Digital Realty sets sights on loosening Equinix’s grip on global colocation market

Digital Realty claims its newly expanded datacentre capacity and service portfolio marks it out as the only true challenger to Equinix’s dominance in the global colocation market.

The past 12 months have seen the company embark on a number of measures to redefine its value proposition, in response to the ongoing consolidation within the global colocation market, and expand its worldwide datacentre footprint.

As such, the company acquired eight datacentres from long-term rival Equinix, which was instructed to divest them on anti-competitive grounds by the European Commission to ensure its bid to acquire TelecityGroup would get the green light.

Adding these facilities to its datacentre portfolio has paved the way for Digital Realty to expand into the Amsterdam and Frankfurt markets, and make a start on the global roll-out of its cloud interconnection platform, Service Exchange.

The platform, announced in September 2016, will give Digital Realty customers a means of directly connecting to the public cloud services of Amazon Web Services (AWS), Google and Microsoft, as well as those offered by its telecommunication partners.

The final quarter of 2016 has seen the firm concentrate on rolling out the platform to its US datacentres, with a view to bringing it to London, Amsterdam and Dublin by the middle of next year.  

Rob Coupland, managing director for Europe, Middle East and Africa (EMEA) at Digital Realty, joined the company in September 2016 from TelecityGroup via the Equinix datacentre divestiture deal.

Speaking to Computer Weekly, he described the changes at Digital Realty in recent months as having a transformative effect on its business.

“Digital Realty has been around for a very long time, and we’ve been on the ground in Europe for a good 10 years now, but we’ve tended to be known as a property company and as a landlord,” he said.

The acquisition of the eight Equinix/TelecityGroup datacentres has been instrumental in changing that, both from a technical and staffing perspective, as it has brought new people into Digital Realty with experience in selling cloud services, said Coupland.

“We’re able to have a very different conversation with enterprises than we could two years ago, when it was very much a landlord-tenant conversation, whereas now it’s much more about where best to run their mission-critical workloads and we can help them with that,” he said.

“What you have in Digital Realty is people who know how to optimise a property portfolio and drive good returns out of that, now combined with the skills of people who know how to operate a service-based business focused on supporting mission-critical deployments across highly connected platforms.”

The colocation market has been a hotbed of merger and acquisition activity over the past 18 months, which has served to shake up the competitive landscape across Europe, which Digital Realty is now well placed to take advantage of, said Coupland.

“If you think about how the market has shifted over 2016, following the exit of a big European competitor [Telecity] from the market, you can also see Digital Realty emerge at the end of this year as the only real global challenger against what Equinix is,” he said. “From a datacentre footprint and capability perspective, we are uniquely placed in the market to go up against them.

“We’re now a top three provider offering our services to four of the biggest datacentre markets [Dublin, London, Frankfurt and Amsterdam] in Europe and we’re going to be a force to be reckoned with from 2017 onwards.”