Digital Realty acquisition of Interxion to reshape data-center landscape

Digital Realty acquisition of Interxion to reshape data-center landscape

Digital Realty Trust, one of the largest data center operators in the U.S., has agreed to acquire European data center provider Interxion for $8.4 billion. The deal will put DRT ahead of Equinix in terms of size and give the San Francisco company a massive move into Europe as well as the Middle East and Asia

The deal is strategic and complementary. DRT has about 200 data centers, mostly in the U.S but with some foreign locations as well. Interxion is a major European player, with 53 data centers in 13 of the biggest European markets, including London, Paris, Frankfurt, and Amsterdam.

More importantly, Interxion has numerous submarine cables linking Europe to Africa, the Middle East, and Asia. It has been focused on building interconnections by placing data centers in key markets where companies can link their networks to each other, and selling colocation space in those facilities.

That’s been Equinix’s strategy from the get-go, and Equinix has built a lead in this space. Customers use Equinix as their connectivity provider instead of acquiring it on their own. (See related story, Colocation facilities buck the cloud-data-center trend)

DRT didn’t really get into the interconnection business until 2015, when it acquired Telx. That gave it a boost in the U.S. but not the rest of the world.

“This strategic and complementary transaction builds upon Digital Realty’s established foundation of serving market demand for colocation, scale and hyperscale requirements in the Americas, EMEA and Asia Pacific and leverages Interxion’s European colocation and interconnection expertise, enhancing the combined company’s capabilities to enable customers to solve for the full spectrum of data center requirements across a global platform,” said Digital Realty CEO A. William Stein in a statement.

Interxion’s well-established business relationships will give DRT a huge boost in Europe, Middle East, and Africa. Likewise, DRT touts its relationships with leading cloud platform operators and global enterprises as an opportunity to extend its value proposition to a global customer base.

“The combination of Digital Realty with Interxion adds interconnection-rich sites in Europe to Digital’s global platform,” said Kelly Morgan, senior vice president for systems at 451 Research, in an email comment to Network World.

“Interxion will become the retail colocation brand for Digital Realty in EMEA, with Digital planning to maintain Interxion’s brand and operations in Europe while adding a global sales team that can cross-sell a broad portfolio of both wholesale and retail datacentre services. Interxion customers gain access to locations outside of Europe and wholesale datacentre options, while Digital Realty customers gain access to densely connected sites in additional markets in Europe,” Morgan said.