As the President of Equinix Europe, Eric Schwartz has been on the front lines of our Telecity acquisition from the start. Eric spoke to us from Amsterdam about why the deal happened, why it matters and what’s ahead.
Why was it critical for Equinix to acquire Telecity?
Our industry is growing and evolving rapidly, driven very much by the dynamics of cloud. We are benefitting from that on the one hand, but we can also see a bigger, more complicated future ahead. So when Telecity was put in play, we did our due diligence and concluded that this very successful company, with its very good reputation, would be additive to our existing strategy and positioning. First, it expands our position in the core markets and our relationships with cloud providers, small and large. Second, it brings us to new markets that our customers have been requesting over the years, and finally, they have an interesting base of enterprise customers who are as much in the thick of the IT transformation and cloud adoption as anyone, which we think will position us to do more creative things with customers in this space. Ultimately we saw an opportunity to make ourselves more robust as a company and more valuable to customers, and we went for it.
How does this deal amplify Equinix’s strengths for customers, especially in the context of increasing interconnection demand?
With this acquisition, we become the leading interconnection company in Europe. The ability to offer a consistent, broad and leading interconnection platform across major markets in Europe is a great position for us. One of the things that Equinix does well is invest energy and resources in working with our customers to expand interconnection and the value they get from it. This transaction basically takes that umbrella of resources and capabilities and extends it Telecity. Together we are able to put a global set of resources against interconnection in a way that we couldn’t separately.
Does this acquisition set up more expansion for Equinix?
There are two different concepts there, acquisition and expansion. First, from an expansion standpoint, the size of our balance sheet and our ability to access capital means we’re positioned to expand in these new markets and the new locations we’ve acquired with Telecity where there’s demand. Generally, it’s much more effective for us to expand in an existing market then to go to a new market and start from scratch. Second, from an acquisition standpoint, do we buy more companies, do more deals like this? The priority at the moment is to make sure we integrate Telecity and Bit-isle (the Japanese data center company acquired last year) in a way that’s effective for customers and for us. That takes precedence.
An acquisition of this size shows confidence as a company. What exactly is Equinix confident in?
Well, we’re confident in the market, the value of interconnection and the future growth potential of our company and Telecity in those markets. And we invested a lot in developing a team in Europe and a service delivery platform, in ECO (Equinix Customer One), and other things, that can scale. So it had a lot to do with confidence in the capability of the team and in the company’s infrastructure. And the final thing, and maybe the one point to stress, is that we’re confident in our culture and also in their culture. This is going to be a big, challenging project. However, the culture of Equinix, the magic, is actually very consistent with the culture in Telecity. This was also a vote of confidence that the two cultures would come together in a successful way.