Digital transformation is driving unprecedented enterprise adoption of hyperscale clouds, and as the world’s digital infrastructure company, we are accelerating our xScale™ data center growth to meet the demand. Over the past two years, Equinix has launched the development and operation of xScale data centers worldwide, representing an investment of $3 billion, and we have even more ambitious plans into the future.
We are investing globally to serve the growing demands of hyperscale companies and to provide cloud service infrastructure everywhere it is needed. To accomplish this, we are announcing agreements to add an additional $3.9 billion joint venture with our partner GIC, Singapore’s sovereign wealth fund, to capture hyperscale demand and deepen cloud density. When closed, this new deal will bring the total xScale data center portfolio to more than $6.9 billion across 32 data centers globally. It is expected that the global xScale portfolio will provide more than 600 megawatts (MW) of power capacity when fully built out.
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xScale expansion in Europe
Hyperscale demand continues to rise in Europe. Cloud and IT service providers (CSPs) and other hyperscalers account for 80% of the data center market demand across the Frankfurt, London, Amsterdam and Paris (FLAP) metros.[i] According to the fourth annual Global Interconnection Index (GXI) projections, enterprise interconnection to cloud and IT providers in Europe will grow annually by 60% between 2019 and 2023. And Frankfurt is the fastest-growing metropolitan area (among FLAP metros) for private interconnection, at an estimated 50% compound annual growth rate (CAGR).
As a result of our first joint venture with GIC on October 9, 2019, six xScale facilities are currently operating or are under development in Europe. Collectively, these sites will have the capacity to deliver approximately 106 megawatts of power to hyperscale customers in Europe once all are operational. These sites include:
- Paris: PA8x (opened in Q1 2019) and PA9x (opened in February 2021)
- London: LD11x (opened in February 2021) and LD13x (opened in Q4 2019)
- Frankfurt: FR9x (expected to open in Q4 2021) and FR11x (expected to open in Q2 2022)
In addition to these sites, the Equinix and GIC deal announced today will expand the European xScale portfolio in the following metros:
- Dublin: three facilities
- Frankfurt: three facilities
- Helsinki: one facility
- Madrid: two facilities
- Milan: one facility
- Paris: two facilities
- Warsaw: one facility
xScale expansion in Asia-Pacific (AP)
The rapid growth of cloud has driven the development of large data centers in both urban and suburban areas of Japan. Specifically, the Tokyo metropolitan area has 55% of the country’s data centers, and the Osaka area has 21%.[ii] According to the GXI, the AP region will have an estimated 49% CAGR for enterprise private interconnection to cloud and IT service providers between 2019 and 2023, with Tokyo anticipated to have a metro interconnection annual growth rate of 48% by 2023.
As part of our second joint venture agreement with GIC announced in April 2020, we opened our first data center in Asia-Pacific in Q1 2021. Located in Tokyo, TY12x serves as a strategic network hub for financial services companies and internet, cloud, content and mobile service providers. Our next Japanese xScale data center is expected to open in Osaka in Q4 2021. In the future, we are planning to open two more xScale data centers in both the Tokyo and Osaka metros to support the growing need for high-end data center space and power in the AP region.
xScale expansion in Latin America (LATAM)
LATAM is another strategic region for hyperscale growth. The GXI predicts that LATAM’s cloud and IT service providers’ private interconnection to enterprises will reach a 74% CAGR by 2023. Brazil hosts the 12th largest economy in the world, and the largest in Latin America, with São Paulo as the epicenter. This country had the highest growth of internet users in South America from 2019 to 2020 in a region that is leading the world in interconnection bandwidth capacity growth.[iii] The GXI estimates that interconnection bandwidth capacity in São Paulo alone will reach a 51% CAGR by 2023.
2021 will see the first Equinix xScale data center in LATAM, scheduled to open in Q3 in São Paulo, the largest economic and industrial center in the Southern Hemisphere. The center will connect to four existing Equinix International Business Exchange™ (IBX®) data centers. Today’s joint venture announcement with GIC will bring an additional two xScale data centers to the metro.
As one of the world’s 15 largest economies and the second largest in LATAM, Mexico remains a bright spot in LATAM’s digital economy. Mexico ranks 38th out of 193 countries in the U.N.’s Online Service Index (OSI).[iv] The GXI estimates that the interconnection bandwidth capacity of Mexico City will reach a 53% CAGR by 2023. This reflects the high demand for interconnection in the region within the content and media and manufacturing industries. Mexico City is expected to be the site of one xScale data center as a part of today’s announcement with GIC.
The customer is at the center of xScale growth
With these hyperscale expansions, our focus remains on the customer. The new xScale data centers are strategically located in proximity to rich digital and business ecosystems within our metro IBX data centers to serve cloud-strategic enterprise customers. xScale data centers enable hyperscale companies to add core deployments to their existing access-point footprints at Equinix. On a single platform, companies can immediately span 63 global metros and offer direct interconnection to their customers and strategic business partners.
In addition to providing large amounts of space and power in these growing metro locations, our xScale data centers will also act as the cornerstones for our expanding cloud ecosystem of more than 2,950 cloud and IT service providers. Platform Equinix® features more than 40% of the private on-ramps to the top global cloud service providers—more than any other provider. This enables hyperscalers to interconnect securely with 10,000 businesses on Platform Equinix via Equinix Fabric™ software-defined interconnection, meeting the growing demand for hybrid multicloud architectures.
Hyperscale providers can benefit from our commitment to using 100% clean and renewable energy across the Equinix global platform, which has resulted in significant increases in renewable energy coverage globally. We’ve continued to make advancements in the way we design, build and operate our data centers with high energy-efficiency standards, and we are targeting to have all Equinix xScale data centers to be LEED certified (or the equivalent regional certification).
Equinix has been building out data center infrastructure for CSPs and their partner networks and customers for more than 20 years. This new investment in global expansion will bring even more value to our customers. And in recognition of the innovation that Equinix brings to the hyperscale industry, we received the 2021 Datacloud Global Award for the Data Center Provider of the Year by BroadGroup™ for our xScale data centers!
The joint venture projects in today’s announcement are expected to close in several waves over the course of 2021, pending regulatory approval and other closing conditions, under the same terms as the previous agreements. In addition to the facilities mentioned above, we expect to announce three additional sites at a future date.
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[i] CBRE, “Q4 2020 Europe’s Data Centres: Frankfurt, London, Amsterdam and Paris,” 2021
[ii] CBRE, “Japan’s Edge Data Centres: Solution to Last Mile Connectivity,” 2019.
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