Equinix launch $1bn joint venture to secure more European hyperscale colocation spend

Colocation giant Equinix is embarking on a $1bn joint venture with Singapore-based investment fund GIC that will see it directly court the hyperscale market through the creation of a series of tailor-made datacentres in Europe.  

The facilities will be sited on or near to existing Equinix facilities, the pair confirmed in a joint press statement, and will be specifically designed to cater to the “core workload deployment needs” of a targeted group of hyperscale cloud companies.

These include the likes of Amazon Web Services (AWS), Alibaba Cloud, Google Cloud, Microosft Azure and Oracle Cloud Infrastructure, which already rely on Equinix datacentres to provide their respective customers with access to their services.  

However, through its joint venture with GIC, the firm wants to go a step further by providing them with access to supplementary datacentre capacity at its sites in Europe through its xScale datacentre initiative.

“With xScale datacentres, hyperscale companies will now be able to add core deployments at Equinix to their existing access point footprints, enabling their growth on a single platform that spans more than 50 global metros,” the company said, in a statement.

However, Equinix was quick to dispel the idea the move suggests the firm is embarking on a major push into the wholesale colocation market, or expansion beyond its retail roots.

“The xScale datacentres will focus on a targeted group of hyperscale companies that offer significant value to the existing Equinix cloud ecosystem,” the statement added.

The facilities will, Equinix confirmed, be designed to cater to the specific technical, operational and price requirements of the hyperscale community, while paving the way for them to consolidate their colocation requirements with a single provider.

Charles Meyers, president and CEO of Equinix, said the joint venture part of the arrangement should ensure the company has the financial footing needed to capture a bigger slice of the hyperscale market's overall datacentre spend.

“Partnering with a world-class investment partner like GIC will provide the opportunity to make significant capital investments to capture targeted large-footprint deployments, while also continuing to optimise our capital structure,” he said.

Meyers went on to reveal the firm has plans to pursue a similar model in other regions of the world where it operates in due course.“We look forward to launching similar [joint ventures] in other operating regions and believe that these efforts will continue to further differentiate Equinix as the trusted centre of a cloud-first world,” he said.

Analyst reports regularly flag the positive impact the near-insatiable demand from the hyperscale community is having on the health of the European colocation market, which might go so way to explaining why Equinix has picked Europe as the first market to launch its joint venture model in. 

Kelly Morgan, vice-president of datacentre infrastructure and services at analyst house 451 Research, said the agreement has the potential to markedly accelerate the take-up of hybrid and multi-cloud deployments across Europe and beyond.

“By increasing the number of hyperscale facilities in the [Europe, Middle East and Africa] region, the joint venture between Equinix and GIC aims to accelerate the adoption of hybrid and multicloud as the IT architecture of choice by companies throughout the region,” she said.