the strength in gaming infrastructure resources to continue.

Source: Twitchtracker Streaming Data, Statistia Market Data

Streaming Popularity Already Increasing Rapidly Pre-Pandemic

146

249

394441

545

781

917

0

100

200

300

400

500

600

700

800

900

1000

2013 2014 2015 2016 2017 2018 2019

Avg

. M

onth

ly T

ime W

atc

hed (

mm

hrs

)

0.17

0.58

4.8

0.0

1.0

2.0

3.0

4.0

5.0

2019 2020 2023M

ark

et

Valu

e in B

illio

ns

of

US

$

Cloud Gaming Market Forecast WW For 2019-2023

https://plus.credit-suisse.com/s/V7oYd04AF-ZSOp

102

Survey Data – Planning The New NormalCSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Hybrid Model


Hybrid Model Continues To Be Attractive to CIOs and IT Decision Makers. Based on survey data from >23,000 CIOs and IT decision makers(ITDMs) across 34 global markets from CSCO’s Accelerating Digital Agility Survey 2021, deployed in November 2020, in the future businessesplan to leverage a variety of solutions that will span on premise, private cloud, multi-cloud, and cloud-native. In addition, 86% of CIOs and ITDMsbelieve that offering a consistent operation model that goes across on-premises, private cloud, public cloud, and SaaS is important or very important.

Source: Accelerating Digital Agility Survey 2021

For motions to cloud adoption in future progress or planned for the future, CIOs and ITDMs…

Networking

83%

83%

83%

85%

86%

81% 84% 87%

are leveraging at least one private cloud solution

are leveraging at least one multi-cloud and on-

premises solution

are leveraging at least one cloud-first / cloud-native

solution

are leveraging at least one on premise solution

think offering a consistent operation model that goes

across on-premises, private cloud, public cloud, and

SaaS is important or very important

https://ebooks.cisco.com/story/accelerating-digital-agility-2021/page/1


103

Survey Data – Planning The New NormalCSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Several of Automation Use Cases


Businesses Cite Several Use Cases for Automation and Analytics. Following the pandemic, CIOs and ITDMs will increasingly look to createresilient and adaptive IT that incorporates analytics, insights, and automation. For survey respondents, the most popular reason to adopt automation

and analytics is to utilize business insights (76% of respondents). As devices per person continues to increase and online shopping remains popular,businesses will look to glean insights from the consumer and employee data to address operational issues and capitalize on new opportunities.


Creating resilient and adaptive IT hinges on analytics, insights, and automation. CIOs and ITDMs…

Networking

73%

74%

76%

69% 72% 75% 78%

will use insights to drive automation to free

up human time for more complex tasks

believe insights will be more important than

ever to deliver a seamless user experience

want to be able to utilize business insights

better


104

Survey Data – Planning The New NormalCSCO’s Accelerating Digital Agility Survey 2021 Emphasizes Overall Uncertainty


IT Leaders Are Unsure How The Next 12 Months Will Play Out. Twelve months after IT teams had to make a massive shift to remote work, ITleaders are still defining what the future of work looks like. More than 60% of CIOs and IT leaders are unsure about how work will look in 2021underscoring the overall uncertainty surrounding the work-from-home model and regarding how many businesses will adopt more flexible workingmodels going forward and what the flexibility could look like (# of allotted days allowed to work from home in a week, month, year etc.).


CIOs and ITDMs Agree / Strongly Agree That…

Networking

61%

73%

55%

60%

65%

70%

75%

I am still unsure what the future of work

looks like for my business in 2021

I will redefine what productivity looks like in

2021 compared to how we defined it pre-

pandemic


105

Networking Model FundamentalsMSI Continues To Be A Front Runner Comm. Equipment Peers in Key Metrics.

Networking



Operating Income (Non-GAAP) YoY Growth Operating Margins (Non-GAAP) – MSI Expansion Runway Solid

EPS YoY Growth Led by Our O/Ps – MSI, ANET, COMM Strong FCF/Share YoY Growth For Our O/Ps – MSI, ANET

15% 14%17%

32%

3%

16%

-40%

-15%

10%

35%

60%

85%

CSCO ANET JNPR FFIV COMM MSI

FC

F/S

hare

Gro

wth

2019 2020 2021 2022

6%

13%

9%

16% 17%

12%

-11%

-1%

9%

19%

29%

39%


EP

S G

row

th (

No

n-G

AA

P)

2019 2020 2021 2022

34%

37%

16%

34%

14%

28%

0%

10%

20%

30%

40%


Op

era

ting

Marg

ins (

No

n-G

AA

P)

2019 2020 2021 2022

3.7%

13%

3%

17%

8%10%

-19%

-9%

1%

11%

21%

31%


Op

era

ting

Inco

me

Gro

wth

(N

on

-

GA

AP

)

2019 2020 2021 2022

106

Data Center Switching & Networking Use CasesTop Six Use Cases for Continued Rapid Adoption of Data Center Switching.

Networking


Source: Arista Networks, Credit Suisse Research.

As robust Cloud Networking Fabrics (SDNs) continue scaling, the number of use cases grow as networking efficiencies are gained. In this slide, we highlight some

of the most common use cases across Cloud, Interconnection, Wide Area Networks, and Consumer connectivity from Arista Networks.

107

Data Center Switching & Network EvolutionUniversal Leaf-Spines Are the Architecture of Choice, Integrating Routing Capabilities Into the Switching OS… This Allows For Lower TCO and Greater Control Of Network Capabilities. Universal Leaf-Spine is the Cloud Network Fabric of Choice.

Networking


Source: Arista Networks, Credit Suisse Research.

108

Comparing Software Defined Networking (SDN)XXXXXXXXXXXXXXXXX

Networking


Company SDN Description Comments

Application-centric infrastructure (ACI) is a programmable

Ethernet fabric that supports a

centralized policy-based model versus a traditional device-

centric command line interface (CLI)-based approach.

Pros: Focuses on the data center components and leverages high-end equipment; also the largest installed base vendor, leading to highest number of enterprise personnel.

Cons: High-priced solution; platform provides limited investment protection for the existing installed base of Nexus and Catalyst equipment, or for UCS server architectures; lacks features such as FCoE support and external data center interconnect capabilities that many organizations have adopted.

Extensible operating system (EOS) is a scalable network operating system (OS) that

offers high availability, streamlines maintenance

processes, and enhances network security.

Pros: Works extremely well with industry standard approaches; is flexible allowing customers freedom of choice without lock-in to any one architecture; tends to be more cost-efficient than other vendors.

Cons: Although EOS is a very flexible and sound network foundation, organizations looking for a dynamic orchestration systems will need to integrate it into an external orchestration system.

Juniper Contrail Networking is a simple, open, and agile cloud

network automation product that implements an SDN

architecture.

Pros: Strong track record in supporting demanding, mid- to large-scale data center environments in both enterprise and service provider environments; aggressively prices its solutions; offers an open and

interoperable architecture.

Cons: Still primarily network- and security-focused, limiting its market to those looking for an independent network layer.

Software-defined networking (SDN) is an approach to using open protocols, such as OpenFlow, to apply globally aware software control at the

edges of the network to access network switches and routers that typically would use closed and proprietary firmware. SDN offers numerousbenefits including on-demand provisioning, automated load balancing, streamlined physical infrastructure, and the ability to scale network resources in lockstep with

application and data needs. Coupled with the ongoing virtualization of servers and storage, SDN ushers in no less than the completely virtualized data center, in

which end-to-end compute environments will be suddenly deployed and decommissioned on a whim.

Source: Company data, Gartner, Tech Target, Credit Suisse Research.

109

SDN Versus NFVComparing and Contrasting the Virtualization of Network Software Technology

Networking


Source: Credit Suisse Networking Survey, August 2013

Vendor-independence

Rapid service innovation

Improved operational efficiency

Standardized, open interfaces

Dynamic chaining of network

functions

Centralized orchestration

management

Consistent policy framework

Control/data plane

separation

Focus on network

function connectivity

(logical topologies)

No predominantly

topology focused

Reduced power usage

(elastic scalability)

Function/location

separation

SDN

NFV

Network function virtualization (NFV) and software-defined networks (SDN) areclosely related, complementary technologies that address different elements of a software-

driven solution. Both are driven by the desire to transform today’s networking infrastructureinto more cost-effective, flexible, robust solutions through:

– SDN can be thought of as a series of network objects (e.g., switches, routers,and firewalls) that can be deployed in a highly automated manner

– NFV can be thought of as the process of moving services, such as firewalls andload balancing, away from dedicated hardware into a virtualized environment

Timeline? For SDN, a trickier decision for vendors – a greenfield opportunity, as no

enterprise-wide standard, many unknowns. NFV is certainly coming and is carrier driven.

SDN NFV

Focus Data Center Service Providers

StrategySplit control and data forwarding

planes

Replace network devices with

software

Protocol OpenFlowNot determined yet, does support

OpenFlow

Applications runOn industry-standard servers or

switchesOn industry-standard servers

Customer BenefitDrives down complexity and cost,

increases agility

Drives down complexity and cost,

increases agility

Prime Initiative SupportersEnterprise networking software

and hardware vendorsTelecom service providers

Business Initiator Corporate IT Service Provider

Both Provide New Approaches to Network Management

SDN

NFVOpen

Innovation

Creates

competitive supply

of innovative

applications and

third parties

Creates network

abstraction to enable

faster innovation

Reduces capex, opex,

space, and power

consumption

Complementary, Open, and Software-Driven

SDN and NFV Synergies Description

110

SDN and NFV: Why do they matter?IT Overhead Costs Require IT Spenders to Watch Hardware/Architecture Costs Closely and Virtualization/SDN/NFV Alleviate Constraints and Allow Networks to Scale-out Efficiently.

Networking



$0

$20

$40

$60

$80

$100

$120

$140

$160

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Admin/Maintenance

Server Hardware

Power & Cooling

Less Capex

15%

Applications

and APIs

21%

Centralized

Point of Control

19%

More

Automation

13%

Less Opex

6%

Faster

provisioning

24%

Other

2%

Faster Provisioning & Applications Drive SDNAdministration Overhead Can Be Onerous

“We should be able to treat a switch like a server in the rack….We should be able to load a Linux-based operating system, and that

server just happens to have a lot of I/O ports on it.“

— Frank Frankovsky Vice President, Hardware Design and Supply Chain Operations at Facebook

“Because networking gear is complex and, despite them all implementing the same RFCs, equipment from different vendors (and

sometimes the same vendor) still interoperates poorly. It’s very hard to deliver reliable networks at controllable administration costs

from multiple vendors freely mixing and matching. The customer is locked in, the vendors know it, and the network equipment prices

reflect that realization.”

— James Hamilton of Amazon Web Services

Company Ratings & Target Prices


1,273 1,770

2,336

2,969

3,717

4,586

5,427

6,472

7,592

8,876

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E

$19 Target Price, ~31% Upside Potential: RADI is valued on the avgof two methods arriving to a $19 TP: (1) EV/GCF multiple of 25x our

2022E GCF of $104.5M, computing $31/share; and (2) EV/EBITDA

multiple of 25x our 2022E adj. EBITDA of $31.6M, computing $7/share.

Risks: 1) high overall leverage, 2) volatile FX rates, 3) geopoliticalinstability, 4) increased site decommissions, and 5) increased competition.

112

Radius Global Infrastructure (RADI)TOP PICK: OUTPERFORM | Target Price: $19 | Mkt. Cap. $887.5M

Towers


• RADI’s highly effective, globally distributed ~300 person business

development team leverages its proprietary database of land

owners/interests to address a vast TAM opportunity.

• Macro environment should bolster RADI’s acquisition pipeline as

individual land owners increasingly look to sell their lands amid

challenging economic dynamics.

• RADI has $215M of available cash, ample access to credit, with

sufficient leverage capacity for high levels of acquisition activity.

• 5G should further bolster RADI’s business opportunity as connectivity

density rises, increasing the number of TAM site and lease interests.

Key Points

Valuation

Key Charts

RADI Mini P&L

Rev. to Grow With Rapid Site Expansion Through 2023E

Source: Company Data, Factset, CS Research.

Initiation: Radiating Growth in a 5G World

4Q20 Results – Metrics Ahead of Estimates; Set for Solid 2021

NDR – Momentum Building with Strong Execution

(in $ millions) FY19 FY20 FY21E FY22E

Total Revenue 55.7 69.8 86.8 105.4

Total Revenue Y/Y Growth (%) 20.0% 25.2% 24.4% 21.4%

Gross Profit 55.4 69.1 86.1 104.5

Gross Margin 99.4% 99.1% 99.2% 99.2%

Adjusted EBITDA 20.5 18.5 21.0 31.6

Adjusted EBITDA Margin 36.8% 26.6% 24.2% 30.0%

EPS 0.00 -3.12 -1.30 -1.41

EPS Y/Y Growth - - - -

https://plus.credit-suisse.com/s/V7pYzO4AF-e

https://plus.credit-suisse.com/s/V7qvbw4AF-e

https://plus.credit-suisse.com/s/V7qyNW4AF-e

0%

5%

10%

15%

20%

25%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2017 2018 2019 2020 2021E 2022E

Y/Y

Gro

wth

To

tal R

eve

nu

e (

$b

illio

ns)

EMEA Asia Americas Y/Y Growth

(in $ millions) FY19 FY20E FY21E FY22E

Co-location Revenue 4,022.2 4,259.0 4,626.0 5,129.3

Interconnection Revenue 893.6 1,023.3 1,155.8 1,275.0

Managed Infrastructure Revenue 292.6 337.3 383.4 427.9

Rental & Other 29.8 38.4 36.9 36.9

Total Recurring Revenue 5,238.2 5,658.0 6,202.0 6,869.1

Non-Recurring Revenue 324.0 340.5 346.4 391.3

Total Revenues 5,562.1 5,998.5 6,548.4 7,260.4


Adjusted EBITDA 2,687.7 2,852.9 3,113.5 3,460.5


FFO 1,314.6 1,300.6 1,694.0 1,891.2

FFO per share (diluted) 15.53 14.75 18.75 20.47

Adjusted FFO 1,931.1 2,189.1 2,450.7 2,792.9

Adjusted FFO per share (diluted) 22.85 24.79 27.13 30.23

AFFO Y/Y Growth 10.3% 8.5% 9.4% 11.4%

Review: Global Interconnection Leader Warrants Valuation

113

Equinix (EQIX)OUTPERFORM | Target Price: $942 | Mkt. Cap. $60.5B

Data Centers


• EQIX is the market interconnection leader, with highly recurring

revenues and margin expansion potential long-term. They are the most

globally distributed data center with a world class brand.

