Dancing Elephants – What about Equinix’s bid for TelecityGroup?

Last week, on May 7th, the US data center giant Equinix announced it will bid for the European TelecityGroup. The offer may upset Telecity’s proposed merger with Netherlands-based Interxion. If the bid succeeds, Equinix will become the largest carrier-neutral data center services provider with a presence on every continent and in most countries, apart from Africa.

The bid crosses the ongoing merger between Telecity and Interxion that was announced just three months before. Interxion commented on the Equinix bid:“pursuant to the terms of the Implementation Agreement, TelecityGroup’s entrance into discussions with Equinix releases Interxion from its exclusivity obligations with TelecityGroup during the pendency of the discussions.” So Interxion may end up as a spinster or again as a candidate for another take-over adventure.

At Custom Connect, are we comfortable with this major development? No, to be frank. Why is that? Equinix, TelecityGroup and Interxion are all appreciated partners of Custom Connect. They validate our vision that carrier-neutrality is the ideal scenario for those companies and enterprises currently investing in data center computing, as it offers free connectivity choices. All three companies are offering carrier-neutral services.

Carrier-neutrality provides maximum choice as well as equal market access to all participants. This attracts a growing number of parties that grows and diversifies. Players have an opportunity to grow future business operations when offered greater choice of whom to partner with. Neutral data centers are part of worldwide networks that are interconnected through low-latency, high-availability links. Proven solutions at one data center can be instantly replicated at another data center. This creates simplicity and cost-effectiveness for companies that are seeking to differentiate on global business opportunities.

The Equinix bid takes out one, and maybe two, strong, competitive carrier-neutral providers. Users see their choice reduced from three to one and a monopoly emerges. We will see what this will bring to our market.

 

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