NYI Buys Chicago Data Center As M&A Market Roars On

New York Internet’s acquisition of the data center is just another drop in the ocean in terms of data center M&A in 2019.


The data center M&A market continued its frenzied pace as colocation and hybrid IT provider New York Internet (NYI) acquired a new data center in Chicago from RDX to expand its U.S. footprint.

“We’re thrilled to enter the Chicago market and are ready to hit the ground running,” said NYI Co-Founder and COO Phillip Koblence in a statement. “The facility has incredible underlying fiber density and a strategic location that will give our clients maximum flexibility in terms of connectivity. We will also layer on our high-touch hybrid solutions and our cost-effective cross-connects to provide a compelling and comprehensive offering.”

New York City-based NYI provides hybrid solutions across cloud, colocation and containers on bare metal, with software-defined networking enabled connectivity to the cloud.

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NYI said the new Chicago data center is poised to address edge and Internet of Things requirements and already serves a number of customers in the finance and telecommunications verticals. The company aims to differentiate itself by offering a deeper level of partnership and service than typical colocations providers by providing a full suite of professional and managed services.

Cloud and application managed service provider RDX recently completed its acquisition of Andover, Mass.-based Navisite and is selling off some of its data centers, including the Chicago facility.

M&A in the data center space is on fire this year and is expected to break all previous records in terms of the shear amount of acquisitions.

A whopping 52 data center-oriented acquisitions closed in the first half of 2019, up 18 percent year over year, setting up 2019 to become a record year in terms of acquisitions. Earlier this month, Macquarie Infrastructure Partners IV acquired Neutrality Data Centers which owns six data centers in major U.S. cities.

The fast pace is due to enterprises shifting workloads to cloud providers or using co-location facilities to house their IT infrastructure, leading to co-location providers buying facilities to grow their footprint to better serve both enterprises and cloud providers.

Another trend in the data center market is that all of the hyper-scale data center operators in China reduced their spending the second quarter of 2019, leading to the second consecutive quarter of worldwide data center capex decline. Global hyper-scale operator capex in the quarter hit $28 billion, down 2 percent year over year, while China spending was down a whopping 37 percent year over year.