• Growing SaaS company/customer on-ramps, and accelerating

interconnection growth are drivers of EQIX’s portfolio through 2021.

• Lower average interest expense from refinanced investment grade debt

will support higher AFFOS growth long-term.

• EQIX is executing well, adding to its network dense asset dominance

through M&A globally (e.g. Canada, India) and JV’s.

• We believe EQIX is best positioned as a global interconnection leader

given its business moat, global distribution, and strategically executed

acquisitions to expand into new markets.

Key Points

Valuation

Key Charts

EQIX Mini P&L

Revenue Growth to Rebound in 2021 Following FX Volatility

$942 Target Price, ~38% Upside: Our target price of $942 is based on30x our FY22E AFFOS of $30.23 per share and a DCF valuation

assuming a terminal growth of 2.1% and WACC of 5.3%.

Risks: Technological disruption, market competition, rising interest rates,and REIT qualification loss.


Link Initiation: Pioneering the Interconnection of Things

4Q20 Results ― Global Momentum, Position Strengthening

https://plus.credit-suisse.com/s/V7miDM4AF-e

https://plus.credit-suisse.com/s/V6S3tg2AF-e

https://plus.credit-suisse.com/s/V7pDbW4AF-e

5.3

% 5.7

%

4.2

%

3.8

%

4.8

%

3.7

%

5.2

%

4.0

%

2.9

%

3.9

%

1.9

% 2.6

%

5.5

%

3.5

%

3.4

%

5.6

%

2.8

% 3.2

%

3.0

% 3.7

%

3.2

%

2.6

%

-2.2

%

-0.8

%

0.4

%

1.4

%

-1.5

%

2.9

%

1.0

%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

1Q

15

2Q

15

3Q

15

4Q

15

20

15

1Q

16

2Q

16

3Q

16

4Q

16

20

16

1Q

17

2Q

17

3Q

17

4Q

17

20

17

1Q

18

2Q

18

3Q

18

4Q

18

20

18

1Q

19

2Q

19

3Q

19

4Q

19

20

19

1Q

20

2Q

20

3Q

20

4Q

20

Cash renewal rate Churn


Rental Revenue 308.6 329.3 349.9 383.3

Power Revenue 165.4 169.7 182.0 202.5

Interconnection Revenue 75.8 84.1 91.9 104.4

Tenant Reimbursement & other 11.1 13.3 14.2 15.5

Total Data Center Revenue 560.9 596.4 638.0 705.7

Office, light-industrial and other revenue 11.8 10.4 11.1 11.1

Total Revenue 572.7 606.8 649.1 716.8

y/y growth 5.2% 6.0% 7.0% 10.4%

Adjusted EBITDA 308.1 324.5 343.8 386.8

EBITDA Margin 53.8% 53.5% 53.0% 54.0%

FFO per share / OP unit 5.10 5.31 5.51 6.27

AFFO per share / OP unit 5.13 5.16 5.29 6.03

AFFO Y/Y Growth 5.9% 0.6% 2.6% 14.0%

4Q20 Results – Initial Guidance Leaves Room for Upside

114

CoreSite Realty (COR)OUTPERFORM | Target Price: $156 | Mkt. Cap. $5.3B

Data Centers


• COR has solid execution across businesses, especially in

interconnection, often being compared to EQIX.

• COR is set up for stronger growth in 2021 due to robust enterprise

demand momentum, given the company’s retail colocation focus.

• COR should see improved churn in 2021, now that Uber’s move out is

mostly behind it.

• 2021 renewal rates should improve off of easy comps, better churn,

and broad end market supply/demand balance.

• COR continues to target development yields that exceed MTDC peers,

and we view its ROIC leadership should continue in 2021.

Key Points

Valuation

Key Charts

COR Mini P&L

Expect Renewal Rates to Improve in 2021 with Better Churn

$156 Target Price, ~28% Upside: Our target price of $156 is based on23x our FY22E AFFOS of $6.03 per share and a DCF valuation assuming

a terminal growth of 2.5% and WACC of 5.1%.



Link Initiation: Fairly Valued, Upside Priced In

Upgrade to O/P: Positioned Well for Hybrid Cloud Demand

https://plus.credit-suisse.com/s/V7p9ef4AF-e

https://plus.credit-suisse.com/r/V6SzHI2AF-e

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

2016 2017 2018 2019 2020 2021E 2022E

Cap

ex in $

millio

ns

Revenu

es in $

millio

ns

Revenue Capex


Rental 2,266.1 2,758.7 3,066.2 3,138.7

Tenant Reinbursements - Utilities 431.2 565.1 611.6 626.0

Tenant Reimbursements - Other 235.8 235.3 246.2 329.6

Interconnection & Other 263.3 327.4 372.4 419.2

Construction Management (Fee income) 11.7 15.2 16.5 16.5

Other 1.2 1.9 1.0 1.0

Total Revenue 3,209.2 3,903.6 4,313.9 4,530.9

y/y growth 5.3% 21.6% 10.5% 5.0%

Adjusted EBITDA 1,886.7 2,187.0 2,320.3 2,493.5

EBITDA Margin 58.8% 56.0% 53.8% 55.0%

FFO per share / OP unit $6.65 $6.22 $6.41 $6.93

AFFO per share / OP unit $5.93 $5.83 $5.90 $6.28

AFFO Y/Y Growth (2.2%) (1.7%) 1.4% 6.4%

Review: Network Dense Assets Should Boost Yields

115

Digital Realty (DLR)OUTPERFORM | Target Price: $167 | Mkt. Cap. $40.3B

Data Centers


• DLR is in strong position as the leading hyperscale MTDC, in an

environment with robust hyperscale demand and solid pricing.

• Following the acquisition of InterXion, DLR now has a solid portfolio of

both hyperscale and enterprise/hybrid assets, which we believe is

important given the aforementioned strong enterprise demand.

• InterXion also strengthened DLR in Europe, which is expected to see

strong growth through 2021, mainly from hyperscale, whom DLR

already has strong relationships with.

• DLR’s development yields to climb to the 12%+ range given improving

renewal spreads and increased cross-selling.

Key Points

Valuation

Key Charts

DLR Mini P&L

Hyperscale Growth Should Power DLR Through 2022E

$167 Target Price, ~17% Upside: Our target price of $167 is based on26.5x our 2022E AFFO/share estimate of $6.28.



Reinstatement: INXN Strengthens Position and Boosts ROIC

4Q20 Results ― InterX ion Value Taking Shape

https://plus.credit-suisse.com/s/V7mtAr4AF-e

https://plus.credit-suisse.com/s/V7mbW04AF-Z3xM

https://plus.credit-suisse.com/s/V7qPJQ4AF-e

0%

5%

10%

15%

20%

25%

30%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2015A 2016A 2017A 2018A 2019A 2020A 2021E 2022E 2023E

Y/Y

Revenu

e G

row

th (

%)

Revenu

es (

in $

tho

usand

s)

Revenues Y/Y Growth (%)


Colocation 369.8 413.7 449.2 514.0

Connectivity 80.4 92.0 94.4 109.9

Professional services & Other 6.5 5.8 5.7 7.6

Total Revenue 456.7 511.5 549.3 631.6


Income from continuing operations 75.9 203.4 213.5 271.5

Margin 16.6% 39.8% 38.9% 43.0%

Adjusted EBITDA 230.3 268.1 285.6 328.9


AFFO 198.6 218.1 238.5 275.4

AFFO Per Share 0.81 0.91 0.99 1.13

AFFOS Y/Y Growth 18.7% 11.6% 9.0% 14.5%

4Q20 Results ― Customer Migration Weighs Near-Term

116

Switch (SWCH)OUTPERFORM | Target Price: $19 | Mkt. Cap. $4.2B

Data Centers


• Over the long-term, SWCH is growing ahead of the data center market

rate. It offers immense amounts of power for customer workloads at low

power rates, and through their fiber routes, the company passes

through tax incentives on data center demand.

• SWCH’s S3 sales team is driving better growth outside of Las Vegas,

with larger average deal sizes since the team has started.

• In 4Q20, SWCH signed incremental annualized recurring revenue of

$36M, its highest quarterly figure ever.

• It trades at a significant discount to MTDC peers on a multiple basis.

• Growth is hindered this year by outsized churn impact, but in our view,

that still does not counterbalance the distinct discount on SWCH.

Key Points

Valuation

Key Charts

SWCH Mini P&L

Double Digit Revenue Growth to Return in 2022E, Post-Churn

$19 Target Price, ~10% Upside: Our target price is based on ourSWCH DCF model, with a WACC of 6.0% (reflecting a 22% debt-to-

capital ratio) and a terminal growth of 2.5%.

Risks: Revenue concentration, interest rate risk, data center pricingvolatility, and intellectual property protection ability.


Link Initiation: More Data Center Power For Less

NDR ― Tone Confident, Valuation Attractive

https://plus.credit-suisse.com/s/V7qYTC4AF-e

https://plus.credit-suisse.com/r/V7aIa32AF-e

https://plus.credit-suisse.com/s/V7qe3D4AF-e

40%

42%

44%

46%

48%

50%

52%

54%

56%

58%

-

50

100

150

200

250

300

350

400

450

2017A 2018A 2019A 2020A 2021E 2022E 2023E

BIT

DA

Marg

in (

%)

EB

ITD

A (

in $

mil)


Rental 410.06 465.56 523.98 577.88

Recoveries from customers 55.07 54.30 63.01 69.21

Other 15.70 19.51 21.96 24.22

Total revenues 480.82 539.37 608.95 671.30

y/y growth 6.7% 12.2% 12.9% 10.2%

Adjusted EBITDA 250.38 298.49 336.11 372.58

Adjusted EBITDA Margin (%) 52.1% 55.3% 55.2% 55.5%

Operating FFO 165.73 199.04 231.09 264.66

Operating FFO per share (diluted) 2.63 2.84 3.01 3.25

Operating AFFO 154.80 169.51 207.68 237.22

Operating AFFO per share (diluted) 2.46 2.42 2.70 2.91

AFFO Y/Y Growth -1.6% -1.5% 11.8% 7.7%

DCs Post-4Q20 Results: Takeaways

117

QTS Realty (QTS)NEUTRAL | Target Price: $71 | Mkt. Cap. $4.6B

Data Centers


• QTS’ recent performance has been strong, indexed to cloud growth and

enterprise hybrid growth with solid assets in Georgia and expansions

into Arizona, but it continues to dilute equity more heavily than peers.

• Record lease signings highlight the consistency of the company’s new

core strategy, and a record backlog provides good visibility into 2021

growth. Its software defined platform has spurred recent growth.

• Broad sector strength can cause QTS to rise with the tide, and low

churn shows positive potential for the future.

• Federal segment may slow in 2021, but remains a strong growth driver

in the long-term, as the U.S. government aims to modernize its

infrastructure in the wake of COVID.

Key Points

Valuation

Key Charts

QTS Mini P&L

EBITDA Margin Expansion to Pause in 2021, Resume in 2022

$71 Target Price, ~11% Upside: Our target price of $71 is based on aP/AFFOS multiple of 24.5x our 2022 AFFO per share of $2.91.



Link Initiation: Secular Growth Is Not Enough

4Q20 Results ― Another Solid Quarter, With a Solid Outlook

https://plus.credit-suisse.com/s/V7qcvk4AF-e

https://plus.credit-suisse.com/r/V6SzHc2AF-e

https://plus.credit-suisse.com/s/V7qK6A4AF-e

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

-

200

400

600

800

1,000

1,200

1,400

2016A 2017A 2018A 2019A 2020A 2021E 2022E

Y/Y

Gro

wth

(%

)

To

tal R

eve

nu

e (

$m

illio

ns)


Base Revenue 842.5 872.1 934.9 1,000.5

Meter Power Reimbursement Revenue 138.8 161.4 190.1 203.4

Total Revenue 981.3 1,033.5 1,125.0 1,203.9


Net Operating Income (CONE defined) 597.9 621.9 687.2 732.8

NOI Margin 60.9% 60.2% 61.1% 60.9%

Adjusted EBITDA 512.2 537.2 583.1 624.9


FFO 409.0 459.4 504.3 549.1

FFO Per Share 3.63 3.90 3.96 4.10

AFFO 394.3 448.4 487.7 520.6

AFFO Per Share 3.50 3.80 3.83 3.88

AFFO Y/Y Growth 5.1% 8.5% 0.7% 1.5%

DCs Post-4Q20 Results: Takeaways

118

CyrusOne (CONE)NEUTRAL | Target Price: $82 | Mkt. Cap. $8.4B

Data Centers


• Adjusted EBITDA margin compressed again in 2020, and we expect

slight degradation in 2021, following heavy buildouts in Europe.

• Hyperscale demand accelerated due to COVID-19, especially in

Europe, which was already seeing strong demand. Strong demand

should continue through 2021.

• Bookings results improved following soft leasing in new mgmt.’s first full

quarter, investors will need improvement in direction in 2021.

• CONE is targeting lower stabilized yields in 2021 to win market share,

we are cautious on the outcome of this strategy. However, we concede

that the current demand/supply may support the stock.

Key Points

Valuation

Key Charts

CONE Mini P&L

Revenue Growth Behind the Market Rate Through 2022

$82 Target Price, ~18% Upside: Our target price of $82 is based on~21x our 2022E AFFO/share estimate of $3.88.



Link Initiation: Driving the Colo. Boom with the Fortune 1,000

4Q20 Results ― Strong Bookings, But Weak 2021 Outlook

https://plus.credit-suisse.com/s/V7qcvk4AF-e

https://plus.credit-suisse.com/r/V6SzJ72AF-e

https://plus.credit-suisse.com/s/V7qLPS4AF-e

23.7x

19.0x

13.9x

29.5x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x


P/FY

2 A

FFO

P/ FY2 AFFO Avg Min Max


Property Revenue 7,465 7,954 8,597 8,984

Services Revenue 115 88 96 104

Total Revenue 7,580 8,042 8,693 9,088


Gross Profit (NOI) 5,364 5,816 6,278 6,624

Gross Margin 70.8% 72.3% 72.2% 72.9%

Adjusted EBITDA 4,745 5,156 5,651 5,976


AFFO 3,521 3,788 4,114 4,316

AFFO Per Share 7.90 8.49 9.20 9.31

AFFOS Y/Y Growth -1.2% 7.4% 8.3% 1.2%

$296 Target Price, ~21% Upside Potential: AMT is valued based onthe average of two methods arriving to a $296 TP, implying upside of

36%: (1) P/AFFOS multiple of 30x our 2022E AFFOS of $9.31; and (2)

DCF valuation assuming a WACC of 5.6% and terminal growth rate of

2.5% (below standard portfolio lease escalators of ~3%).

