Top Data Center Providers Strike Submarine Cable Deals

As the cloud continues its rise, cross-continental bandwidth arms race is on

Yevgeniy Sverdlik

November 3, 2015

3 Min Read
Top Data Center Providers Strike Submarine Cable Deals

There is a resurgence of submarine cable construction, and two of the world’s largest data center service providers, Equinix and Digital Realty Trust, are positioning to benefit from the new intercontinental cable systems that are being built.

Earlier this year, a partner of Irish submarine cable operator AquaComms has started laying one of the first trans-Atlantic cables in more than a decade in response to growing demand for intercontinental bandwidth. The system, called America Europe Connect, or AEConnect, will span 5,400 kilometers between the west coast of Ireland and Long Island.

Equinix announced a deal to connect its data centers to the new cable system in August. Digital announced its own deal with AquaComms this week.

“A resurgence of subsea cable projects is … creating opportunity for Equinix, helping service providers accelerate returns by terminating cables directly into our IBXes,” Equinix CEO Stephen Smith said on the company’s third-quarter earnings call late last month, referring to the company’s International Business Exchange data centers. “Equinix is working with AquaComms, who is deploying one of the first trans-Atlantic subsea cables in more than a decade to meet increased bandwidth needs for global businesses.”

Both Equinix and Digital also have agreements to connect data centers to a submarine cable system called Faster, which will reach across the Pacific Ocean, connecting the US West Coast with Asia.

Equinix announced an agreement with the operator of Faster in September. Digital will tap into the system through Telx, the data center operator it recently acquired. Telx announced it will plug one of its West Coast data centers into the Faster system in July.

The use of cloud services and consumption of online content is growing, and more and more companies provide content and services internationally, which is driving demand for connectivity bandwidth between continents. Multitenant data center providers like Equinix and Digital make their facilities more attractive for prospective customers by positioning them as access points to the new network capacity.

Equinix data centers in New York and London will provide access to AEConnect, while its Silicon Valley, Seattle, and Los Angeles facilities will plug into the Faster system.

Digital plans to connect its facilities in major New York carrier hotels – 32 Avenue of the Americas, 111 8th Avenue, and 60 Hudson Street – to AEConnect. The Telx agreement with Faster was to connect the cable system to the data center operator’s Hillsboro, Oregon, facility.

Telecommunications companies as well as web giants are often behind the massive submarine construction projects. Investors in the Faster system include Asian telecoms and an IT services firm as well as Google. Microsoft is the first “foundational” customer of AEConnect, which will connect directly to its data centers in Ireland. This is one of several submarine cable projects Microsoft is involved in.

Both new systems will support 100 Gbps connectivity necessary for the new breed of applications.

“Out of approximately 230 subsea cables across the globe, very few are currently equipped to fully support coherent technology with 100 Gbps capabilities,” Dave Crowley, managing director of global network procurement for Microsoft, said in a statement. “With bandwidth-hungry applications on the rise, we want to ensure our customers are getting the capacity across the Atlantic that they need.”

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