More and more IT and telco providers are concluding that owning datacentres is too much of a headache to endure, with Verizon and CenturyLink the latest to make divestments in this area.
Verizon this week completed the sale of 29 datacentres to Equinix for $3.6bn in a deal involving the transfer of 250 staff.
On the same day, CenturyLink closed the sale of its datacentre and colocation business, which has 700 staff, to a consortium of private equity investors.
The divestment underlines the fact IT and telco providers are scrambling to offload the datacentre assets they were only five years ago intent on building, according to Philip Carse, principal analyst at Megabuyte.
IO and Vancis are among the other providers that have divested datacentre assets this year - to Equnix and Interxion, respectively - in order to release capital into their businesses, Carse explained.
"The fact both deals closed on the same day nicely illustrates that these two firms - which are both telcos at heart - decided they are better off releasing capital to invest into things like networks, instead of trying to support datacentres - particularly when there might be companies out there better suited to it," he said.
The divestments mark a U-turn for Verizon and CenturyLink, who both leapt into the datacentre space in 2011 through the acquisitions of Terremark and Savvis, respectively.
"They both decided they needed to be in the whole hosting space, but with it came a lot of datacentres," Carse said. "They've realised that managing datacentres is not their core capability. Effectively it's a property play. They're much better off focusing on services - they will continue to resell co-location and hosting based out of those datacentres, but no longer have to worry about maintaining and investing in the capacity in those datacentres."
UK-based resellers and hosting players are also having to re-assess their datacentre strategies, Carse added.
"If you look at someone like Six Degrees or iomart, they've always historically wanted to own their datacentres, but the DNA of other businesses, like Softcat or Adapt, has been the opposite. But with more and more use of the cloud happening, even companies that own their own datacentres are having to become increasingly technology-agnostic. A customer might want to put a bit of their infrastructure in iomart's datacentre, but they might also want to use AWS or Azure, and those companies are having to realign their businesses."
Colin Brown, managing director of Softcat, had also noticed the trend flagged up by Megabuyte.
"A few years ago, everyone was saying ‘let's build our own datacentre', but now people are realising it's hard work," he said. "We've always been in Telecity, which is now Equinix. Our approach has always been ‘let's get someone else to do that', and now it seems more people are going that way too."
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