Risks: 1) slowdown in overall telecom spending, 2) shift away from macrotower infrastructure, 3) customer concentration, 4) interest rate risk, and

5) REIT qualification risk.

119

American Tower (AMT)OUTPERFORM | Target Price: $296 | Mkt. Cap. $106.7B

Towers


• AMT’s global macro towers are set to benefit from multiple telecom

standard upgrades within high growth developing markets.

• AMT’s avg macro tower tenancy is expected to increase over time as

the company works to lease up its recently acquired towers.

• Net leverage levels below peers with scope to increase if M&A

opportunities present themselves. Seen in Telxius deal.

• Opportunity for expansion into new digital infrastructure assets. AMT’s

lower leverage benefits it, enabling greater strategic agility.

• Robust end market drivers make us bullish on the tower industry and

AMT, however churn headwinds are likely a drag on our 2021

estimates. That said, we maintain our Outperform rating given the

constructive long-term view of the company.

Key Points

Valuation

Key Charts

AMT Mini P&L

Trading Off Peak Valuation With Full 5G Opportunity Nearing


The Next Digital Infra. Frontier: Consolidating European Towers

Tower REITs: Takeaways from VZ, TMUS, and T Analyst Days

https://plus.credit-suisse.com/s/V7pvzG4AF-e

https://plus.credit-suisse.com/s/V7qi5N4AF-e


Site Leasing Revenue 1,861 1,957 2,043 2,118

Site Development Revenue 154 129 152 172

Total Revenue 2,015 2,086 2,195 2,290


Gross Profit (NOI) 1,522 1,610 1,695 1,764

Gross Margin 75.5% 77.2% 77.2% 77.0%

Adjusted EBITDA 1,409 1,494 1,576 1,657


AFFO 972 1,070 1,137 1,201

AFFO Per Share 8.48 9.47 10.18 10.73

AFFOS Y/Y Growth 11.3% 11.7% 7.5% 5.4%

71.8%

65.0%

58.3%

55.2%53.8% 53.0%

52.0% 51.8%

46.9%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

SBAC AMT CCI QTS DLR COR SWCH CONE EQIX

Ad

j. E

BIT

DA

Marg

in

$277 Target Price, ~3% Downside Potential: SBAC is valued on theavg of two methods arriving to a $277 TP: (1) P/AFFOS multiple of 23x

our 2022E AFFOS of $10.73; & (2) DCF valuation assuming a WACC of

5.4% and terminal growth rate of 2.1% (below portfolio lease escalators).

Risks: 1) slowdown in overall telecom spending, 2) shift away from macrotower infrastructure, 3) customer concentration, 4) interest rate risk, and

5) REIT qualification risk.

120

SBA Communications (SBAC)NEUTRAL | Target Price: $277 | Mkt. Cap. $30.7B

Towers


• SBAC has reported elevated macro tower amendment activity, which

we view should be a driver going forward due to 5G.

• Potential to expand into broader digital infrastructure assets, such as

data centers, following an exploration period. Management has already

begun the diversification process.

• However, compared to peers it does have the same flexibility given

elevated levels of leverage.

• 2021E, 2022E is likely to be subdued due to elevated levels of churn

associated with the Sprint, given overlap of sites with T-Mobile.

• Valuation has troughed, in our view, as TowerCos were hit by rising

rates early in 2021.

Key Points

Valuation

Key Charts

SBAC Mini P&L

’21 EBITDA Margin Leads All Communications Infra. Peers







Site Rental Revenue 5,093 5,320 5,555 5,858

Network Services & Other 670 520 620 660

Total Revenue 5,763 5,840 6,175 6,518


Gross Profit (NOI) 3,777 3,869 4,132 4,416

Margin 65.5% 66.3% 66.9% 67.7%

Adjusted EBITDA 3,299 3,707 3,602 3,783


AFFO 2,372 2,878 2,911 3,051

AFFO Per Share 5.67 6.76 6.71 6.96

AFFOS Y/Y Growth 4.0% 19.2% -0.7% 3.7%

3.5%

4.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%


Div

idend

Yie

ld

Yield Avg Min Max

$155 Target Price, ~12% Downside Potential: CCI is valued on theavg. of two methods arriving to a $155 TP: (1) P/AFFOS multiple of 25x

(in-line with CCI’s current level) our 2022E AFFOS of $6.96; and (2) DCF

valuation assuming a WACC of 5.6% and terminal growth rate of 2.5%

(aligned with AMT/SBAC).

Risks: 1) slowdown in overall telecom spending, 2) shift away from smallcell infrastructure, 3) customer concentration, 4) interest rate risk, and 5)

REIT qualification risk.

121

Crown Castle (CCI)NEUTRAL | Target Price: $155 | Mkt. Cap. $75.2B

Towers


• Deployment constraints in small cells are likely to continue as municipal

permitting for new builds has not allowed for node count to scale as

mgmt. had previously projected.

• As CCI builds further outside of major metros, the likelihood of achieving

tenancy above the ~2.3x industry average is reduced over time, in our

view.

• Capital return already optimized with AFFO payout ratio at ~73%.

• DISH’s long-term leasing agreement with CCI can be a key driver if

DISH ends up leasing close to 20,000 towers from CCI. We view “up

to 20,000” likely does not ultimately signal 20,000 sites.

• That said, CCI, would be the beneficiary of a major edge or micro data

center overhaul in the U.S. given their fiber rich assets.

Key Points

Valuation

Key Charts

CCI Mini P&L

Dividend Yield Leading the TowerCo Group






28%

29%

30%

31%

32%

33%

34%

35%

36%

37%

38%

39%

40%

$0

$10

$20

$30

$40

$50

$60

$70

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

2Q

20

3Q

20

4Q

20

1Q

21

E

2Q

21

E

3Q

21

E

4Q

21

E

1Q

22

E

2Q

22

E

3Q

22

E

4Q

22

E

Ad

juste

d E

BIT

DA

Marg

in

Ad

juste

d E

BIT

DA

(M

illio

ns $

)

Adjusted EBITDA Adjusted EBITDA Margin

($ millions) FY19 FY20 FY21E FY22E

On-Net 396.75 419.46 444.18 477.15

Off-Net 148.93 148.13 146.23 148.86

Non-Core 0.48 0.52 0.48 0.51

Total revenues 546.16 568.11 590.89 626.52

y/y growth 5.0% 4.0% 4.0% 6.0%

Gross Profit 327.35 350.17 365.41 390.57

Gross Margin 59.9% 61.6% 61.8% 62.3%

Adjusted EBITDA 198.96 214.35 223.73 241.60

Adj EBITDA Margin 36.4% 37.7% 37.9% 38.6%

Net income 37.52 6.22 38.52 45.96

Sharecount 45.93 46.20 46.74 46.89

EPS 0.82 0.13 0.82 0.98

y/y growth 30.5% -83.5% 512.5% 18.9%

4Q20 Results ― Below Expectations on Corporate

122

Cogent Communications (CCOI)NEUTRAL | Target Price: $70 | Mkt. Cap. $3.3B

Fiber


• CCOI is growing faster than the competitive and challenged Internet

Service Provider industry, despite Corporate customer challenges.

• NetCentric has returned to growth and should sustain strength given

growing OTT and gaming use cases.

• CCOI has raised its dividend 34 consecutive quarters, and we project

+14.2% y/y growth in dividend per share in 2021.

• Office space may weaken over the coming year, with vacancy rates

rising, putting further pressure on Corporate Customer growth.

• Decline in pricing per megabit has accelerated recently, putting further

pressure on CCOI.

Key Points

Valuation

Key Charts

CCOI Mini P&L

EBITDA Margins to Maintain Generally Upward Trajectory

$70 Target Price, ~2% Upside: Our target price of $70 is based on adiv. yield basis, using an assumed 2021 yield of 4.5%, and forecast

+14.2% y/y dividend per share growth in FY21.

Risks: Key executive, technological disruption, FX headwinds, marketcompetition, and net neutrality laws.


Link Initiation: High Dividend Growth in a Challenged Market

NDR ― Corporate Growth at a Trough Reiterated by Mgmt.

https://plus.credit-suisse.com/s/V7qTjk4AF-e

https://plus.credit-suisse.com/s/V7hgMJ4AN-Ytkb

https://plus.credit-suisse.com/s/V7qaAH4AF-e

123

Motorola Solutions (MSI)TOP PICK: OUTPERFORM | Target Price: $198 | Mkt. Cap. $26B

Networking


• Motorola Solutions possesses the only true end-to-end solution in the

first responders and public safety market, launching “Command Center”

for full automation, big data, and auditable system install, materially

enhancing functionality for customers.

• Revenues are also transitioning to a recurring revenue model, allowing

for a potential multiple re-rating as the shift continues.

• Expansive revenue synergy opportunities exist from the Avigilon

acquisition, particularly within the government and first responder

customer segments where MSI is under-indexed.

• Recent acquisitions continue to augment and simplify communications

in the Command Center software suite with new, convenient modes of

communication (i.e texting capabilities)

Key Points

Valuation

Key Exhibits

MSI Mini P&L

Since 2011, MSI Has Returned over $14bn to Shareholders, and

Strong Capital Returns Are Expected to Continue$198 Target Price: Our target price is based on 20.5x our 2022E EPS of$9.66.

Risks: Execution of strategy, technological disruption, timing of refreshcycles, dependency on U.S. government contracts.


Link Initiation: Leading End-to-End Public Safety Provider

Link Sector Primer: Cloud Networking Fabrics to Proliferate

Link: 4Q20/2020 Results Beat1,182

2,708

1,986

2,864

3,452

1,123

789

469

694

1,048 1,106 1,157

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

To

tal C

ap

ital R

etu

rn (

$m

illio

ns)

Buybacks Dividends


Products 5,329.0 4,634.0 4,877.7 5,059.5

Services 2,559.0 2,780.0 3,110.2 3,330.3

Total revenues 7,888.0 7,414.0 7,987.9 8,389.8

y/y growth 7.4% (6.0%) 7.7% 5.0%

Gross Profit 3,962.6 3,660.0 4,069.3 4,320.8

Gross Margin 50.2% 49.4% 50.9% 51.5%

Operating Expense 1,987.6 1,824.0 1,904.1 1,945.6

Operating Profit 1,975.0 1,836.0 2,165.2 2,375.1

Operating Margin 25.0% 24.8% 27.1% 28.3%

Net income 1,399.0 1,339.0 1,504.1 1,681.1

Sharecount 175.7 174.1 174.4 174.0

EPS 7.96 7.69 8.62 9.66

y/y growth 11.4% (3.4%) 12.1% 12.0%

https://plus.credit-suisse.com/r/V7cRyN2AF-e

https://plus.credit-suisse.com/r/V7cRzs2AF-e

https://plus.credit-suisse.com/s/V7p9fK4AF-ZSOp

124

Arista Networks (ANET)OUTPERFORM | Target Price: $359 | Mkt. Cap. $15B

Networking


• DC capacity influx is expected to be significant in 2021, driven by U.S.

hyperscale capex spend acceleration to 16% y/y and multi-tenant data

center capacity availability and commencement timing

• Campus switching and WLAN product revenue ramp provides a

compelling opportunity, augmented by Awake Security and Big Switch

acquisitions

• Cloud titans and SPs will continue to look to ANET for data center

switching long-term, in our view, based on the company’s proprietary

EOS software, quick adoption and integration of leading edge

components (merchant silicon use, latest DC switching chip), and

network equipment power efficiency.

• ANET should benefit from an elongated 100G DC switching cycle

Key Points

Valuation

Key Exhibits

ANET Mini P&L

CS Model Relatively in-line Consensus View$359 Target Price: Our $351 target price is based on the average of asales multiple: $339 from 8.0x our FY22 Sales estimate of $3,009M and

$378 from our DCF computing (WACC 7.2%, TVGR 2.5%).

Risks: Decreased long-term campus demand, delayed product refresh

cycle timing for 400G, and weakening cloud capex trends.


Link: 3Q20 Earnings – Beat & Raise

Link Initiation: Levered to Surging Hyperscale Capex

Link: Upgrading to Outperform

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E

Tota

l Re

ven

ue

($

mill

ion

s)

CS Revenue Cons. Revenue


Product 2,021.2 1,830.8 2,065.0 2,303.4

Services 389.6 486.7 587.9 705.5

Total revenues 2,410.7 2,317.5 2,652.9 3,008.9

y/y growth 12.1% (3.9%) 14.5% 13.4%

Gross Profit 1,559.5 1,505.6 1,716.0 1,946.1

Gross Margin 64.7% 65.0% 64.7% 64.7%

Operating Expense 641.9 651.4 728.2 833.3

Operating Profit 919.0 854.2 987.8 1,112.7


Net income 786.8 718.4 780.9 882.9

Sharecount 80.9 79.4 79.6 79.7

EPS 9.73 9.04 9.81 11.08

y/y growth 22.3% (7.0%) 8.4% 13.0%

https://plus.credit-suisse.com/s/V7orXw4AF-ZSOp


125

CommScope (COMM)OUTPERFORM | Target Price: $22 | Mkt. Cap. $2.0B

Networking


• COMM’s management has a history of achieving cost synergies and

reducing leverage ahead of schedule, a major positive in the minds of

investors as COMM integrates ARRS.

• MetroCell and OneCell are compelling long-term opportunities for

COMM in a 5G-ramping world, as COMM is one of the few vendors

that can offer an end-to-end solution set for customers.

• The opportunity for ARRS to utilize COMM’s sales channel is a revenue

synergy opportunity that is not modeled into our assumptions.

• COMM revenue mix remains skewed towards the enterprise-owned

data centers versus hyperscale highlighting the significant opportunity

that remains.

Key Points

Valuation

Key Exhibits

COMM Mini P&L; New Segments

$22 Target Price: Our target price is computed from a P/EPS multiple of10.0x on our 2022 EPS estimate of $2.12.

Risks: Changes to competitive position, execution of strategy, leverage,

and technological obsolescence.

