In just the last week, Equinix has closed two deals in two EMEA locations separated by 2,000+ miles. But both deals illustrate our commitment to a single strategy that’s long driven Equinix: steady, careful expansion ahead of demand for Interconnection, which digital business is increasingly realizing it can’t do without.
Today we closed the purchase of Itconic, giving us our first data centers in Spain and Portugal. This entry into the Iberian Peninsula gives us a new presence in Western Europe via two of its most important economies.
And on Oct. 6, we acquired the Zenium data center business in Istanbul. This is our second data center in Turkey, and it aims to help our local, regional and multinational customers grow in this increasingly important colocation and Interconnection market.
Istanbul is a bridge between Europe and Asia and even opens routes to Africa. Equinix’s global footprint isn’t just larger than it was last week, it’s also richer and more flexible.
Our acquisition of Itconic, a leading regional data center, connectivity and cloud infrastructure solutions provider, spans five data centers in four metros, including Madrid (2), Barcelona (1), Seville (1) and Lisbon (1).
The deal adds 322,000 square feet to our global digital ecosystems, and includes 400 customers. Those customers consist of 100+ networks and a range of leading enterprises, such as L’Oreal, Vueling, Deloitte and Real Madrid. The data centers are also home to more than 90 cloud and IT service providers – AWS, Microsoft Azure and Google Cloud among them.
The Itconic acquisition positions Equinix to support the data traffic growth between Europe, Latin America and Africa that’s being propelled by new subsea cable systems. The Lisbon data center, for instance, is connected to subsea systems including the African Coast to Europe (ACE) system and the West Africa Cable System (WACS).
The Itconic facilities are already active in a globally relevant interconnection hub, and a geographically important region for Equinix.
The Zenium data center we acquired in Istanbul, to be renamed IS2, gives us an additional 16,000 square feet of colocation space, with the ability to eventually offer more than 129,000 square feet. That’s substantial room to grow in a market we think has big growth potential for several reasons:
- The regional Interconnection market is underdeveloped. Turkey has a large population (80 million) and economy ($857.7 billion GDP), but compared to other nations of similar size, it has a small market for Interconnection, defined as private data exchange between businesses. This is an opportunity to drive the market for Interconnection in Istanbul and the surrounding region.
- This is a strategic location. The Bosphorus strait in northwestern Turkey near Istanbul forms an important part of the boundary between Europe and Asia, making the city a bridge between both continents. As a result, there is significant data traffic going through Turkey and Istanbul, and this deal positions us to facilitate growth and Interconnection there.
- It’s fertile ground for cloud. Cloud deployment in Turkey lags the U.S. and Western Europe, but there are signs that it’s starting to pick up, as indicated by a projection from Technavio of a 37% compound annual growth rate (CAGR) in Turkey’s cloud market between 2014 and 2019. This acquisition prepares us to support future cloud adoption.
The region’s cloud promise, and the Global Interconnection Index
More evidence of the promise of cloud in Turkey and the broader region is found in the Global Interconnection Index, a market study we recently published. The Index projects that connecting to cloud will be the second-most important driver of Interconnection for the enterprise in EMEA. Specifically, the Index projects that 132 terabits per second in Interconnection Bandwidth capacity could be dedicated to interconnecting to cloud and IT providers in EMEA by 2020, after growing at a blistering 165% CAGR starting in 2016.
And as noted above, Itconic is home to a healthy cloud digital ecosystem that includes many of the world’s leading public cloud providers. With this in mind, we’ve set up a pilot in our existing Istanbul data center (IS1) for interconnecting to Amazon Web Services via the Equinix Cloud Exchange for our customers, and interest has been extremely strong.
Of course, it’s not just cloud that’s driving Interconnection demand in EMEA. The Index indicates connecting to network, financial services and content providers will be big factors behind increasing Interconnection Bandwidth capacity in EMEA to 2020. The time looks ripe for a large Interconnection expansion in EMEA. The Itconic and Zenium acquisitions each enhance our ability to support it.
To read more about Interconnection in EMEA and globally, please check out the Global Interconnection Index.