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Equinix bought TelecityGroup for datacentre connectivity locations, says vice-president Eric Schwarz

Datacentre operator Equinix admits £2.3bn deal to buy TelecityGroup could spark a flurry of merger and acquisition activity elsewhere in the market

Eric Schwarz, European vice-president of datacentre operator Equinix, has shed light on why the colocation company bought rival provider TelecityGroup.

He said TelecityGroup's datacentres covered areas of connectivity Equinix was interested in.

Speaking to Computer Weekly at the Datacloud Europe event in Monaco, Schwarz said the locations of Equinix's datacentres had been dictated by their ease of network connectivity.

“We’re interested in which geographies are important to global customers with interconnection requirements. We have plenty of global customers that want capacity in Sweden or Iceland or whatever, but they really aren’t interconnected-orientated locations, so we’re not going to do that,” he explained.

“In the US, people buy a big cornfield and put a datacentre in the middle of it because it’s cost effective – but it’s not interconnection-orientated, so we’re not doing it. That’s not to say it’s a bad idea, it’s just not what we do.”

Schwarz said the company's core business in the company was to provide global network-neutral datacentre interconnections: "When we talk about geographies, we’re interested in which geographies are important to global customers with interconnection requirements," he said.

The colocation provider made headlines last week after buying rival datacentre operator TelecityGroup for £2.3bn.

Speaking at the Datacloud Europe event during a panel discussion with TelecityGroup, Schwarz described the deal as the “elephant in the room” – but said he was unable to comment on it further, because regulators were still in the process of approving the deal.

Centrally connected markets

He acknowledged the location of TelecityGroup’s datacentres had largely influenced Equinix’s decision to but the company.

“The geographies that are interesting to us are covered by Telecity, which is one of the core motivations for that transaction. It gets us coverage in markets like Dublin or Stockholm, which are interconnection-orientated markets,” he said.

Schwarz said it was possible the acquisition could spark a flurry of similar deals in the market.

“I do think there is a self-fulfilling cycle when a deal like this gets announced, as bankers, lawyers, and competitors all say: ‘How do I react to that?’ It triggers things. This is not the last deal,” he said.

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