Data Center Knowledge » Switch and Data

Equinix Completes Switch & Data Merger

Rich Miller — Mon, 03 May 2010 00:58:55 +0000

Equinix has completed its acquisition of Switch & Data, creating a colocation juggernaut spanning three continents. The closing of the merger, which announced last October, took place Friday. The consummation of the deal came a week after the U.S. Department of Justice completed a lengthy antitrust review, removing the final barrier to

The purchase of its long-time rival gives Equinix (EQIX) a global footprint of more than 6 million square feet of data center space across 87 data centers in 35 markets in North America, Europe and Asia-Pacific. It also provides Equinix with a presence in 16 new markets across North America, including Atlanta, Denver, Miami, Seattle and Toronto.

Paolo Gorgo of Nortia Research noted the deal’s impact on number of available cabinets, based on company data at the close of the fourth quarter. “Switch and Data had about 8,920 cabinet equivalents billing, and an inventory available of about 5,080 cabinets,” Paolo noted. “Equinix ended the 1Q 2010 with about 23,600 cabinet equivalents billing in the U.S., and a further inventory of about 5,900 cabinets, half of them already pre-assigned.

“In other words, with this acquisition Equinix almost doubled the inventory of cabinet equivalents available in the North American market,” he continued. “Assuming all cabinets could be sold overnight, at an average of $2,000 per month (probably a conservative number), the combined company has, from day one, and without further expansions, the capacity to add an annual revenue rate of about $263 million.”

TeleGeography observes that the acquisition “will create a colocation services giant that dwarfs its competitors, both in the US and globally.” The research firm estimates that the purchase of Switch and Data gives Equinix a footprint that’s about three times the size of its largest competitor, Telehouse.

“While Equinix has emerged as by far the largest provider of colocation services, the sector remains highly competitive,” TeleGrography adds. “In the New York metro area alone, Equinix contends with over 50 competitors.”

Here’s a summary of our previous coverage of the deal:

DOJ Clears Way for Equinix, Switch & Data Deal

Rich Miller — Sat, 24 Apr 2010 02:46:25 +0000

Equinix is expected to successfully complete its acquisition of Switch and Data next week after the United States Department of Justice told the companies it will allow the deal to go forward. The DOJ told Switch & Data that it has closed its review of the antitrust implications of the deal, which combined two leading colocation and interconnection providers. Switch and Data and Equinix now expect the transaction to close on Friday, April 30.

Last October Equinix (EQIX) announced an agreement to acquire Switch & Data (SDXC) for $689 million in cash and stock. The acquisition will add more than 1 million gross square feet of data center capacity, bringing Equinix’s total global footprint to more than 6 million square feet across 79 data centers in 34 markets in North America, Europe and Asia-Pacific.

Here’s a summary of our previous coverage of the deal:

Roundup: Active Power, Interxion, Amazon

John Rath — Thu, 25 Mar 2010 14:57:17 +0000

Here’s a roundup of some of some of this week’s headlines from the data center and hosting industry:

Active Power Reports $6 Million in Orders. Active Power (ACPW) announced that since last August they have received nearly $6 million in orders that represent more than 4.5 megawatts of mission critical backup power. The orders are for the PowerHouse solution, a containerized power and cooling infrastructure. Half of the orders are providing the PowerHouse container solution in conjunction with containerized data center deployments. In its 2009 annual report Active Power reported more than $8 million in PowerHouse orders. Click here to see a video tour of the PowerHouse container on the DCK video archive.

Interxion expands in Amsterdam.European data center provider Interxion announced the expansion of its Amersterdam AMS5 facility. The new 1,100 square meters of space will feature 2N UPS power and N+1 cooling and is expected to be completed by August 2010. The Interxion energy-efficient modular architecture will be the third expansion for this facility in an 18 month period. “Amsterdam is a key market for Interxion, and we are continuously seeing an increase in demand from customers to colocate to our highly resilient, low-latency colocation facilities,” said Michel vanden Assem, Managing Director, Interxion Netherlands.

Equinix/Switch & data merger delayed.Both Equinix (EQIX) and Switch and Data (SDXC) filed an amendment to their merger plan giving both sides until April 21 to finish the acquisition. The waiting period has already been reset once, back in December 2009. Equinix did not give a reason for why the waiting period was extended.

