M&A, take privates, next-generation hyperscale, earnings, product development
It was a busy week across the sector highlighted by M&A, more movement in the hyperscale game, earnings season and expansion activity aimed at moving traffic and taking it from the edge to core.
The list of publicly traded data centre operators continues to shrink and the latest to go will be Switch, based in Nevada. DigitalBridge will acquire Switch and take it private in a deal worth around $11b. DigitalBridge also acquired a stake in Australian edge data centre operator Leading Edge Data Centres. In other M&A developments, LightEdge acquired San Diego’s NFINIT, Unitas Global picked up INAP’s legacy connectivity business and Rackspace revealed that it recently received acquisition interest.
The aggressive acquisitions of data centre platforms by infrastructure-oriented investors is all about the increasingly long-term operational requirements and outlook for the business. The shifts in the game are creating the need for more flexibility in operating models and procurement strategies. Quantum Loophole is playing in this area and brought on its first major customer – Aligned Data Centers – for its Fredrick, Maryland campus, while Evoque is moving into the hyperscale game as well with a new BTS portfolio.
Earnings season continues to give us insights into the sector’s direction and we look at the results coming from data centre and interconnection bellwether Equinix and cloud and hosting bellwether Rackspace. Equinix continues to grow at a steady pace and is seeing uptake in add-on infrastructure services, while Rackspace has seem some slowing growth of late, but continues to move in a positive direction.
The developments around Quantum, Evoque, Switch, INAP and Rackspace speak to the changing nature of the Internet infrastructure game. There is progressively more separation between legacy and next-generation services and operators continue to shed non-strategic assets and pivot to new areas of focus. Sometimes this will mean pursuing a very different operating mode that simply does not align with what was built before.
Finally, we saw more product developments in cloud and hosting. VMware is helping its service provider partners build sovereign cloud offerings, Lemongrass enhanced its capabilities around migration to cloud-based SAP platforms and Zenlayer integrated with AWS CloudFront.
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