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Equinix Meets Demand with AcquisitionBy Justin Lee, theWHIR.com
July 5 2007 -- (WEB HOST INDUSTRY REVIEW) -- The past year has seen a significant rise in demand in the European data center market. A recent Tier 1 Research (tier1research.com) study revealed that global demand has outpaced supply by nearly three to one over the last 12 months, with European supply and demand reaching a ratio of more than six to one.
Hoping to seize on this demand, data center operator Equinix (equinix.com) announced last week that it will acquire European colocation service provider IXEurope (ixeurope.com).
Since 2006, Equinix has invested more than $450 million in its US and Asia-Pacific expansion program. And after carefully planning out its European transition, the company has finally answered customer requests that it expand its solutions into the European market.
"We've seen customers asking us to go to Europe and provide global solutions," says Margie Backaus, Equinix chief business officer. "[It?s important to find] the right partner at the right evaluation, and we believe we've found that with IXEurope. Their reach, their management team, the culture, the cities they're in ? all of those things contributed in them making the right partner for us."
Equinix will integrate IXEurope's network-neutral data center business and operations under the Equinix brand, which includes 14 data centers. The IXEurope facilities include more than 380,000 square feet of net sellable space throughout, Europe in such cities as London, Zurich, Frankfurt, Munich, Paris, Dusseldorf and Geneva.
"The two companies share a similar customer base," says Backaus. "IXEurope has 47 percent of their customers coming from enterprise, Equinix today has 45 percent coming from enterprise. We both share very good strengths, specifically in places like the financial market."
The acquisition, which Backaus expects to be completed in mid-September, will bring Equinix's total footprint to more than 3 million square feet of data center space across 17 markets in the US, Europe and Asia-Pacific.
Most importantly, the acquisition allows Equinix to immediately expand into the European market, providing Equinix customers with a single-source global solution for their data center and network connectivity services. Equinix's European regional headquarters will be located in London, England.
And while Europe may be a somewhat different market with multiple network-neutral players in competition, the acquisition will offer Equinix a variety of benefits as it builds upon its market leadership in the US and Asia-Pacific.
"The biggest benefit is that it gives us immediate reach into what we feel is one of the fastest growing markets in the world," says Backaus. "Just in terms of the partnership this brings from the growth perspective, financially, is very beneficial to us. The team there is very good."
The current IXEurope management team, comprised of CEO Guy Willner and COO Christophe de Buchet, will join Equinix and continue to operate the European business. The two companies will also create an integration team comprised of senior managers to ensure a seamless integration.
"This intention to acquire IXEurope is very much about growth and revenue," says Backaus. "It's not about cost-cutting or any of those things. It's all about bringing two companies together to maximize growth potential."
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