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Data Center Consolidation is Big in 2017

Data Center Consolidation is Big in 2017

With the data center and colocation industry continuing to grow year after year, the first half of 2017 saw many mergers and acquisitions, with both larger and smaller operators scaling their operations up. The consolidation is causing problems for those looking for a location for their next data center because the number of options is shrinking.

The biggest such merger is Digital Realty Trust’s proposed merger with DuPont Fabros Technology for $7.6 billion.  This merger is expected to close later this year.  The acquisition will allow Digital Realty Trust to handle 10 MW+ deployments.  Telecom companies, such as Windstream, Verizon and CentryLink, are also selling their hosting and colocation facilities.  The sale of ViaWest data center to Peak 10 makes Peak 10 the largest privately held data center company in North America.

The increase in acquisitions is also happening in the enterprise-class, as well, with Digital Bridge’s purchase of Vantage Data Centers, one of the top operators in Silicon Valley.  Dublin, Ireland-based Chirisa Investments made its first move into the US market with its purchase of 365 Data Centers and is expected to continue to grow its operations in the United States.

CyrusOne  purchased two raised-floor facilities from Sentinel Data Centers.  As one of the largest colocation operators, CyrusOne will continue to grow both organically and through strategic purchases.  The shrinking number of providers will continue and will give less options during the site selection process. The pace of mergers and acquisitions is not expected to slow down in the second half of 2017.