Adjusted EBITDA Emphasizes Seasonality


Link Initiation: Increasingly Indexed to Cloud Capex Trends


Link: 4Q20 Results

($ millions) FY20 FY21E FY22E

Venue and Campus Networks 1,936.6 1,986.2 2,065.6

BroadBand 2,895.5 3,024.4 3,093.9

Outdoor Wireless 1,243.8 1,328.0 1,347.0

Home 2,360.0 2,335.6 2,464.0

Total revenues 8,435.9 8,674.1 8,970.6

y/y growth 15.3% 2.8% 3.4%

Gross Profit 2,803.3 2,952.2 3,132.6

Gross Margin 33.2% 34.0% 34.9%

Operating Profit 1,056.8 1,138.0 1,227.7

Operating Margin 12.5% 13.1% 13.7%

Net income 370.8 449.4 541.0

Sharecount 238.5 247.1 255.1

EPS 1.55 1.81 2.12

y/y growth (25.7%) 13.0% 16.6%

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

2Q

20

3Q

20

4Q

20

1Q

21

2Q

21

3Q

21

4Q

21

1Q

22

2Q

22

3Q

22

4Q

22

Adju

sted E

BIT

DA

(M

illio

ns

$)

Home Networks

Outdoor Wireless

Networks

Broadband Networks

Venue and Campus

Networks (Includes

Rukus)

https://plus.credit-suisse.com/r/V7cRzi2AF-e


https://plus.credit-suisse.com/s/V7qK614AF-ZSOp

126

F5 Networks (FFIV)NEUTRAL | Target Price: $207 | Mkt. Cap. $7.5B

Networking


• We are Neutral feeling confident in our modeling and recent 1Q21

industry channel checks indicate a slight slowdown in enterprise

demand for IT solutions and lower US Federal demand in 1H21 than

our initial 2021 expectations

• F5 Networks still remains the ADC market leader, commanding over

40% market share in the past five years and an expanding lead.

• High software revenue growth and traction are still expected to continue

amid COVID-19 related spending uncertainty, fueled by customer

readiness for software solutions and FFIV’s efforts to reduce adoption

friction.

• Despite COVID-19 challenges, large enterprises will adopt hybrid clouds

given their network complexities and compliance, and FFIV provides

products and services essential for this transition

Key Points Key Exhibits

FFIV Mini P&L

Revenue Mix to Stabilize; Service Revs at 50% of total 2022E


Valuation

$207 Target Price: Our target price is based on a 17.5x price multiple onour FY22 EPS of $11.83.

Risks: Changes to competitive position, execution of strategy, ADC

market evolution, and technological obsolescence.

Link Initiation: 1Q21 Preview, Downgrade to Neutral


Link: Driven, De-risked, and Underappreciated


Products 985.6 1,032.6 1,192.0 1,381.8

Services 1,256.9 1,325.0 1,353.0 1,366.5

Total revenues 2,242.4 2,357.6 2,545.0 2,748.4

y/y growth 3.7% 5.1% 7.9% 8.0%

Gross Profit 1,916.7 2,001.4 2,153.3 2,355.1

Gross Margin 85.5% 84.9% 84.6% 85.7%


Operating Profit 770.0 716.5 808.5 946.9


Net income 626.3 574.9 632.8 745.9

Sharecount 60.3 61.2 62.3 63.0

EPS 10.38 9.39 10.16 11.83

y/y growth 4.8% (9.5%) 8.2% 16.4%

0%

10%

20%

30%

40%

50%

60%

0

500

1,000

1,500

2,000

2,500

3,000

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019E FY2020E FY2021E FY2022E

% o

f To

tal R

eve

nu

e

Re

ven

ue

($

mill

ion

s)

Service Revenue Product Revenue Service as a % of Total Revenue

https://plus.credit-suisse.com/s/_Yc2P4AN-e


https://plus.credit-suisse.com/s/V7o9Ra4AF-ZSOp

127

Cisco Systems Inc. (CSCO)NEUTRAL | Target Price: $46 | Mkt. Cap. $169.3B

Networking


• CSCO remains a dominant leader across numerous networking

equipment end markets, but has seen pressure from predominantly

service provider spending.

• ANET and JNPR entry into campus switching and WLAN have not been

reported to be threatening to CSCO’s very high market share in both

segments.

• COVID-19 and WFH movement putting pressure on campus product

groups that contribute high margins

• Tariffs are not having a large impact on CSCO’s results, however

numerous end markets for CSCO are experiencing slowdowns into 2020,

incl. Service Providers, where we don’t expect recovery near-term.

Key Points

Valuation

Key Exhibits

CSCO Mini P&L

CSCO Working to Increase Recurring Revenue Streams Across

Software and Services$46 Target Price: Our target price is based on FY22E EPS of $3.41 at a13.5x FY2 multiple.

Risks: Disruption to distribution model, reliance on suppliers, heavy marketcompetition, industry consolidation, and more.


Link Initiation: Transitioning into a Recurring Place


Link: F2Q21 Results, Solid Results


Key I/S Items (Non-GAAP)

Products 39,005 35,978 35,653 36,790

Infrastructure Platforms 30,191 27,121 26,638 27,171

Applications 5,802 5,568 5,543 5,820

Security 2,730 3,153 3,456 3,784

Other Products 281 135 16 16

Services 12,899 13,323 13,639 14,048

Total revenues 51,904 49,301 49,292 50,839

y/y growth 5.2% (5.0%) (0.0%) 3.1%

Gross Profit 33,479 32,538 32,532 33,629

Gross Margin 64.5% 66.0% 66.0% 66.1%

Operating Profit 16,716 16,651 16,593 17,201


Net income 13,787 13,649 13,596 13,985

Sharecount 4,455 4,255 4,212 4,100

EPS 3.09 3.21 3.23 3.41

y/y growth 18.8% 3.7% 0.6% 5.7%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

1Q

20

2Q

20

3Q

20

4Q

20

1Q

21

E

2Q

21

E

3Q

21

E

4Q

21

E

1Q

22

E

2Q

22

E

3Q

22

E

4Q

22

E

Tota

l Re

ven

ue

($

mill

ion

s)

Software Revenue Service Revenue Hardware Revenue

https://plus.credit-suisse.com/r/V7cRzX2AF-e


https://plus.credit-suisse.com/s/V7pC7l4AF-ZSOp

128

Juniper Networks (JNPR)UNDERPERFORM | Target Price: $22 | Mkt. Cap. $7.7B

Networking


• Solutions have historically been more levered to the telecom service

providers (carriers), and we note that the telco capex outlook remains

unclear and if it directly benefits JNPR. Recent trends suggest further

pressure on JNPR routing products.

• JNPR will not be able to offset expected profit headwinds with share

repurchases with further revenue pressures medium term.

• CSCO advancing into JNPR’s turf with 8000 Series SP routers

intensifies JNPR’s already struggling SP segment.

• New Mist Systems acquisition to be met with heavy WLAN competition.

• The upcoming 400G switching cycle will be a more competitive

landscape (white boxes, CSCO, ANET)

Key Points

Valuation

Key Exhibits

JNPR Mini P&L

JNPR Is Heavily Levered to Telco and Cable Customers,

Comprising ~39% of Revenues$22 Target Price: Our target price is based on an average of a 12.5xP/EPS multiple on our FY22 estimates of $1.78.

Risks: Technological advancements, increased customer spend,increasing market share, increasing capital returns.


Link Initiation: Competitive Pressures Only Intensifying


Link: 2021 Investor Day Takeaways


Product 2,997.5 1,150.1 1,128.2 1,210.6

Service 1,424.6 504.7 508.9 546.3

Routing 1,623.2 1,612.1 1,708.4 1,725.5

Switching 901.0 918.9 971.3 981.0

Security 343.5 314.0 319.6 323.9

Services 1,577.7 1,600.1 1,642.6 1,683.7

Total revenues 4,445.4 4,445.1 4,642.0 4,714.1

y/y growth (4.3%) (0.0%) 4.4% 1.6%

Gross Profit 2,671.8 2,632.4 2,780.3 2,828.3

Gross Margin 60.1% 59.2% 59.9% 60.0%


Operating Profit 738.9 691.6 729.3 748.8


Net income 597.5 519.7 525.7 544.7

Sharecount 347.0 333.9 322.0 306.3

EPS 1.72 1.56 1.63 1.78

y/y growth (8.4%) (9.6%) 4.9% 8.9%

25% 24% 26% 28% 27% 30% 31% 33% 33% 36% 34% 34% 36% 36% 33% 32% 34%

47% 46%47% 43% 46%

49% 44% 44% 46%44% 43%

41%40% 41% 35% 38%

39%

28% 30% 27% 29% 27%21%

25% 24% 21% 20% 22% 26% 24% 23% 24% 25% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20

% o

f To

tal R

eve

nu

e

Enterprise Telecom and Cable Cloud

https://plus.credit-suisse.com/r/V7cRz32AF-e


https://plus.credit-suisse.com/s/V7qIa34AF-ZSOp

129

Ubiquiti Inc. (UI)UNDERPERFORM | Target Price: $126 | Mkt. Cap. $10.5B

Networking


• While UI beat expectations in 2020, benefiting from WFH dynamics, we

believe UI’s growth should moderate in 2021 due to (1) its low-endcustomer base, not requiring further updates or additions to connectivity

purchases and (2) lapping difficult comps in enterprise

• While we are not certain the extent of the damage and operational risk

of the January 2021 breach, we believe there is some merit to the

whistleblower’s report considering the source (KrebsonSecurity, a

trusted cybersecurity investigator) and given the UI customer impact

from breaches of this sort, we believe there is reputational risk to UI

which may begin impacting UI’s sales generation starting in CY2Q21

• Capital allocation intensity is unsustainable; >200% intensity in share

repurchases alone in FY19 and FY20, we forecast repurchases of

$275M/$325M in FY21/22.

Key Points

Valuation

Key Exhibits

UI Mini P&L

UI Repurchase Program Unsustainable$126 Target Price: Our target price is based on a P/FY2 EPS multiple of17.5x and our FY22 EPS estimate of $7.21

Risks: Technological advancements, increased customer spend,increasing market share, increasing capital returns.


Link: UI: Ubiquitous Growth Deceleration

UBNT: LTU Chip to Propel or Break UBNT

Link: UO: Not An April Fool’s Joke

Non-GAAP ($ millions) FY19 FY20 FY21E FY22E

Service Provider Technology 428.5 442.0 574.6 488.4

Enterprise Technology 733.2 842.5 1,114.4 920.7

Total Revenue 1,161.7 1,284.5 1,689.1 1,409.1

y/y growth 14.2% 10.6% 31.5% (16.6%)

Gross Profit 538.0 608.3 814.2 679.3

Gross Margin 46.3% 47.4% 48.2% 48.2%

Operating Expense 122.8 127.2 168.9 145.1

Operating Income 415.2 481.1 645.3 534.1


Net Income 356.0 384.6 534.4 433.4

Diluted S/O 71.6 65.0 62.9 60.1

EPS $4.97 $5.92 $8.50 $7.21

y/y growth 34.8% 19.1% 43.6% (15.2%)

0%

50%

100%

150%

200%

250%

300%

350%

400%

0

100

200

300

400

500

600

700

As

% o

f O

CF

Capita

l A

lloca

tion (

$ m

illio

ns)

Share Repurchases OCF Share Repurchases % of OCF

https://plus.credit-suisse.com/r/V7cRz32AF-e


https://plus.credit-suisse.com/s/V7qwJA4AF-ZSOp

Appendix

Basic Information

EV/Revenue EV/NOI EV/EBITDA P/FFO P/AFFO Net Debt/EBITDA Capex/Revenue Div. Yield

2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E Current

Equinix EQIX $684 $61,113 $10,616 $71,729 Outperform $942 37.6% 10.8x 10.1x 16.6x 15.3x 23.0x 20.6x 36.5x 36.6x 25.2x 24.2x 3.4x 3.1x 38% 38% 1.6%

Digital Realty DLR $143 40,172 12,474 52,647 Outperform $167 16.9% 12.2x 11.1x 18.9x 17.6x 21.0x 19.6x 22.5x 21.7x 24.2x 19.3x 5.0x 4.6x 46% 45% 3.1%

CyrusOne CONE 70 8,419 3,148 11,567 Neutral $82 17.3% 10.3x 9.5x 16.5x 15.1x 19.8x 17.6x 17.7x 17.6x 18.3x 17.8x 5.4x 4.8x 82% 76% 2.9%

CoreSite Realty COR 121 5,221 1,684 6,905 Outperform $156 28.4% 10.6x 9.9x 16.8x 15.5x 20.1x 18.0x 22.0x 19.8x 23.0x 20.1x 4.9x 4.4x 32% 30% 4.0%

QTS Realty QTS 64 4,590 1,670 6,260 Neutral $71 10.7% 10.3x 9.4x 16.0x 14.3x 18.6x 17.0x 21.3x 20.3x 23.7x 21.9x 5.0x 4.5x 128% 126% 3.0%

Data Center REITs AVG $23,903 $5,918 $29,822 10.8x 10.0x 17.0x 15.6x 20.5x 18.6x 24.0x 23.2x 22.9x 20.7x 4.7x 4.3x 65% 63% 2.9%

GDS Holdings GDS $79 $15,624 1,280 $16,904 Consensus 13.9x 10.3x 29.1x 21.1x 2.2x 1.6x 53% 102% 0.0%

Switch, Inc. SWCH 17 4,292 892 5,185 Outperform $19 10.2% 9.4x 8.2x 18.9x 16.5x 17.5x 15.5x 3.0x 2.7x 59% 51% 1.0%

NextDC NXT 8 5,064 110 5,174 Consensus 26.9x 22.4x 610.2x 51.4x 41.5x 1.1x 0.9x 132% 152% 0.0%

Chinadata Group CD 16 5,796 (353) 5,443 Consensus 12.8x 8.8x 214.3x 29.2x 18.8x 90% 0.0%

Non-REIT Data Centers AVG $8,327 $761 $9,088 15.8x 12.4x 18.9x 280.3x 31.8x 24.2x 2.1x 1.7x 81% 102% 0.3%

American Tower AMT $245 $108,745 $23,131 $131,876 Outperform $296 21.0% 15.4x 14.5x 21.5x 20.3x 23.3x 22.1x 27.4x 26.4x 26.6x 26.3x 4.1x 3.9x 12% 16% 1.9%

Crown Castle CCI 176 76,177 19,453 95,630 Neutral $155 -12.1% 15.5x 14.8x 23.3x 22.2x 26.5x 25.3x 29.0x 27.5x 26.3x 25.3x 5.4x 5.1x 26% 26% 2.9%

