The speed of technology innovation and the growing global footprint of businesses are two factors driving service providers' desire to offload their datacentres, according to Equinix EMEA president Eric Schwartz.
The trend of service providers owning their own datacentres has recently started to reverse, with Verizon and CenturyLink two of the larger firms to sell their own facilities in favour of buying services from a third party.
Datacentre provider Equinix snapped up Verizon's 29 facilities for $3.6bn (£2.8bn), adding to the $145m project it announced earlier this year across London, Paris, and Sydney.
In the UK, Equinix acquired Telecity for £2.6bn last year and announced plans to invest £26m in its LD6 flagship datacentre.
Equinix's EMEA president Eric Schwartz explained to CRN that the exodus of providers from the datacentre space is being driven by a number of factors including changes in consumer spending, the growing cost of maintaining datacentres, and increased scrutiny on compliance.
"The world for enterprise IT, including telecoms and managed services, is changing rapidly," he said. "The velocity of cloud, computing uptake, deployment, [and] integration are accelerating at levels that simply weren't the case six years ago, so there's an element of companies needing to decide how they manage that and how they focus their energies on serving a large enterprise customer base.
"I think the capital requirements continue to grow. What might have looked manageable six years ago might not look so manageable now.
"The final piece is [that] the datacentre industry has grown and matured and the valuations are substantially higher, so companies that don't view this as a core business are thinking it's maybe an attractive time to sell."
Equinix currently has over 175 datacentres worldwide and is expected to record revenues of around $4bn in its current financial year.
The firm works directly with customers - major banks, investment houses, and internet search engines - and also cloud providers and service providers.
Schwartz explained that as companies become both more global and more distributed, it becomes increasingly difficult for them to run their systems effectively if they don't have datacentres in all the regions in which they operate.
The two options they have, he said, are to build more datacentres at massive capital expenditure, or utilise the services that providers such as Equinix offer on a subscription basis.
Around two thirds of Equinix's revenue currently comes from customers that are distributed globally.
"Our customers are increasingly global and those applications and services need to be distributed around the world," he said.
"If the choice is between building their own facility in London or coming to Equinix in London, that's one trade off, but if you're operating something where you've got a global customer base you'll probably need a couple of sites in Europe, a couple of sites in Asia, a couple of sites in North America…
"The world is moving too fast to say 'I'm just going to go around the world and find 10 sites in 10 different countries and build them myself from scratch'. The alternative that we and others offer allows that to be done much faster and usually at lower cost. That's become the model."
Aside from the datacentres themselves, the other key offering from Equinix is its interconnection services, which allow customers and providers to connect directly with each other within Equinix datacentres, rather than over the internet.
Cloud providers such as Amazon Web Services, Microsoft Azure, and Google allow their own customers to connect directly with them in Equinix facilities, providing better connection speeds and performance.
"There is an interconnection element to what those cloud providers are doing in that as they grow their customer base and the customer base migrates more workloads to these players, the value of being able to connect directly becomes more valuable, more necessary and more common," said Schwartz.
"As fast as they're growing, it's also contributing to growth in our facilities where people are looking to connect directly to them - companies such as AWS and Microsoft Azure have a presence in our facility so customers can connect to them directly.
"There are a number of reasons why things work well in cloud, but there are also reasons why things won't work in the cloud. This is where it is ideal to have it partly in the cloud and partly out of the cloud, so hybrid.
"We're optimised to do exactly that and, because large cloud providers will put connection points in a number of our facilities, when customers come to us and say they want to keep a portion of it private, we can do that, and then if they need to connect as efficiently as possible to the clouds to optimise their applications, they can do that."
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