As NTT preps new DC facilities, EQT snaps up EdgeConneX

• NTT is expanding its data centre coverage
• EdgeConneX is changing hands
• Equinix is also expanding through M&A

As the world’s data centre operators become ever more strategic and powerful, and the cloud services market grows at an impressive pace ( up by 26% last year, according to IDC), it’s interesting to track which companies are seeking to play a pivotal role in enabling the world’s digital economy and there have been some interesting developments during the past few days.

While other telcos have backed away from playing in the multi-tenant data centre market, NTT Ltd.’s Global Data Centre unit, which operates 160 data centres in more than 20 markets, is expanding its coverage as part of a $7 billion investment program. 

This week it announced that capacity and coverage will be expanded in India, the UK, Japan and the US (Oregon and Virginia) before the end of September, in Germany and Malaysia during the fourth quarter, and in Indonesia and the US (Chicago) during the first half of next year.

Full details of the locations and capacity of each facility is available in this announcement.

NTT also highlighted the growing importance of sustainability in its data centre plans. “All our new data centres will be set up for clients to use renewable energy if they choose, as NTT invests in a sustainable future for our planet,” noted Masaaki Moribayashi, Senior Executive Vice President, Services at NTT Ltd. 

[Note: NTT Ltd. is the global, enterprise-focused ICT company created in July 2019 when the Japanese operator combined the operations and workforces of almost 30 business units, including NTT Communications, NTT Security and Dimension Data, to form an outfit with more than 40,000 staff and annual revenues of more than $11 billion. The Global Data Centres business was launched as part of NTT Ltd. in January 2020.]

Meanwhile, in a deal anticipated for almost a year, EdgeConneX is changing hands. The company, which has built more than 40 facilities -- from large, hyperscale builds to small, local points of presence, such as its ‘EdgePop’ in the Prudential Tower in Boston – in 33 markets across North America, Europe and Latin America, is being acquired by private equity firm EQT from Providence Equity Partners. 

Financial details weren’t disclosed but Bloomberg reported a $2.5 billion price tag last October.

EQT is pledging to invest further in EdgeConneX’s expansion. “This partnership represents an exciting opportunity for EQT in a sector and geographies where we have significant experience. EQT looks forward to working with the team in continuing to grow the business and identify new expansion opportunities,” noted Jan Vesely, a Partner at EQT. 

Randy Brouckman, CEO of EdgeConneX, added: “EQT brings significant financial resources and digital infrastructure industry experience which EdgeConneX will use to accelerate growth and invest in new data centres around the world.”

Earlier this month, Equinix, which already has more than 210 facilities in 26 countries, announced a $161 million deal to acquire two data centres in Mumbai from GPX India. 

This looks like a very timely move for a few reasons. First, once the deal closes early next year, it will further expands Equinix’s global reach and give it a footing in an economy that has a lot of business growth potential. 

It’s also a country where the cloud infrastructure market is still in its relative infancy but set to grow quickly in the next few years. According to John Dinsdale, Chief Analyst & Research Director at Synergy Research Group, “The data center market in India is expected to exceed US$1 billion in 2020 and grow at 12% compound annual growth rate (CAGR) from 2019-2024, the third highest rate in the world. Our forecasts show that the country will become the seventh largest data center market in the world in 2021."

In addition, there is now significant effort being put behind the digitalization of the country, with companies such as Jio Platforms ploughing significant resources into the connectivity infrastructure, attracting investors and brokering partnerships that will enable India’s digital economy to grow at an accelerated pace. 

- Ray Le Maistre, Editorial Director, TelecomTV