Verizon has completed the long-expected sale of its data centers, announcing today a $3.6 billion deal with Equinix.
The deal helps Equinix Inc. (Nasdaq: EQIX) continue to expand its data center footprint, adding 29 data centers in 24 sites spread among 15 major markets that include Atlanta, Bogotá, Boston, Chicago, Culpeper, Va., Dallas, Denver, Houston, Los Angeles, Miami, New York, São Paulo, Seattle, Silicon Valley and the Washington, DC area. And it helps Verizon Communications Inc. (NYSE: VZ)'s bottom line after some major acquisitions spending, while shedding an asset that has become non-strategic.
Verizon will continue to provide managed hosting and cloud services, the company noted, but doesn't need to operate its own data center real estate to do that. Operating data centers is increasingly seen by US telecom operators as a commodity IT and real estate process best managed at scale by experts -- AT&T, CenturyLink and Windstream have all either sold off their data centers or, in AT&T's case, outsourced much of the work.
In the process, Equinix gains valuable square footage in established markets as well as three new markets -- Bogotá in Colombia, Culpeper, Va., and Houston -- according to a letter to customers from Equinix CEO and President Steve Smith. The data centers are also prime interconnection spots and that is a major requirement for data center assets today, in order to support connectivity to multiple cloud services and to enable hybrid cloud connections.
The Miami Network Access Point will serve as a major hub and gateway point for the Equinix facilities in Latin America, the company said in a statement, positioning the company to grow there. Equinix also expects to expand its sales into government, based on the highly secure campus at Culpeper.
The transaction is expected to close in mid-2017, according to the two companies. It will shift about 250 Verizon employees onto the Equinix payroll.
— Carol Wilson, Editor-at-Large, Light Reading