Reflecting on Further Consolidation in the European Data Center Arena

As the industry digests the Telecity and Interxion merger, another provider is reported to be making its move, this time NTT. The Japanese telecoms giant has announced its plans to take a major interest in e-shelter, a major data center provider for the European DACH region (Germany, Austria and Switzerland). e-shelter runs eight data centers and in terms of size, is third in the European data center market. The deal equates to roughly $840m for 86.7% of e-shelter’s shares.

NTT is the second largest Japanese company after Toyota, and the second largest telecoms provider worldwide. In 2010, NTT took over systems integrator Dimension Data, one of the largest Cisco resellers globally, demonstrating the company’s fairly aggressive expansion record around its product/market portfolio.

What can we learn from the current developments?

The European data center arena has become an important battlefield in the competition for enterprise IT and the cloud.

The argument between the concepts of carrier-neutral versus carrier-oriented data centers entered a new phase when NTT acquired a major carrier-neutral provider.

The integration of the cloud-hosting-data center-connectivity-managed services elements into the IT delivery chain is in full swing. There is more to follow in the pursuit of end-to-end service delivery.

What can we expect in the near future?

  • More consolidation of data center providers.
  • More data center and network infrastructure acquisitions by telecom providers.
  • Public IaaS cloud providers may also become active in the acquisition market, mostly in the managed services domain.

At Custom Connect, we strongly advocate carrier-neutrality, as in our opinion it is the only approach to ensure flexibility and the best price/performance ratio. The acquisition of e-shelter will decrease the choices in the market. This provides an extra motive for organizations to seek neutral and independent advice in global networking matters.

We would be happy to help you out.

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