SBA Comm. SBAC 284 31,047 10,473 41,520 Neutral $277 -2.5% 18.9x 18.0x 24.5x 23.4x 26.6x 25.1x 34.5x 31.7x 27.9x 26.5x 6.7x 6.3x 6% 16% 0.7%

Radius Global Infrastructure RADI 15 888 430 1,317 Outperform $19 29.7% 15.2x 12.5x 15.9x 13.1x 51.8x 38.0x 16.9x 12.4x 161% 153% 0.0%

Tower REITs AVG $54,214 $13,371 $67,586 16.2x 14.9x 21.3x 19.7x 32.1x 27.6x 30.3x 28.5x 26.9x 26.0x 8.3x 6.9x 51% 53% 1.4%

Bharti Infratel INFRATEL.NS $7 $38,661 $19,754 $58,416 Consensus 3.7x 3.3x 66.4x 33.1x 7.6x 6.5x 2.6x 2.2x 19% 22% 0.4%

Cellnex Telecom CLNX-MCE 50 $28,764 $7,955 $36,719 Consensus 13.6x 10.0x 224.9x 17.3x 12.1x 3.8x 2.6x 18% 26% 0.1%

China Tower 0788.HK 0 $26,084 $16,675 $42,759 Consensus 3.2x 3.0x 33.6x 26.5x 4.4x 4.1x 1.6x 31% 43% 1.4%

Helios Towers HTWS.L 2 $2,113 $692 $2,805 Consensus 6.0x 5.2x -177.7x 179.9x 10.8x 9.0x 28% 26% 0.0%

Infrastrutture Wireless Italiane INW.MI 11 9,153 4,544 13,696 Consensus 14.6x 13.4x 58.6x 40.7x 16.9x 15.4x 5.6x 5.1x 8% 53% 1.4%

Rai Way SpA RWAY.MI 6 1,319 57 1,376 Consensus 5.0x 4.8x 18.8x 17.4x 8.4x 7.9x 0.3x 0.3x 14% 26% 4.8%

International Tower AVG $17,682 $8,280 $25,962 7.7x 6.6x -0.1x 87.1x 10.9x 9.2x 3.1x 2.4x 20% 33% 1.3%

Akamai AKAM $102 $16,728 $1,679 $18,407 Consensus 5.4x 5.1x 20.7x 19.0x 12.3x 11.4x 1.1x 1.0x 18% 21% 0.0%

Limelight Networks LLNW 4 451 (9) 442 Consensus 2.0x 1.8x 20.1x 14.7x -0.4x -0.3x 15% 11% 0.0%

Fastly FSLY 68 7,741 (104) 7,637 Consensus 20.0x 15.8x 5% 10% 0.0%

Cloudflare NET 70 21,633 (606) 21,027 Consensus 35.5x 26.8x 8% 10% 0.0%

CDN AVG $11,638 $240 $11,878 15.7x 12.4x 20.7x 19.0x 16.2x 13.1x 0.4x 0.4x 11% 13% 0.0%

Lumen Technologies LUMN $13 $14,786 $33,212 $47,998 Consensus 2.4x 2.5x 28.0x 32.4x 5.7x 6.0x 3.9x 4.1x 18% 19% 7.5%

Uniti Group UNIT 11 2,537 4,826 7,363 Consensus 6.8x 6.6x 71.5x 59.9x 8.6x 8.4x 5.2x 6.3x 4.3x 6.3x 5.7x 5.5x 32% 29% 5.4%

Cogent Communications CCOI 70 3,309 685 3,994 Neutral $70 0.6% 6.8x 6.4x 10.9x 10.2x 17.9x 16.5x 3.1x 2.8x 11% 12% 4.1%

Consolidated Comm. CNSL 7 528 2,059 2,587 Consensus 2.0x 2.1x 59.9x 144.5x 5.1x 5.3x 4.1x 4.2x 18% 17% 0.0%

Fiber AVG $5,290 $10,196 $15,485 4.5x 4.4x 42.6x 61.7x 9.3x 9.0x 5.2x 6.3x 4.3x 6.3x 4.2x 4.2x 20% 19% 4.2%

AT&T T $31 $220,793 $173,206 $393,999 Consensus 2.3x 2.3x 24.4x 23.0x 7.3x 7.3x 3.2x 3.2x 11% 9% 6.7%

Verizon VZ 59 244,260 127,181 371,441 Consensus 2.8x 2.7x 17.7x 17.3x 7.6x 7.4x 2.6x 2.5x 13% 14% 4.2%

T-Mobile TMUS 130 161,589 96,862 258,451 Consensus 3.3x 3.2x 87.0x 63.7x 9.5x 9.0x 3.6x 3.4x 8% 14% 0.0%

U.S. Cellular USM 37 3,184 2,188 5,372 Consensus 1.3x 1.3x 32.0x 33.2x 5.1x 5.0x 2.1x 16% 24% 0.0%

Cincinnati Bell CBB 15 783 2,004 2,787 Consensus 1.7x 1.7x 14% 14% 0.0%

Telecoms AVG $126,122 $80,288 $206,410 2.3x 2.3x 40.3x 34.3x 7.4x 7.2x 2.9x 3.0x 13% 15% 2.2%

Comcast CMCSA $55 $250,104 101,632 $351,736 Consensus 3.1x 3.0x 30.5x 23.2x 10.7x 9.5x 3.1x 2.7x 9% 8% 1.7%

Charter Communications CHTR 612 118,492 83,099 201,591 Consensus 4.0x 3.8x 49.0x 38.4x 10.3x 9.4x 4.2x 3.9x 14% 15% 0.0%

Liberty Global LBTA 26 14,838 13,518 28,356 Consensus 2.2x 2.3x 59.9x 45.6x 5.1x 5.0x 2.4x 2.4x 9% 14% 0.0%

Dish DISH 38 19,859 12,089 31,948 Consensus 1.8x 1.8x 17.8x 21.3x 9.7x 10.5x 3.7x 4.0x 3% 2% 0.0%

Cable One CABO 1779 10,736 1,622 12,357 Consensus 8.5x 7.8x 45.3x 38.6x 16.3x 14.5x 2.1x 1.9x 18% 20% 0.5%

WideOpenWest Inc WOW 13 1,175 2,281 3,456 Consensus 3.1x 3.2x 58.4x 45.5x 7.8x 7.5x 4.9x 22% 21% 0.0%

Cable AVG $69,200 $35,707 $104,907 3.8x 3.6x 43.5x 35.4x 9.9x 9.4x 3.1x 3.3x 13% 13% 0.4%

Credit Suisse Defined TMT AVG $39,547 $19,345 $58,892 9.6x 8.3x 25.5x 69.2x 17.3x 14.8x 19.8x 19.3x 18.0x 17.7x 3.6x 3.3x 34% 39% 1.6%

Company / Group Ticker PriceCurrent Market

Cap ($mil)

Rating /

Consensus

Target

Price

Upside /

Downside

Net Debt

($mil)EV ($mil)


Comp Sheet – Communications Infrastructure

Source: Company Data, FactSet, CS Research.

Basic Information

P/Revenue P/E P/FCF EV/FCF Revenue

2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E

Cisco Systems CSCO $51.77 218,755 (9,538) 209,217 Neutral 46.0 (11.1%) 4.4x 4.3x 16.0x 15.2x 14.5x 12.9x 13.9x 12.3x

Arista Networks ANET $307.82 23,496 (2,447) 21,049 Outperform 359.0 16.6% 8.9x 7.8x 31.4x 27.8x 28.2x 24.8x 25.3x 22.2x

Juniper Networks JNPR $25.42 8,314 (1,139) 7,175 Underperform 22.0 (13.5%) 1.8x 1.8x 15.6x 14.3x 15.6x 13.9x 13.4x 12.0x

F5 Networks FFIV $210.90 13,002 (1,331) 11,671 Neutral 207.0 (1.8%) 5.1x 4.7x 20.8x 17.8x 20.6x 15.4x 18.5x 13.8x

Ubiquiti Networks UI $277.90 17,455 526 17,980 Underperform 126.0 (54.7%) 10.3x 12.4x 32.6x 38.6x 31.2x 46.0x 32.1x 47.4x

Networking AVG 56,205 53,419 6.1x 6.2x 23.3x 22.7x 22.0x 22.6x 20.6x 21.6x

1 1 3 5 6 7 8

Apple AAPL $482.46 2,118,826 35,217 2,154,043 Consensus 6.4x 6.1x 108.6x 102.9x 25.7x 24.3x 26.1x 24.7x

Microsoft Corp MSFT $249.90 1,869,414 (49,186) 1,820,228 Consensus 11.4x 10.3x 33.8x 30.9x 35.3x 31.8x 34.4x 31.0x

Alphabet GOOGL $2,239.03 1,393,138 (108,822) 1,284,316 Consensus 6.2x 5.3x 32.2x 27.6x 26.6x 22.1x 24.5x 20.4x

Tencent Holdings 700 $80.86 806,921 4,730 811,651 Consensus 8.9x 7.4x 34.4x 28.1x 27.4x 25.4x 27.5x 25.5x

Facebook FB $313.09 736,693 (51,018) 685,675 Consensus 6.8x 5.7x 27.7x 23.2x 27.2x 21.0x 25.3x 19.6x

Intel INTC $66.25 266,983 13,033 280,016 Consensus 3.7x 3.7x 14.4x 14.1x 19.9x 17.2x 20.9x 18.0x

Cisco Systems CSCO $51.77 218,755 (9,538) 209,217 Neutral 46.0 (11.1%) 4.4x 4.3x 16.0x 15.2x 14.5x 12.9x 13.9x 12.3x

Oracle ORCL $74.07 214,189 33,435 247,624 Consensus 5.2x 5.0x 15.4x 14.2x 16.4x 15.2x 19.0x 17.6x

IBM IBM $134.93 119,938 52,194 172,132 Consensus 1.6x 1.6x 12.1x 11.1x 13.7x 10.3x 19.7x 14.8x

Broadcom AVGO $482.46 197,565 32,380 229,945 Consensus 7.4x 7.0x 18.0x 16.6x 15.7x 14.5x 18.3x 16.9x

Texas Instrument TXN $193.09 179,608 551 180,159 Consensus 10.8x 10.3x 28.7x 26.7x 28.9x 27.1x 29.0x 27.2x

Applied Materials AMAT $139.14 128,050 (925) 127,125 Consensus 5.9x 5.5x 23.1x 21.0x 25.2x 21.5x 25.0x 21.3x

VMware VMW $153.57 16,893 1,271 18,164 Consensus 1.3x 1.2x 22.6x 20.2x 4.8x 4.0x 5.2x 4.3x

HPE HPE $15.90 20,714 14,574 35,288 Consensus 0.8x 0.7x 8.7x 8.3x 16.7x 11.1x 28.5x 19.0x

Symantec SYMC $21.75 12,773 2,629 15,402 Consensus 4.7x 4.5x 13.4x 12.5x 13.7x 13.0x 16.5x 15.7x

Large Cap. Internet AVG 558,103 552,812 5.6x 5.2x 26.8x 24.3x 20.8x 18.1x 22.0x 19.0x

Salesforce CRM $220.79 203,624 (5,557) 198,067 Consensus 7.9x 6.7x 64.2x 53.2x 45.2x 34.6x 44.0x 33.7x


Citrix Systems CTXS $142.68 17,458 1,100 18,558 Consensus 5.2x 4.8x 22.5x 19.6x 17.5x 14.9x 18.6x 15.8x

Cloudera CLDR $12.34 3,686 83 3,769 Consensus 4.0x 3.7x


Next Gen. Data Center AVG 53,032 51,922 5.5x 4.8x 35.2x 30.2x 23.9x 19.6x 23.3x 19.0x



Fortinet FTNT $192.83 31,770 (1,784) 29,986 Consensus 10.4x 9.0x 52.4x 45.5x 31.0x 26.2x 29.2x 24.7x

Zscaler ZS $180.02 24,757 (504) 24,254 Consensus 38.8x 29.2x

Palo Alto Networks PANW $338.57 32,808 459 33,267 Consensus 7.9x 6.6x 57.7x 48.0x 27.0x 21.5x 27.4x 21.8x

Netscout Systems NTCT $27.98 2,109 34 2,144 Consensus 2.5x 2.3x 16.2x 14.2x 12.4x 10.9x 12.6x 11.1x

F5 Networks FFIV $210.90 13,002 (1,331) 11,671 Neutral 207.0 (1.8%) 5.1x 4.7x 20.8x 17.8x 20.6x 15.4x 18.5x 13.8x

Ubiquiti Networks UI $277.90 17,455 526 17,980 Underperform 126.0 (54.7%) 10.3x 12.4x 32.6x 38.6x 31.2x 46.0x 32.1x 47.4x

High Growth Networking AVG 18,442 18,032 10.6x 9.2x 33.4x 30.3x 22.2x 21.3x 21.5x 20.8x

Motorola Solutions MSI $189.93 32,166 4,589 36,755 Outperform 198.0 4.2% 4.0x 3.8x 22.0x 19.7x 20.7x 17.9x 23.6x 20.5x

CommScope COMM $15.42 3,136 9,524 12,660 Outperform 21.0 36.2% 0.4x 0.3x 8.5x 7.3x 5.8x 5.4x 23.2x 21.9x

L3Harris LHX $208.65 43,029 6,492 49,521 Consensus 2.3x 2.2x 16.1x 14.5x 15.0x 13.8x 17.2x 15.9x

Nokia NOK $13.61 23,064 (1,927) 21,136 Consensus 0.9x 0.9x 62.0x 49.3x 88.9x 81.5x 39.4x

Ericsson ERIC $13.61 45,186 (1,336) 43,850 Consensus 1.6x 19.2x 22.2x 21.6x

Telco. Equipment AVG 30,158 34,053 1.8x 1.8x 25.6x 22.7x 30.5x 7.4x 33.4x 24.4x

CS Telco & Networking AVG 143,188 142,047 5.9x 5.4x 28.8x 26.0x 23.9x 17.8x 24.2x 21.0x

Company / Group Ticker PriceCurrent Market

Cap. ($mil)EV ($mil) Rating / Consensus

Upside /

DownsideTarget PriceNet Debt ($mil)


Comp Sheet – Telecom & Networking Equipment

Source: Company Data, FactSet, CS Research.