Amazon announces ‘Bring your own license’. Amazon (AMZN) announced the immediate availability of the Microsoft Windows Server License Mobility Pilot, which enables customers with Microsoft Enterprise Agreements (EA) to migrate their existing Microsoft Windows Server licenses to Amazon EC2. The pilot program is available for U.S. companies with an existing EA that is valid for a minimum of 12 months after your entry to the pilot and you must have already purchased Software Assurance form Microsoft for your EA Windows Server. Microsoft will take enrollments through September 23, 2010. Complete details on the program can be found here

Switch & Data Shareholders OK Equinix Deal

Rich Miller — Mon, 01 Feb 2010 13:00:14 +0000

Shareholders of Switch & Data have voted to approve the company’s proposed acquisition by Equinix, the companies said Friday. Completion of the $700 million deal is delayed by pending approvals from federal antitrust regulators, and not likely to close until the second quarter. Switch and Data will announce the expected closing date in a press release five business days before the expected closing date.

Switch and Data (SDXC) recently moved to settle three lawsuits related to the sale to Equinix. A memorandum of understanding between Switch and Data and lawyers for plaintiffs would have all claims dismissed with prejudice in return for attorneys fees and costs, estimated at about $900,000.

“Switch and Data and the other defendants deny all of the allegations in the lawsuits and believe that the existing disclosures regarding the proposed merger are appropriate under the law,” the company said in an SEC filing. “Nevertheless, Switch and Data and the other defendants have agreed to settle the putative class action lawsuits in order to eliminate the risk, burden and expense of further litigation, to fully resolve all claims raised in the lawsuits, to permit the merger to be consummated without the risk of injunctive relief or delay, and to permit Switch and Data’s stockholders to receive the consideration provided for in the merger.”

Switch & Data Sale Slowed by Regulators

Rich Miller — Thu, 07 Jan 2010 17:43:10 +0000

A map of the combined data center footprint of Equinix and Switch and Data.

Colocation provider Switch & Data (SDXC) said today that its planned $700 million sale to Equinix will be delayed by a request for additional information from federal antitrust regulators. The transaction is now likely to close in the second quarter of the year, rather than the first quarter as additionally anticipated, the company said today in a filing with the Securities and Exchange Commission. Switch and Data said it will go forward with a Jan. 29 meeting at which its shareholders will be asked to approve the deal.

The acquisition of Switch and Data by Equinix (EQIX), which was announced Oct. 21, combines two of the largest players in the market for colocation and interconnection services, and gives Equinix a presence in 16 new markets across North America. Shortly after the deal was announced, Equinix submitted information about the transaction to the Antitrust Division of the Department of Justice and the Federal Trade Commission as required under the Hart-Scott-Rodino (HSR) Antitrust Act.

After consulting with regulators, Equinix re-filed its submission on Dec. 7, starting a 30-day waiting period for the antitrust review, which was to expire Wednesday.

“On January 6, 2010, Equinix received a Request for Additional Information (commonly referred to as a ‘second request’) from the Antitrust Division in connection with the Antitrust Division’s review of the Merger,” Switch and Data said in its filing. “This second request extends the waiting period imposed by the HSR Act until 30 days after Equinix has substantially complied with the second request unless that period is extended voluntarily by Equinix or terminated sooner by the Antitrust Division. Equinix intends to respond promptly to the second request and now expects the merger to close in the second quarter of 2010.”

The SEC filing did not discuss any details of the information request from regulators, or whether it would have any impact upon the deal beyond the planned closing date. Requests for additional information from regulators are not uncommon in large acquisitions.

In an Oct. 21 conference call, several Wall Street securities analysts wondered whether the deal might invite antitrust scrutiny.”Rest assured, we’ve looked hard at this,” said Equinix president and CEO Steve Smith. “We are taking a position that the North American hosting market is a competitive market.”

Equinix says it has “low single digit” market share of a broadly-defined market that includes web hosting providers as well as colocation and wholesale data center providers. But Equinix and Switch and Data are arguably the two largest players in North America in the narrower niche of carrier-neutral colocation and peering services.

Switch and Data Had Another Suitor

Rich Miller — Tue, 29 Dec 2009 14:21:00 +0000

The biggest deal in the data center industry for 2009 was the news that Equinix (EQIX) would acquire Switch and Data in a $689 million transaction. As the year draws to a close, we’re learning more about the behind-the-scenes maneuvering that led to the deal, in which Switch and Data (SDXC) spent months weighing competing bids from Equinix and an international provider.

The negotiations with the rival suitors, which began in earnest in April and concluded in late September, are detailed in an SEC filing by Equinix. The existence of a rival suitor for Switch and Data was first noted by Paolo Gorgo in an analysis at Seeking Alpha last week.

In January Switch and Data was approached by “a privately-held firm in its industry based outside of the United States” to discuss a possible business combination. This international company proposed a merger of equals with Switch and Data, which emphasized that it was not for sale but began discussions in March.

Equinix contacted Switch and Data in April to express interest, kicking off five months of talks. Equinix dropped out of the talks in mid May, but resumed discussions in early July. On Sept. 26, the Switch and Data board determined that the Equinix bid – which represented a 32 percent premium to its stock price – was the best outcome for its shareholders.

