Wednesday, October 18, 2017


Equinix, Digital Realty cement global data centre dominance with multi-billion Dollar acquisitions



Aggressive growth of hyperscale data centre operators is also driving business not only to the top two providers but others in the industry.

The strong M&A activity sweeping the industry has seen Equinix strengthen its position as the world’s largest colocation provider with a market share of 11% in Q1 2017.

The Redwood City-based operator is followed by Digital Realty, with a market share of 7%, according to data from Synergy Research Group.

Equinix announced in December 2016 its intention to acquire 29 data centres from Verizon, in a transaction worth $3.6bn.

In June 2017, was Digital Realty’s turn to invest in expanding its footprint with one of the largest M&As in the data centre industry’s history. The company acquired DuPont Fabros Technology for a total amount of $7.8bn.

Both transactions were used to acquire assets mostly based in the US, which analysts expect to substantially increase both operators’ revenues in the North American market.

Researchers at Synergy Research Group pointed that had the two major M&A deals carried out by the two providers been effective from the beginning of the year, Equinix worldwide market share in Q1 would have been 13% and Digital Realty 9%.

Across the two major market segments – retail colocation and wholesale – Equinix/Verizon would have had a 17% share of retail colocation, while Digital Realty/DuPont Fabros would have had a 31% share of the smaller wholesale segment.

Behind Digital Realty, in third place is NTT with 6% of global revenues, followed by KDDI/Telehouse with 3% and a group of operators that each has a 2% share, including China Telecom, CenturyLink (now Cyxtera), CyrusOne, Global Switch and Interxion.

The data has found substantial growth across all markets, however, it was in the APAC region the highest growth rate occurred.

The major countries with the highest growth rates were all in the APAC region and include China, Hong Kong, Japan and Australia.

Across the major regions, Equinix was the leader in EMEA, ranked second in North America and third in APAC. Digital Realty was the leader in North America and NTT the leader in APAC.

John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group, said: “The aggressive growth of hyperscale data centre operators and other cloud and hosting companies is helping to drive demand for data centre footprint across all regions, while many enterprise customers require their data centre operators to span multiple metros and countries.

“These fundamental market drivers mean that colocation is increasingly a market where scale and geographic scope determines success. There has been a lot of consolidation in the data centre industry already in 2017, but these two deals stand out.

“Equinix and Digital Realty were already growing much more rapidly than the overall market, and these deals will help them to further distance themselves from the competition.”