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Cloud Strategies

Colocation Market Shows Strong M&A Activity

If one word describes the M&A activity in the current colocation center market, it could be robust, with a number of companies actively acquiring, or partnering with others, to expand their colocation portfolios.

That consolidation activity, which is one of the key topics explored in a new report, "Colocation Looks Enticing to Enterprises Weary of IT Woes," looks likely to weed out the less successful players and identify the survivors.

A case in point is Cologix. At first glance, it might not seem like two colocation centers in Jacksonville, F, would attract much attention. But to understand why Cologix acquired not one but two colocation facilities there during the past two years, it's important to understand not so much about the city, but its international connections.

Submarine cable systems PCCS and AMX-1 both land in Jacksonville and offer, in turn, connectivity to 19 landing points across ten countries throughout Central and South America. Those cables are expected to drive tremendous growth. These systems open a unique expressway to exchange content, managed services and network services between the continents versus the alternative highly trafficked, legacy systems in southern Florida. More about the acquisitions can be found in the report.

Likewise, Equinix has been on an acquisition strategy to build its portfolio internationally. Over the past several years, the company has acquired carrier hotels, data centers and colocation centers in Frankfurt, Brazil, Los Angeles, Tokyo, Dubai and more as it continues to build what it describes as a "seamless experience for customers" in its global footprint. Additional details on Equinix's strategy also can be found in the report.

Without question, the M&A activity within the colocation market will eventually begin to recede and will result in the market maturing to the point that far fewer small players exist. For the foreseeable future, however, there are several smaller companies up for grabs.

This, and other topics, are covered in the latest Heavy Reading Insider, "Colocation Looks Enticing to Enterprises Weary of IT Woes." This report examines the market for colocation centers, analyzing attributes of colocation centers, the impact of virtualization on colocation, strongest drivers in the market and challenges the industry faces. It also includes a comparative breakdown of colocation centers, examines the geographic landscape of the market and details trends that are likely to occur in the industry during the next 18-24 months.

— Denise Culver, Research Analyst, Heavy Reading Insider


The report, Colocation Looks Enticing to Enterprises Weary of IT Woes, a 17-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at $1,595. This report is available for $900. To subscribe, please visit: www.heavyreading.com/insider.

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