Who was the mystery suitor? Paolo notes that the description fits Interxion, which already had a joint marketing agreement with Switch and Data. At the time, we noted that the partnership “appears to be a competitive response to the growth of Equinix, which acquired IXEurope last fall, providing it with facilities in major Internet markets on both sides of the Atlantic.”

The description could also fit KDDI, the Japanese company that owns colocation and peering providers Telehouse America and Telehouse Europe. KDDI has been actively expanding its Telehouse network in Europe and Asia, but has not announced plans for expansion in the U.S. beyond its three existing facilities.

Averting A Global Competitor
By stepping up to outbid the international firm, Paolo notes that Equinix was able to “avoid the creation of a global competitor in the sector, and stopped a foreign entity from achieving a US listing (without going through an IPO) and a strategic footprint in the most important market for the colocation sector.”

The acquisition was also driven by the economics of data center development, allowing Equinix to enter new geographics and add capacity in key existing markets for less than it would have cost to build new facilities in those locations.

The Equinix-Switch and Data deal combines two of the largest players in the market for colocation and interconnection services, and gives Equinix a presence in 16 new markets across North America, including Atlanta, Denver, Miami, Seattle and Toronto.

Equinix will integrate Switch and Data’s data center business and operations, including the company’s 34 data centers in 22 markets in the U.S. and Canada. The acquisition will add more than 1 million gross square feet of data center capacity, bringing Equinix’s total global footprint to more than 6 million square feet across 79 data centers in 34 markets in North America, Europe and Asia-Pacific.

Vote Set For Jan. 29
The deal is currently undergoing regulatory review, and Switch and Data shareholders are scheduled to vote on the Equinix proposal at a Jan. 29 shareholders meeting.

The deal may have additional ripples as competitors weigh their strategic options going forward. The Sunday Times of London reports that Interxion may be planning an IPO in 2010. The paper says the company has been in discussions with investment banks about a public offering on the NASDAQ market.

It’s important to note that this is not the first time UK media have predicted an Interxion offering. Exactly two years ago the Guardian wrote that Interxion was discussing an IPO with investment banks. Instead, the company remained privately held and raised $190 million to continue its aggressive expansion of its data center network, which now spans 26 facilities in 11 countries.

Equinix, Switch & Data Prep Integration

John Rath — Wed, 18 Nov 2009 22:34:03 +0000

Teams arrived at Switch and Data Tuesday to begin integration plans for the company’s planned $689 million acquisition by Equinix. Switch and Data plans to file its proxy statement with the SEC by the end of November to give out more information surrounding the transaction for an overall vote expected to take place in the first quarter of next year. In the meantime, both companies are keeping busy, issuing a series of news announcements this week.

On Monday, enterprise video solution provider Kontiki announced that Equinix had selected their Enterprise Content Delivery Networking (ECDN) solution to deliver video content to every employee’s desktop worldwide. Kontiki was deployed in a matter of weeks and will deliver high-quality video for training and employee communications.

Equinix Adopts Kontiki
“As video becomes more ubiquitous throughout our company, we knew that we’d need a complete video infrastructure in place that could grow with our needs,” said Equinix CIO Brian Lillie. “We adopted Kontiki’s video solution portfolio based on ROI, scalability and ease of use.”

On Tuesday Kontiki also debuted the VideoCenter enterprise employee video portal, being demonstrated this week at Streaming Media West 2009 conference in San Jose. The Kontiki VideoCenter delivers on the promise of “YouTube for the Enterprise” by overcoming the challenges of securing and controlling the communication tool in a way that is consistent with company policies and culture. The Kontiki VideoCenter will be generally available in February 2010.

Equinix (EQIX) announced that FXall will offer connectivity to its foreign exchange platform within the Equinix New York 4 data center inS ecaucus, NJ. FXall is a leading multibank foreign electronic platform. The service will be available to trading companies within the Equinix Financial eXchange, allowing them the benefit of directly exchanging data within the same physical location.

“Beyond benefitting our current financial community customers, FXall’s presence will hopefully attract new customers to our NY4 center and serve as a spring board for future FXall growth initiatives,” John Knuff, director, Business Development at Equinix.

Switch and Data announced Tuesday its Alliance Partners Practice. During a two year incubation the program supported leading channel partners with online tools, partner certifications and dedicated relationship managers designed to meet the unique needs of value added resellers, system integrators, and solution providers. The expansion of this program will enroll additional Authorized Agents looking for new ways to generate reliable revenue. The Alliance Partners Program is made up of a team of professionals with 50 plus years of combined channels sales experience.