We identify a number of investment risks in Data Center REITs ("the companies") including:

1. Technological Disruption: Currently, the market environment is pushing enterprises and I.T. customers to outsource and decentralize their I.T. operations(specifically workloads), and we acknowledge that this theme could flip, pushing companies back to insourcing their operations, decreasing demand for data

center space.

2. Data Center Space Demand & Supply: Space and power pricing have led to significant increases and decreases in lease pricing per square foot, which webelieve is a risk, given some I.T. infrastructure operators may decide to flood the market with capacity in a speculative fashion, depressing market prices and

challenging a data center REIT's ability to deploy capital at the right returns on investment.

3. Heavy Market Competition: Currently, the market is favoring data center REITs for their expertise and ecosystems; however, expertise, general technology,and ecosystems are becoming critical table stakes to operate in the industry, increasing the competition and differentiation and inevitably compressing prices.

4. Reliable Infrastructure: Data center REITs generally operate in locations that have direct, or close proximity to, dark fiber for Internet connectivity. If theseinfrastructure connections break or are rendered obsolete, they will challenge data center REITs from a latency perspective, making them less attractive

solutions for I.T. customers.

5. Power Reliability and Cost: Power costs are currently stable and declining; however, it is possible that costs may increase, driven primarily by rising interestrates, affecting margins and valuation for the data center REIT group.

6. Macro and FX Risk: The companies may generate revenues or underwrite leases denominated in non-U.S. currency, exposing themselves to non-U.S.headwinds such as currency fluctuations in the international markets.

7. Political/Regulatory Risks: Data sovereignty is a major issue across continental, regional, national, and state borders, making some data center operatorscompletely irrelevant to certain types of businesses or entities, specifically government entities, or companies that are domiciled in strictly regulated countries.

8. Rising Interest Rates: The general interest rate environment is trending upward based on the Fed's reviews, and even though data center REITs are not aslevered as other assets such as utilities, interest rates may still have an adverse effect on equity valuations.

9. REIT Qualification Loss: The companies must abide by several complex rules to qualify for their tax-free status including the distribution of 90%+ of REITtaxable income (before dividends) or risk being subject to statutory tax rates. Of the value of assets, 75% must be cash equivalents or real estate assets.

Further, no more than 50% of a data center REIT's shares may be owned by less than five owners. This structure may prevent data center REITs from funding

future opportunities. Dividends payable by REIT’s generally are not eligible for the preferential tax rates on qualified dividend income, which could make data

center REIT shares less attractive than normal corporations that pay dividends. The company’s REIT structure gives it the ability to limit investor ownership

above 9.8% of outstanding shares and prevent a change in control. The company also cannot merge unless 35%+ of holders of its common and long-term

incentive units agree. Further, holders of preferred shares can convert their holdings into common stock during a change of control.

Source: Credit Suisse estimates, Company data

Investment Risks

IMPORTANT LEGAL INFORMATION


HOLT Valuation Methodology and Risks

The HOLT methodology does not assign ratings or a target price to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called

the HOLT valuation model, that are consistently applied to all the companies included in its database. The HOLT valuation model is a discounted cash flow model. Third-party data (including consensus earnings

estimates) are systematically translated into a number of default variables and incorporated into the algorithms available in the HOLT valuation model. The source financial statement, pricing, and earnings data

provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. These adjustments provide consistency when

analyzing a single company across time, or analyzing multiple companies across industries or national borders.

The default scenario that is produced by the HOLT valuation model establishes a warranted price that represents the expected mean value for a security based upon empirically derived fade algorithms that forecast a

firms future return on capital and growth rates over an extended period of time. As the third-party data are updated, the warranted price updates automatically. A company’s future achieved return on capital or

growth rate may differ from HOLT default forecast. Additional information about the HOLT methodology is available upon request.

CFROI, CFROE, HOLT, HOLT Lens, HOLTfolio, “Clarity is Confidence” and “Powered by HOLT” are trademarks or registered trademarks of Credit Suisse Group AG or its affiliates in the United States and other

countries.

© 2018 Credit Suisse Group AG and its subsidiaries and affiliates. All rights reserved.

FOR IMPORTANT DISCLOSURES on companies covered in Credit Suisse Global Markets Division research reports, please see www.credit-suisse.com/researchdisclosures. To obtain a copy of the most recent

Credit Suisse research on any company mentioned please contact your sales representative or go to http://www.credit-suisse.com/researchandanalytics.

Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance. Backtested, hypothetical or

simulated performance results have inherent limitations. Simulated results are achieved by the retroactive application of a backtested model itself designed with the benefit of hindsight. The backtesting of

performance differs from the actual account performance because the investment strategy may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are

achieved. Alternative modeling techniques or assumptions might produce significantly different results and prove to be more appropriate. Past hypothetical backtest results are neither an indicator nor a guarantee of

future returns. Actual results will vary from the analysis.

Investment principal on securities can be eroded depending on sale price or market price. In addition, there are securities on which investment principal may be eroded due to changes in redemption amounts. Care is

required when investing in such instruments.

The information contained in this document does not constitute legal or tax advice. Credit Suisse accepts no liability for losses arising from the use of this material. This material does not purport to contain all of the

information that an interested party may desire and, in fact, provides only a limited view of a particular market.

European Market Abuse Regulation (Securities Traded on EU-Regulated Markets)

The European Market Abuse Regulation requires that Investment Recommendations are identified and Credit Suisse policy is to ensure any recommended or suggested investment strategy is classified accordingly.

For the Purposes of MAR, HOLT Investment Recommendations will have the following meanings:

Relative Buy : Applying the HOLT framework and valuation model, the stock shows upside potential on a relative basis.

Hold : Applying the HOLT framework and valuation model, the stock looks fairly valued on a relative basis.

Relative Sell : Applying the HOLT framework and valuation model, the stock shows downside potential on a relative basis.

For date and time of production, dissemination and history of recommendation for the subject company(ies) featured in this material, disseminated within the past 12 months, please refer to this link:

https://rave.credit-suisse.com/disclosures/view/content/holt.

Source: Credit Suisse HOLT.

134

http://www.credit-suisse.com/researchdisclosures

http://www.credit-suisse.com/researchandanalytics

https://rave.credit-suisse.com/disclosures/view/content/holt

Valuation Methodology and Risks

Target Price and Rating Valuation Methodology and Risks: (12 months) for American Tower (AMT.N)

Method: Our Outperform rating and Target Price of $296 for American Tower are weighted one-half to our 30.0x P/ 2022 AFFO per share estimate of $9.31 and one-half to our DCF with a WACC of 5.6% and terminal growth rate of 2.5%. We rate American Tower Outperform as we expect its total return to exceed REIT peers.

Risk: Risks to our $296 target price and Outperform rating for American Tower are 1) economic risk associated with a slowdown in overall telecom spending, 2) shift away from macro tower infrastructure towards small cells, 3) customer concentration - revenues are highly tied to the three large US carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Arista Networks (ANET.N)

Method: We value ANET based on a 8.0x EV/FY2 Sales multiple multiplied by our FY22 non-GAAP Sales estimate of $3,009M to arrive at a multiple-based valuation of $339, blended with our DCF valuation of $378 (WACC 7.2%, TVGR 2.5%) to arrive at our target price of $359, which helps drive our Outperform rating.

Risk: Potential downside risks to our Outperform rating and $359 TP include decreased long-term campus demand, delayed product refresh cycle timing for 400G, and weakening cloud capex trends.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Cisco Systems (CSCO.OQ)

Method: Our Target Price of $46 and Neutral rating for CSCO are based on a 13.5x P/E multiple on our 2022 Non-GAAP EPS estimate of $3.41. We rate CSCO Neutral as we expect it to perform in line with its peers.

Risk: Risks to our $46 target price and Neutral rating for CSCO are a weaker than expected macroeconomic recovery, failure to repatriate off-shore cash, and a faster than anticipated SDN development.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Cogent Communications Holdings Inc. (CCOI.OQ)

Method: Our $70 target price and Neutral rating for CCOI are based on dividend yield valuation, given its strong record of consecutive dividend increases. We project a 2021 dividend growth rate of 14.2% and a yield of 4.5%.

Risk: Risks to our $70 target price and Neutral rating for CCOI are losing key executives, high leverage, rising interest rates, technological disruption, wireless network substitution, internet pricing, decreased business activity, and macro and FX risks.

Target Price and Rating Valuation Methodology and Risks: (12 months) for CommScope Inc. (COMM.OQ)

Method: Our $21 target price and Outperform rating for CommScope are derived from our 2022 EPS estimate of $2.12 multiplied by 10x. We rate CommScope Outperform as we expect it to appreciate more than its peers.

Risk: We see three risks to CommScope's achievement of our $21 target price and Outperform rating. 1) If wireless capex spending completely shifts away from equipment spend and becomes focused on other aspects of the telecom infrastructure the company will likely not experience the revenue growth that we currently forecast. 2) Intensified competition for data center facility business may grow, impacting our growth projections of the company. 3) Net leverage and lack of recurring revenues raise some concerns as interest rates and commodity prices (copper mainly) may potentially rise on a relative basis, eroding business segment margins.

Target Price and Rating Valuation Methodology and Risks: (12 months) for CoreSite Realty Corp. (COR.N)

Method: We value COR at $156 per share which helps drive our Outperform rating. We calculate using an average of 23x 2022E adjusted funds from operations (AFFO/share) multiple and a DCF utilizing a 2.5% terminal growth rate and a 5.1% WACC.

Risk: Risks to our $156 target price and Outperform rating for CoreSite are 1) changes in I.T. architecture displacing CoreSite's technology and real estate, 2) speculative data center developments that may compress market pricing and impact CoreSite's margins and profits, 3) economic risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Crown Castle (CCI.N)

Method: Our Neutral rating and Target Price of $155 for Crown Castle are weighted one-half to our 25.0x P/ 2022 AFFO per share estimate of $6.96 and one-half to our DCF with a WACC of 5.6% and terminal growth rate of 2.5%. We rate Crown Castle Neutral as we do not expect its total return to exceed REIT peers.

Risk: Risks to our $155 target price and Neutral rating for Crown Castle are 1) economic risk associated with a slowdown in overall telecom spending, 2) technological shift away from small cell infrastructure, 3) customer concentration - revenues are highly tied to the three large US carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for CyrusOne Inc. (CONE.OQ)

Method: We value Neutral-rated CyrusOne at a target price of $82, based on 21x our 2022 P/AFFOS estimate of $3.88.

Risk: We identify five major risks to our $82 target price and Neutral rating, including: 1) change in I.T. architecture displacing CyrusOne's technology, 2) speculative data center developments that may compress market pricing and impact CyrusOne's profits, 3) macro-economic risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring companeis to own and manage their own data centers rather than leasing from CyrusOne, and 5) REIT qualification risk where the company must abide by several complex rules to qualify for its tax free status including the distribution of 90%+ of REIT taxable income (before dividends) or risk being subject to statutory tax rates.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Digital Realty Trust, Inc. (DLR.N)

Method: Our $167 target price and Outperform rating for Digital Realty is computed from a 26.5x P/ AFFO multiple applied on our 2022 AFFO per share estimate of $6.28.

Risk: Risks to our $167 target price and Outperform rating for Digital Realty are 1) changes in I.T. architecture displacing Digital's technology and real estate, 2) speculative data center developments that may compress market pricing and impact Digital's margins and profits, 3) economic risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Equinix, Inc. (EQIX.OQ)

Method: Our Outperform rating and target price of $942 are based on 30.0x our FY22E AFFOS of $30.23 per share and a DCF valuation assuming a terminal growth of 2.10% and WACC of 5.3%.

Risk: Risks to our $942 target price and Outperform rating for Equinix are 1) changes in I.T. architecture displacing Equinix's technology and real estate, 2) speculative data center developments that may compress market pricing and impact Equinix's margins and profits, 3) economic risk associated with a slowdown in overall I.T. spending, 4) regulatory risks associated with changes in data sovereignty laws, requiring companies to own and manage their own data centers rather than leasing from multi-tenant data centers, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for F5 Networks, Inc. (FFIV.OQ)

Method: Our $207 target price and Neutral rating for FFIV are based on 17.5x our FY2022 Non-GAAP EPS estimate of $11.83.

Risk: Risks to our $207 target price and Neutral for FFIV are the company executing better or worse than our expectations for several dynamics such as the transition to virtual appliances, SDN choosing ADC functionality level, the transition to DevOps converged infrastructures, and security initiatives traction.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Juniper Networks (JNPR.N)

Method: We value the company at $22 per share and an Underperform rating based on an average of P/E multiple of 12.5x on our 2022E EPS of $1.78.

Risk: The investment risks to our $22 target price and Underperform include technological disruption in the scenario new technologies arise making JNPR’s products/ services necessary. Buybacks and dividends may also drive upwards pressure on the stock.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Motorola Solutions (MSI.N)

Method: Our $198 target price and Outperform rating for MSI are based on 20.5x our 2022 Non-GAAP EPS estimate of $9.65.

Risk: Risks to our $198 target price and Outperform rating for MSI are i) Macroeconomics risks, particularly U.S. exposure, ii) exposure to the U.S. government's spending trends, iii) Risk of a large acquisition, and iv) disruptive technology. While we believe Motorola is currently well-positioned in the solutions they provide on current standards and technologies, we acknowledge the possibility of new standards and technologies having a negative impact on the demand for the company's current product portfolio.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Palo Alto Networks, Inc. (PANW.N)

Method: Our $425 target price and Outperform rating for PANW are based on our DCF analysis, using a discount rate of 6% in 2021 increasing to 8% in 2031 and a terminal growth rate of 3.5%. We expect firewall growth to be durable in 2021 and longer term, expect PANW will be able to drive incremental share gains through its relatively broad cloud security portfolio.

Risk: Risks to our $425 target price and Outperform rating for PANW are (1) Competition (2) Faster than expected deterioration of the firewall market (3) An inability to cross and upsell recent cloud security portfolio additions.

Target Price and Rating Valuation Methodology and Risks: (12 months) for QTS Realty Trust, Inc. (QTS.N)

Method: We apply a P/AFFO multiple of 24.5x to our 2022 AFFO per share estimate of $2.91 leading us to our $71 target price and Neutral rating.

