Equinix has signed a $1 billion joint venture in the form of a limited liability partnership with GIC, Singapore’s sovereign wealth fund, to develop and operate xScale data centres in Europe. The initial facilities in the joint venture will serve the core workload deployment needs of a targeted group of hyperscale companies, including the world’s largest cloud service providers. The facilities, on or proximate to some of Equinix’s existing IBX campuses, will allow these key enablers of digital transformation to streamline their continued growth, while strengthening Equinix’s position in the cloud ecosystem, as enterprises increasingly embrace hybrid multi-cloud as the IT architecture of choice.
For years, hyperscale operators, including Alibaba Cloud, Amazon Web Services, Microsoft Azure, Oracle Cloud Infrastructure and Google Cloud, have partnered with Equinix to leverage its global platform of 200 International Business Exchange (IBX) data centres to directly connect to their strategic business partners and customers. Today, Platform Equinix is claimed to offer the most access points—the “on- and off-ramps to the cloud”— to the top global cloud service providers.
In addition to these customer access points, hyperscale companies are investing in large-scale data centre deployments to accommodate their rapidly growing core workload needs. With xScale data centres, hyperscale companies will now be able to add core deployments at Equinix to their existing access point footprints, enabling their growth on a single platform that spans more than 50 global metros and offers direct interconnection to their customers and strategic business partners.
As hyperscale companies scale their operations at Equinix through xScale data centers and further leverage direct access to the business ecosystems of Equinix’s global platform, the “network effect” will also benefit other companies operating at Equinix, including companies with existing direct connections to hyperscale access points at Equinix. The deployment of core hyperscale infrastructure at Equinix through xScale data centers will serve as a magnet, attracting additional partners, application developers and other hyperscale vendors to Equinix’s ecosystem.
Under the terms of the agreement, GIC will own an 80% equity interest in the joint venture and Equinix will own the remaining 20% equity interest. The joint venture is expected to close in Q3 2019, pending regulatory approval and other closing conditions.
Equinix will sell both its LondonLD10 (retaining part of that business under a lease back) and Paris PA8 IBX data centres and the associated leases, as well as certain other development interests, to the joint venture. A significant portion of London LD10 and ParisPA8 are already leased. Under the terms of this joint venture, additional new xScale data centres are expected to be developed in Amsterdam, Frankfurt (two sites) and London. These initial six facilities, when fully built out, will provide approximately 155 megawatts (MW) of power capacity.
Charles Meyers, President and CEO, Equinix, commenred: “It has been a long journey to reach this point, but we are tremendously excited to announce the formation of our first xScale data centres joint venture. Partnering with a world-class investment partner like GIC will provide the opportunity to make significant capital investments in order to capture targeted large-footprint deployments while continuing to optimise our capital structure. The JV structure will enable us to extend our cloud leadership while providing significant value to a critical set of hyperscale customers.”