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Equinix’s Massive $1 Billion Hyper-Scale Data Center Venture Begins

The data center co-location giant completes a $1 billion joint venture to rapidly build hyper-scale data centers, dubbed Equinix xScale data centers, throughout Europe.

Equinix is embarking on a more than $1 billion joint venture to develop hyper-scale data centers throughout Europe as the data center behemoth continues to rapidly expand its global footprint.

The Redwood City, Calif.-based co-location and interconnection giant Wednesday completed the formation of a $1 billion-plus joint venture with partner GIC, Singapore’s sovereign wealth fund, to develop and operate hyper-scale data centers in Europe, which Equinix is calling xScale data centers. xScale data centers provide access to Equinix’s suite of interconnection and edge services that tie into hyper-scale companies such as Amazon Web Services, Microsoft and Google’s existing access points at Equinix, while also increasing the speed of connectivity to customers.

The first six Equinix data centers to be revamped into xScale data centers are located in Amsterdam, Paris, two sites in London and two sites in Frankfurt on some of Equinix’s existing International Business Exchange (IBX) data center campuses.

[Related: Equinix To Acquire Three Axtel Data Centers As Global Expansion Continues]

Equinix President and CEO Charles Meyers said the joint venture with GIC is a milestone that will deepen the company’s relationship with the world’s largest cloud and hyper-scale companies to help them meet the workload deployment needs of today.

“Similarly, as today's businesses are increasingly moving to implement hybrid multi-cloud strategies for their digital infrastructure, Equinix serves as a unique on- and off-ramp to execute that strategy,” said Meyers in a statement.

xScale data centers are engineered to meet the technical and operational requirements as well as price points for core hyper-scale workload deployments. This enables hyper-scale companies to consolidate core and access point deployments into one global provider and streamline and simplify their rapid growth rate, according to Equinix.

Equinix’s xScale data centers specifically target cloud operators including Alibaba, AWS, Microsoft Azure, Google Cloud and Oracle Cloud Infrastructure, which have been rapidly investing in data center expansion over the past few years.

Hyper-scale operator Capex spending on building and equipping data centers hit $28 billion in the second quarter of 2019, up from $26 billion in the first quarter of 2019, led by Amazon, Apple, Google, Facebook and Microsoft. Spending reached record-setting levels in 2018 totaling $120 billion.

Many hyper-scale operators have already partnered with Equinix to leverage its global platform of more than 200 IBX data centers to connect to their business partners and customers.

Equinix CEO Meyers said the joint venture with GIC in Europe won’t be the only initiative in the future to drive the company’s hyper-scale xScale data center strategy.

“We look forward to launching similar [joint ventures] in other operating regions and believe these efforts will continue to further differentiate Equinix as the trusted center of a cloud-first world,” said Meyers.

The data center market is transforming rapidly with the rise of software-defined data center technology and the shift toward the cloud. This is leading to a massive amount of data center M&A, which is being led by Equinix and Digital Realty.

Last week, Equinix unveiled its plans to acquire three data centers in Mexico from Axtel SAB for $175 million in a move to enter the Mexico market for the first time. The deal is slated to be completed in the first quarter of 2020 and will immediately make Equinix one of the largest network-neutral data center operators in Mexico.

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