Equinix, Switch & Data Prep Integration

John Rath — Wed, 18 Nov 2009 22:34:03 +0000

Roundup: Equinix, Switch & Data, The Planet

John Rath — Wed, 11 Nov 2009 14:30:35 +0000

Here’s a roundup of news announcements from the data center and hosting industry:

Hibernia Atlantic expands to two Equinix data centers. Submarine transport cable provider Hibernia Atlantic announced Tuesday the expansion of its Global Financial Network(GFN) into the Equinix New York-2 and New York-4 data centers in Secaucus, New Jersey. The expansion from Hibernia aims to provide low latency, redundancy and connectivity to global banks and exchanges in the New York metro area. Hibernia‘s GFN spans 24,000 Kilometers (14,913 miles) of fiber optic cables across key financial cities around the world. “Our continued GFN expansion in New York metro and in other major financial centers reflects our core commitment to provide ‘security through diversity’—our company philosophy that offers world-class, redundant solutions to our financial customers,” said Bob McMann, VP of Provisioning and Procurement for Hibernia
Switch & Data selected by Pragma Securities. Switch & Data announced that Pragma Securities, a trading solutions provider has selected their New York Financial EcoCenter to optimize the performance of its quantitative trading solution. After an extensive diligence process Pragma selected the North Bergen, New Jersey data center to host its trading execution services, and will be one cross connect away from the other electronic trading customers in the site.
Nimsoft introduces alliance program. Following the October launch of their Unified Monitoring Solutions, Nimsoft announced their charter members in the Unified Monitoring Alliance Tuesday. The new monitoring solution provides a total, unified view of both internal and external IT resources. The Unified Monitoring Alliance partners are made up of service providers, solution partners and technology development partners. Partners like FusionStorm, Ingram Micro, Shavlik, Service-now.com, Rackspace and many others are among the first to join the alliance. “The alliance not only expands opportunities for growth and collaborative innovation for our partners, but also effectively increases the breadth and depth of the systems monitoring and management solutions that Nimsoft offers to its customers,” said Nimsoft President Gary Read said
The Planet signs Ayuda Networks. The Planet announced Tuesday that Ayuda Networks has signed on to join the company’s recently launched Partner Plus program. Ayuda Networks consults with clients to evaluate connectivity requirements and implement the best solutions for their specific business. Ayuda will add The Planet to its portfolio of top-tier solution providers and include them in recommendations to clients evaluating managed and dedicated hosting, as well as colocation services.

Roundup: Equinix, Switch & Data, The Planet

John Rath — Wed, 11 Nov 2009 14:30:35 +0000

Here’s a roundup of news announcements from the data center and hosting industry:

Hibernia Atlantic expands to two Equinix data centers. Submarine transport cable provider Hibernia Atlantic announced Tuesday the expansion of its Global Financial Network(GFN) into the Equinix New York-2 and New York-4 data centers in Secaucus, New Jersey. The expansion from Hibernia aims to provide low latency, redundancy and connectivity to global banks and exchanges in the New York metro area. Hibernia‘s GFN spans 24,000 Kilometers (14,913 miles) of fiber optic cables across key financial cities around the world. “Our continued GFN expansion in New York metro and in other major financial centers reflects our core commitment to provide ‘security through diversity’—our company philosophy that offers world-class, redundant solutions to our financial customers,” said Bob McMann, VP of Provisioning and Procurement for Hibernia
Switch & Data selected by Pragma Securities. Switch & Data announced that Pragma Securities, a trading solutions provider has selected their New York Financial EcoCenter to optimize the performance of its quantitative trading solution. After an extensive diligence process Pragma selected the North Bergen, New Jersey data center to host its trading execution services, and will be one cross connect away from the other electronic trading customers in the site.
Nimsoft introduces alliance program. Following the October launch of their Unified Monitoring Solutions, Nimsoft announced their charter members in the Unified Monitoring Alliance Tuesday. The new monitoring solution provides a total, unified view of both internal and external IT resources. The Unified Monitoring Alliance partners are made up of service providers, solution partners and technology development partners. Partners like FusionStorm, Ingram Micro, Shavlik, Service-now.com, Rackspace and many others are among the first to join the alliance. “The alliance not only expands opportunities for growth and collaborative innovation for our partners, but also effectively increases the breadth and depth of the systems monitoring and management solutions that Nimsoft offers to its customers,” said Nimsoft President Gary Read said
The Planet signs Ayuda Networks. The Planet announced Tuesday that Ayuda Networks has signed on to join the company’s recently launched Partner Plus program. Ayuda Networks consults with clients to evaluate connectivity requirements and implement the best solutions for their specific business. Ayuda will add The Planet to its portfolio of top-tier solution providers and include them in recommendations to clients evaluating managed and dedicated hosting, as well as colocation services.