Risk: The largest risks to our $71 target price and Neutral rating include technological disruption, market competition, rising interest rates, and REIT qualification loss.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Radius Global Infrastructure (RADI.OQ)

Method: We rate RADI Outperform and value it based on the average of two methods, attaining a $19 target price: (1) EV/GCF multiple of 25x (~2.5x above TowerCo peer group) our 2022E GCF of $104.5M, computing $31.13 per share; and (2) EV/EBITDA multiple of 25x (~5x above

TowerCo peer group but below RADI’s current multiple of 40x) our 2022E adjusted EBITDA of $31.6M, computing $7.22 per share.

Risk: Risks to our $19 target price and Outperform rating include high leverage, volatile FX rates, geopolitical instability, customer concentration, and increased site decommissions & competition.

Target Price and Rating Valuation Methodology and Risks: (12 months) for SBA Commns (SBAC.OQ)

Method: Our Neutral rating and Target Price of $277 for SBA Communications are weighted one-half to our 23x P/ 2022 AFFO per share estimate of $10.73 and one-half to our DCF with a WACC of 5.4% and terminal growth rate of 2.1%. We rate SBA Communications Neutral as we expect its total return to match peers.

Risk: Risks to our $277 target price and Neutral rating for SBA Communications are 1) economic risk associated with a slowdown in overall telecom spending, 2) shift away from macro tower infrastructure towards small cells, 3) customer concentration - revenues are highly tied to the three large US carriers, 4) interest rate risk - leading to greater borrowing costs, and 5) REIT qualification risk where the company must abide by numerous complex rules to qualify for its tax free status.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Switch, Inc. (SWCH.N)

Method: Our $19 target price and Outperform rating based on our discounted cash flow model with a WACC of 6.0% and a terminal growth rate of 2.5%.

Risk: Risks to our Outperform rating and $19 target price for Switch are: 1) changes in I.T. architecture displacing Switch technology, 2) speculative data center developments that may compress market pricing and impact profits, 3) revenue concentration, 4) management and board structure, and 5) share ownership control.

Target Price and Rating Valuation Methodology and Risks: (12 months) for Ubiquiti Inc. (UI.N)

Method: Our target price of $126 is derived off its 25x our FY22 EPS of $7.21. We rate UI stock Underperform, as end-market pressures continue, and we anticipate a return less than the typical stock in our coverage.

Risk: Risks to our $126 target price and Underperform rating on UI are include increased demand for low networking equipment, customer network architecture changes, and additional elevated share repurchase activity.

Companies Mentioned (Price as of 07-Apr-2021)

AT&T (T.N, $30.93) Akamai Technologies, Inc. (AKAM.OQ, $102.49) Alphabet (GOOGL.OQ, $2239.03) Amazon com Inc. (AMZN.OQ, $3279.39) American Tower (AMT.N, $244.71, OUTPERFORM, TP $296.0) Apple Inc (AAPL.OQ, $127.9) Arista Networks (ANET.N, $307.82, OUTPERFORM, TP $359.0) Cable One (CABO.N, $1779.03) Charter Communications (CHTR.OQ, $611.63) Cincinnati Bell (CBB.N, $15.38) Cisco Systems (CSCO.OQ, $51.77, NEUTRAL, TP $46.0) Cloudflare (NET.N, $70.05) Cogent Communications Holdings Inc. (CCOI.OQ, $69.55, NEUTRAL, TP $70.0) Comcast Corp. (CMCSA.OQ, $54.6) CommScope Inc. (COMM.OQ, $15.42, OUTPERFORM[V], TP $21.0) Consolidated Com (CNSL.OQ, $6.66) CoreSite Realty Corp. (COR.N, $121.47, OUTPERFORM, TP $156.0) Crown Castle (CCI.N, $176.26, NEUTRAL, TP $155.0) CyrusOne Inc. (CONE.OQ, $69.89, NEUTRAL, TP $82.0) Dell Technologies (DELL.N, $91.51) Digital Realty Trust, Inc. (DLR.N, $142.9, OUTPERFORM, TP $167.0) Dish Network (DISH.OQ, $37.74) Equinix, Inc. (EQIX.OQ, $684.45, OUTPERFORM, TP $942.0) F5 Networks, Inc. (FFIV.OQ, $210.9, NEUTRAL, TP $207.0) Facebook Inc. (FB.OQ, $313.09) Fastly (FSLY.N, $67.55) GDS Holdings Limited (GDS.OQ, $79.09) GTT Commns (GTT.N, $1.78) Hewlett Packard Enterprise (HPE.N, $15.9) International Business Machines (IBM.N, $134.93) Juniper Networks (JNPR.N, $25.42, UNDERPERFORM, TP $22.0) Limelight (LLNW.OQ, $3.63) Lumen Tech (LUMN.N, $13.48) Megaport (MP1.AX, A$12.16) Microsoft (MSFT.OQ, $249.9) Motorola Solutions (MSI.N, $189.93, OUTPERFORM, TP $198.0) NEXTDC (NXT.AX, A$11.09) NetApp (NTAP.OQ, $73.67) Oracle Corporation (ORCL.N, $74.07) Palo Alto Networks, Inc. (PANW.N, $338.57) QTS Realty Trust, Inc. (QTS.N, $64.16, NEUTRAL, TP $71.0) Radius Global Infrastructure (RADI.OQ, $14.5, OUTPERFORM[V], TP $19.0) SBA Commns (SBAC.OQ, $284.19, NEUTRAL, TP $277.0) Salesforce.com (CRM.N, $220.79) ServiceNow, Inc. (NOW.N, $510.73) Switch, Inc. (SWCH.N, $17.24, OUTPERFORM, TP $19.0) T-Mobile US (TMUS.OQ, $130.02) U.S. Cellular (USM.N, $37.0) Ubiquiti Inc. (UI.N, $277.9, UNDERPERFORM[V], TP $126.0) Uniti Group (UNIT.OQ, $10.865) VMware Inc. (VMW.N, $153.57) Verizon Communications (VZ.N, $59.0) WideOpenWest, Inc. (WOW.N, $13.47)

Disclosure Appendix

Analyst Certification

I, Sami Badri, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

3-Year Price and Rating History for American Tower (AMT.N)

AMT.N Closing Price Target Price

Date (US$) (US$) Rating

28-Apr-20 243.53 308.00 O *

30-Apr-20 238.00 300.00

03-Nov-20 234.23 301.00

06-Jan-21 214.89 307.00

26-Feb-21 216.13 296.00

* Asterisk signifies initiation or assumption of coverage.

O UT PERFO RM

3-Year Price and Rating History for Arista Networks (ANET.N)

ANET.N Closing Price Target Price


09-May-18 259.42 303.00 O *

03-Aug-18 257.54 305.00

04-Oct-18 257.74 311.00

02-Nov-18 257.77 315.00

15-Feb-19 263.95 317.00

25-Apr-19 318.11 347.00

03-May-19 278.41 344.00

07-Jun-19 246.44 340.00

02-Aug-19 244.12 312.00

01-Nov-19 185.30 144.00 N

19-Dec-19 203.75 153.00

14-Feb-20 223.47 150.00

06-May-20 208.01 147.00

05-Aug-20 235.13 148.00

03-Nov-20 249.49 184.00

06-Jan-21 285.87 351.00 O

19-Feb-21 310.95 359.00


O U T PERFO RM

N EU T RA L

3-Year Price and Rating History for Cisco Systems (CSCO.OQ)

CSCO.OQ Closing Price Target Price


09-May-18 46.04 41.00 N *

16-Aug-18 45.16 43.00

15-Nov-18 46.77 44.00

14-Feb-19 48.40 47.00

16-May-19 55.93 52.00

14-Aug-19 50.61 50.00

05-Nov-19 47.76 49.00

14-Nov-19 44.91 46.00

13-Feb-20 47.32 45.00

09-Apr-20 41.20 40.00

14-May-20 43.85 41.00

13-Aug-20 42.72 45.00

19-Oct-20 39.30 36.00

13-Nov-20 41.40 41.00

07-Dec-20 44.35 R

23-Dec-20 44.38 41.00 N

10-Feb-21 47.24 46.00


N EU T RA L

REST RICT ED

3-Year Price and Rating History for Cogent Communications Holdings Inc. (CCOI.OQ)

CCOI.OQ Closing Price Target Price


31-May-19 58.50 68.00 O *

19-Dec-19 63.97 75.00

28-Feb-20 73.01 86.00

14-Apr-20 88.16 99.00

07-Aug-20 74.61 93.00

16-Oct-20 61.07 70.00 N


O U T PERFO RM

N EU T RA L

3-Year Price and Rating History for CommScope Inc. (COMM.OQ)

COMM.OQ Closing Price Target Price


09-May-18 29.58 31.00 N *

20-Dec-18 16.05 20.00

02-Apr-19 22.83 34.00 O

10-May-19 19.09 30.00

23-Jul-19 14.61 27.00

08-Aug-19 12.95 23.00

04-Dec-19 13.01 21.00

09-Apr-20 10.41 19.00

08-May-20 11.18 17.00

07-Aug-20 11.02 18.00

04-Nov-20 9.67 19.00

06-Jan-21 14.24 22.00

18-Feb-21 13.50 21.00


N EU T RA L

O U T PERFO RM

3-Year Price and Rating History for CoreSite Realty Corp. (COR.N)

COR.N Closing Price Target Price


27-Apr-18 106.00 112.00 N

30-Jul-18 113.03 R

03-Aug-18 114.30 112.00 N

20-Dec-18 87.00 111.00

08-Feb-19 100.02 110.00

26-Apr-19 109.49 111.00

26-Jul-19 105.18 103.00

11-Nov-19 113.83 100.00

19-Dec-19 113.62 101.00

07-Feb-20 112.61 100.00

01-May-20 120.85 124.00

04-Aug-20 128.26 141.00

30-Oct-20 119.36 142.00

06-Jan-21 117.27 161.00 O

05-Feb-21 125.48 156.00


N EU T RA L

REST RICT ED

O U T PERFO RM

3-Year Price and Rating History for Crown Castle (CCI.N)

CCI.N Closing Price Target Price


28-Apr-20 161.26 149.00 N *

01-May-20 156.41 148.00

23-Oct-20 158.47 146.00

06-Jan-21 151.43 158.00

29-Jan-21 159.26 155.00


N EUT RA L

3-Year Price and Rating History for CyrusOne Inc. (CONE.OQ)

CONE.OQ Closing Price Target Price


04-May-18 54.70 73.00 O

20-Dec-18 54.85 68.00

25-Feb-19 51.64 52.00 N

03-May-19 61.11 56.00

02-Aug-19 63.02 67.00

01-Nov-19 71.11 68.00

19-Dec-19 64.67 70.00

21-Feb-20 69.60 68.00

06-May-20 73.23 78.00

04-Aug-20 84.80 92.00

03-Nov-20 71.71 87.00

06-Jan-21 68.65 82.00


O U T PERFO RM

N EU T RA L

3-Year Price and Rating History for Digital Realty Trust, Inc. (DLR.N)

DLR.N Closing Price Target Price


27-Apr-18 107.80 101.00 N

08-Aug-18 121.54 130.00

24-Sep-18 115.92 R

25-Sep-18 115.92 130.00 N

20-Dec-18 106.10 123.00

29-Oct-19 130.59 R

16-Mar-20 128.31 NR

31-May-20 143.56 164.00 O

31-Jul-20 160.54 173.00

30-Oct-20 144.30 179.00

06-Jan-21 132.11 169.00

12-Feb-21 140.06 167.00


N EU T RA L

REST RICT ED

N O T RA T ED

O U T PERFO RM

3-Year Price and Rating History for Equinix, Inc. (EQIX.OQ)

EQIX.OQ Closing Price Target Price


27-Apr-18 421.15 525.00 O

09-Aug-18 444.99 520.00

02-Nov-18 392.43 500.00

20-Dec-18 358.21 467.00

14-Feb-19 420.59 474.00

02-May-19 465.01 506.00

11-Jul-19 523.88 556.00

09-Oct-19 575.00 581.00

19-Dec-19 575.92 634.00

13-Feb-20 635.75 630.00

11-May-20 678.00 704.00

30-Jul-20 777.95 782.00

29-Oct-20 740.68 818.00

06-Jan-21 668.96 915.00

11-Feb-21 717.70 942.00


O UT PERFO RM

3-Year Price and Rating History for F5 Networks, Inc. (FFIV.OQ)

FFIV.OQ Closing Price Target Price


09-May-18 172.00 188.00 O *

05-Sep-18 189.72 216.00

25-Oct-18 171.47 218.00

24-Jan-19 156.09 215.00

25-Apr-19 162.47 211.00

18-Jul-19 145.59 188.00

25-Jul-19 147.69 191.00

24-Oct-19 145.94 192.00

20-Dec-19 138.32 163.00

28-Jan-20 126.00 160.00

09-Apr-20 125.39 156.00

28-Apr-20 140.86 151.00

20-Jul-20 152.37 170.00

28-Jul-20 137.97 183.00

22-Oct-20 127.33 184.00

27-Oct-20 136.26 185.00

19-Nov-20 160.20 205.00

08-Jan-21 191.24 207.00


O UT PERFO RM

3-Year Price and Rating History for Juniper Networks (JNPR.N)

JNPR.N Closing Price Target Price


09-May-18 26.17 21.00 U *

30-Jan-19 25.83 20.00

19-Dec-19 24.43 19.00

09-Apr-20 21.67 18.00

29-Apr-20 23.07 17.00

28-Jul-20 24.26 20.00

06-Jan-21 23.58 21.00

16-Feb-21 24.45 22.00


UN D ERPERFO RM

3-Year Price and Rating History for Motorola Solutions (MSI.N)

MSI.N Closing Price Target Price


09-May-18 105.78 129.00 O *

20-Aug-18 124.99 137.00

08-Jan-19 119.51 134.00

08-Feb-19 135.37 148.00

03-May-19 143.62 153.00

02-Aug-19 170.08 189.00

31-Oct-19 166.32 179.00

11-Nov-19 161.15 177.00

19-Dec-19 161.11 178.00

07-Feb-20 179.46 196.00

08-May-20 131.27 161.00

01-Jun-20 138.94 163.00

30-Oct-20 158.06 181.00

11-Nov-20 169.73 202.00

05-Feb-21 182.09 198.00


O UT PERFO RM

3-Year Price and Rating History for QTS Realty Trust, Inc. (QTS.N)

QTS.N Closing Price Target Price


26-Apr-18 34.50 30.00 U

08-Aug-18 44.34 42.00 N

02-May-19 44.34 44.00

31-Jul-19 46.28 46.00

06-Nov-19 53.17 51.00

19-Dec-19 52.69 52.00

25-Feb-20 61.20 64.00

05-May-20 65.85 68.00

29-Oct-20 62.17 67.00

06-Jan-21 58.39 70.00

18-Feb-21 64.12 71.00


U N D ERPERFO RM

N EU T RA L

3-Year Price and Rating History for Radius Global Infrastructure (RADI.OQ)

RADI.OQ Closing Price Target Price


22-Dec-20 13.47 19.00 O


O UT PERFO RM

3-Year Price and Rating History for SBA Commns (SBAC.OQ)

SBAC.OQ Closing Price Target Price


28-Apr-20 305.31 365.00 O *

06-May-20 288.35 361.00

03-Nov-20 291.01 357.00

06-Jan-21 264.64 365.00

03-Feb-21 272.12 291.00 N

23-Feb-21 248.79 277.00


O U T PERFO RM

N EU T RA L

3-Year Price and Rating History for Switch, Inc. (SWCH.N)

SWCH.N Closing Price Target Price


16-May-18 13.20 19.00 O

14-Aug-18 10.85 14.00

07-Aug-19 13.75 15.00

09-Oct-19 15.51 18.00

11-Nov-19 15.57 19.00

12-Feb-20 17.05 21.00

28-Feb-20 14.34 22.00

11-May-20 18.17 23.00

16-Oct-20 15.94 21.00

02-Mar-21 15.37 19.00


O UT PERFO RM

3-Year Price and Rating History for Ubiquiti Inc. (UI.N)

UI.N Closing Price Target Price


09-May-18 73.35 74.00 N *

11-May-18 81.72 73.00

27-Aug-18 85.04 79.00

12-Nov-18 105.96 86.00

08-Feb-19 124.53 103.00

13-May-19 130.95 115.00

15-Jan-20 171.25 134.00 U

10-Feb-20 142.01 130.00

26-Mar-20 146.07 127.00

11-May-20 187.37 132.00

28-Sep-20 160.93 130.00

06-Jan-21 267.75 157.00

01-Apr-21 289.15 126.00


N EU T RA L

U N D ERPERFO RM

As of December 10, 2012 Analysts’ stock rating are defined as follows:

Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months.

Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.

Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.

*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European (excluding Turkey) ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst withi n the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin America, Turkey and Asia (excluding Japan and Australia), stock ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark (India - S&P BSE Sensex Index); prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds be tween 15% and 7.5%, which was in operation from 7 July 2011.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time.

Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation:

Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.

Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.

Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.

*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%)

Outperform/Buy* 53% (32% banking clients)

Neutral/Hold* 34% (25% banking clients)

Underperform/Sell* 11% (20% banking clients)

Restricted 2%

Please click here to view the MAR quarterly recommendations and investment services report for fundamental research recommendations.

*For purposes of the NYSE and FINRA ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, a nd Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other indivi dual factors.

Important Global Disclosures

Credit Suisse’s research reports are made available to clients through our proprietary research portal on CS PLUS. Credit Suisse research products may also be made available through third-party vendors or alternate electronic means as a convenience. Certain research products are only made available through CS PLUS. The services provided by Credit Suisse’s analysts to clients may depend on a specific client’s preferences regarding the frequency and manner of receiving communications, the client’s risk profile and investment, the size and scope of the overall client relationship with the Firm, as well as legal and regulatory constraints. To access all of Credit Suisse’s research that you are entitled to receive in the most timely manner, please contact your sales representative or go to https://plus.credit-suisse.com .

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: https://www.credit-suisse.com/sites/disclaimers-ib/en/managing-conflicts.html .

Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional.

Credit Suisse has decided not to enter into business relationships with companies that Credit Suisse has determined to be involved in the development, manufacture, or acquisition of anti-personnel mines and cluster munitions. For Credit Suisse's position on the issue, please see https://www.credit-suisse.com/media/assets/corporate/docs/about-us/responsibility/banking/policy-summaries-en.pdf .

The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures/view/selectArchive for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names

Credit Suisse currently has, or had within the past 12 months, the following as investment banking client(s): DLR.N, SWCH.N, CSCO.OQ, JNPR.N, MSI.N, PANW.N

Credit Suisse provided investment banking services to the subject company (DLR.N, SWCH.N, CSCO.OQ, JNPR.N, MSI.N, PANW.N) within the past 12 months.

Within the last 12 months, Credit Suisse has received compensation for non-investment banking services or products from the following issuer(s): CCI.N, CSCO.OQ, JNPR.N

Credit Suisse has managed or co-managed a public offering of securities for the subject company (SWCH.N, JNPR.N, PANW.N) within the past 12 months.

Within the past 12 months, Credit Suisse has received compensation for investment banking services from the following issuer(s): DLR.N, SWCH.N, CSCO.OQ, JNPR.N, MSI.N, PANW.N

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (AMT.N, DLR.N, QTS.N, SWCH.N, RADI.OQ, COMM.OQ, CSCO.OQ, JNPR.N, PANW.N) within the next 3 months.

Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non-investment-banking, securities-related: CCI.N

Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non-investment-banking, non securities-related: CSCO.OQ, JNPR.N

Credit Suisse or a member of the Credit Suisse Group is a market maker or liquidity provider in the securities of the following subject issuer(s): AMT.N, ANET.N, CSCO.OQ, CCOI.OQ, COMM.OQ, COR.N, CCI.N, CONE.OQ, DLR.N, EQIX.OQ, FFIV.OQ, JNPR.N, MSI.N, PANW.N, QTS.N, RADI.OQ, SBAC.OQ, SWCH.N, UI.N

A member of the Credit Suisse Group is party to an agreement with, or may have provided services set out in sections A and B of Annex I of Directive 2014/65/EU of the European Parliament and Council ("MiFID Services") to, the subject issuer (DLR.N, SWCH.N, CSCO.OQ, JNPR.N, MSI.N, PANW.N) within the past 12 months.

As of the date of this report, Credit Suisse beneficially own 1% or more of a class of common equity securities of (SWCH.N, RADI.OQ).

Credit Suisse acted as a financial adviser to Cisco Systems Inc (CSCO.OQ) in relation to its recommended cash offer for Imimobile Plc (IMOI.L)

For date and time of production, dissemination and history of recommendation for the subject company(ies) featured in this report, disseminated within the past 12 months, please refer to the link: https://rave.credit-suisse.com/disclosures/view/report?i=605691&v=-65w8dekxnhn3xpo31urapadnv .

Important Regional Disclosures

Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from, or in connection with, this research report.

The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events.

For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html.

Investors should note that income from such securities and other financial instruments, if any, may fluctuate and that price or value of such securities and instruments may rise or fall and, in some cases, investors may lose their entire principal investment.

To the extent any Credit Suisse equity research analyst employed by Credit Suisse International (a "UK Analyst") has interactions with a Spanish domiciled client of Credit Suisse AG or its affiliates, such UK Analyst will be acting for and on behalf of CSSSV, with respect only to the provision of equity research services to Spanish domiciled clients of Credit Suisse AG or its affiliates.

Pursuant to CVM Resolution No. 20/2021, of February 25, 2021, the author(s) of the report hereby certify(ies) that the views expressed in this report solely and exclusively reflect the personal opinions of the author(s) and have been prepared independently, including with respect to Credit Suisse. Part of the author(s)´s compensation is based on various factors, including the total revenues of Credit Suisse, but no part of the compensation has been, is, or will be related to the specific recommendations or views expressed in this report. In addition, Credit Suisse declares that: Credit Suisse has provided, and/or may in the future provide investment banking, brokerage, asset management, commercial banking and other financial services to the subject company/companies or its affiliates, for which they have received or may receive customary fees and commissions, and which constituted or may constitute relevant financial or commercial interests in relation to the subject company/companies or the subject securities.

This research report is authored by:

Credit Suisse Securities (USA) LLC .................................................................................................... Sami Badri ; George Engroff ; Lauren Lucas

Important disclosures regarding companies that are the subject of this report are available by calling +1 (877) 291-2683. The same important disclosures, with the exception of valuation methodology and risk discussions, are also available on Credit Suisse’s disclosure website at https://rave.credit-suisse.com/disclosures . For valuation methodology and risks associated with any recommendation, price target, or rating referenced in this report, please refer to the disclosures section of the most recent report regarding the subject company.

This report is produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division. For more information on our structure, please use the following link: https://www.credit-suisse.com/who-we-are This report may contain material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates.The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of the analysts who prepared them and CS is under no obligation to ensure that such other communications are brought to the attention of any recipient of this report. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or CS may be the only market maker in such investments. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by CS and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or CS's website shall be at your own risk.

This report is issued and distributed in European Union (except Germany and Spain): by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority; Spain: Credit Suisse Securities, Sociedad de Valores, S.A. (“CSSSV”) regulated by the Comision Nacional del Mercado de Valores; Germany: Credit Suisse (Deutschland) Aktiengesellschaft regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). United States: Credit Suisse Securities (USA) LLC; Canada: Credit Suisse Securities (Canada), Inc.; Switzerland: Credit Suisse AG; Brazil: Banco de Investimentos Credit Suisse (Brasil) S.A or its affiliates; Mexico: Banco Credit Suisse (México), S.A., Institución de Banca Múltiple, Grupo Financiero Credit Suisse (México) and Casa de Bolsa Credit Suisse (México), S.A. de C.V., Grupo Financiero Credit Suisse (México) ("Credit Suisse Mexico"). This document has been prepared for information purposes only and is exclusively distributed in Mexico to Institutional Investors. Credit Suisse Mexico is not responsible for any onward distribution of this report to non-institutional investors by any third party. The authors of this report have not received payment or compensation from any entity or company other than from the relevant Credit Suisse Group company employing them; Japan: by Credit Suisse Securities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau ( Kinsho) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association, Type II Financial Instruments Firms Association; Hong Kong: Credit Suisse (Hong Kong) Limited; Australia: Credit Suisse Equities (Australia) Limited; Thailand: Credit Suisse Securities (Thailand) Limited, regulated by the Office of the Securities and Exchange Commission, Thailand, having registered address at 990 Abdulrahim Place, 27th Floor, Unit 2701, Rama IV Road, Silom, Bangrak, Bangkok10500, Thailand, Tel. +66 2614 6000; Malaysia: Credit Suisse Securities (Malaysia) Sdn Bhd; Singapore: Credit Suisse AG, Singapore Branch; India: Credit Suisse Securities (India) Private Limited (CIN no.U67120MH1996PTC104392) regulated by the Securities and Exchange Board of India as Research Analyst (registration no. INH 000001030) and as Stock Broker (registration no. INZ000248233), having registered address at 9th Floor, Ceejay House, Dr.A.B. Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777; South Korea: Credit Suisse Securities

(Europe) Limited, Seoul Branch; Taiwan: Credit Suisse AG Taipei Securities Branch; Indonesia: PT Credit Suisse Sekuritas Indonesia; Philippines:Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above. Additional Regional Disclaimers Australia: Credit Suisse Securities (Europe) Limited ("CSSEL") and Credit Suisse International ("CSI") are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority ("FCA") and the Prudential Regulation Authority under UK laws, which differ from Australian Laws. CSSEL and CSI do not hold an Australian Financial Services Licence ("AFSL") and are exempt from the requirement to hold an AFSL under the Corporations Act (Cth) 2001 ("Corporations Act") in respect of the financial services provided to Australian wholesale clients (within the meaning of section 761G of the Corporations Act) (hereinafter referred to as “Financial Services”). This material is not for distribution to retail clients and is directed exclusively at Credit Suisse's professional clients and eligible counterparties as defined by the FCA, and wholesale clients as defined under section 761G of the Corporations Act. Credit Suisse (Hong Kong) Limited ("CSHK") is licensed and regulated by the Securities and Futures Commission of Hong Kong under the laws of Hong Kong, which differ from Australian laws. CSHKL does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. Investment banking services in the United States are provided by Credit Suisse Securities (USA) LLC, an affiliate of Credit Suisse Group. CSSU is regulated by the United States Securities and Exchange Commission under United States laws, which differ from Australian laws. CSSU does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. Credit Suisse Asset Management LLC (CSAM) is authorised by the Securities and Exchange Commission under US laws, which differ from Australian laws. CSAM does not hold an AFSL and is exempt from the requirement to hold an AFSL under the Corporations Act in respect of providing Financial Services. This material is provided solely to Institutional Accounts (as defined in the FINRA rules) who are Eligible Contract Participants (as defined in the US Commodity Exchange Act). Credit Suisse Equities (Australia) Limited (ABN 35 068 232 708) ("CSEAL") is an AFSL holder in Australia (AFSL 237237). Malaysia: Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia) Sdn Bhd, to whom they should direct any queries on +603 2723 2020. Singapore: This report has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (each as defined under the Financial Advisers Regulations) only, and is also distributed by Credit Suisse AG, Singapore Branch to overseas investors (as defined under the Financial Advisers Regulations). Credit Suisse AG, Singapore Branch may distribute reports produced by its foreign entities or affiliates pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Singapore recipients should contact Credit Suisse AG, Singapore Branch at +65-6212-2000 for matters arising from, or in connection with, this report. By virtue of your status as an institutional investor, accredited investor, expert investor or overseas investor, Credit Suisse AG, Singapore Branch is exempted from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of Singapore (the “FAA”), the Financial Advisers Regulations and the relevant Notices and Guidelines issued thereunder, in respect of any financial advisory service which Credit Suisse AG, Singapore Branch may provide to you. EU: This report has been produced by subsidiaries and affiliates of Credit Suisse operating under its Global Markets Division In jurisdictions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. This material is issued and distributed in the U.S. by CSSU, a member of NYSE, FINRA, SIPC and the NFA, and CSSU accepts responsibility for its contents. Clients should contact analysts and execute transactions through a Credit Suisse subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to the municipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the officials,management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with their financial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for the purpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide investment advisory services to or on behalf of the municipality. If this report is being distributed by a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities mentioned in this report or require further information. This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising from their use of this report or its content. No information or communication provided herein or otherwise is intended to be, or should be construed as, a recommendation within the meaning of the US Department of Labor’s final regulation defining "investment advice" for purposes of the Employee Retirement Income Security Act of 1974, as amended and Section 4975 of the Internal Revenue Code of 1986, as amended, and the information provided herein is intended to be general information, and should not be construed as, providing investment advice (impartial or otherwise). Copyright © 2021 CREDIT SUISSE AG and/or its affiliates. All rights reserved. When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

2021 mid-year outlook the cloud has four walls 8 april

Documents