LinkedIn Deal Means More Microsoft in Digital Realty Data Centers

If deal closes, Microsoft will become one of data center provider’s biggest customers

Yevgeniy Sverdlik

June 14, 2016

2 Min Read
LinkedIn Deal Means More Microsoft in Digital Realty Data Centers
Digital Realty data center in Chessington, U.K. (Photo: Digital Realty)

Its $26.2 billion acquisition of LinkedIn will make Microsoft one of the top 10 customers of Digital Realty Trust. While Microsoft has done business with the San Francisco-based data center provider, it has not leased enough capacity to be considered even one of Digital’s top 20 customers.

Microsoft is one of the world’s biggest consumers of leased data center space, and it has been leasing more and more recently, as it expands its cloud services business, competing with Amazon Web Services, Google Cloud Platform, and IBM SoftLayer, in addition to several smaller players. Together, the cloud giants are fueling a data center land grab that has created a boom for data center providers, many of whom have found it difficult to build more data centers fast enough to satisfy the demand.

Read more: How Long Will the Cloud Data Center Land Grab Last

LinkedIn is Digital Realty’s sixth-largest customer, judging by the amount of rent it pays to the San Francisco-based data center REIT annually. Its top tenant is IBM, and CenturyLink, Equinix, Facebook, and AT&T are second, third, fourth, and fifth, respectively.

If Microsoft’s acquisition of LinkedIn closes successfully, Digital Realty will be able to claim it as one of its biggest customers, which should be good news for the data center provider, considering the rate with which the Redmond, Washington-based giant has been ramping up its data center spending. The company spent 65 percent more on data centers in the first quarter of this year than it did in the first three months of 2015.

See also: New LinkedIn Data Center Strategy Similar to Microsoft's

In the first quarter, Microsoft leased close to 50MW of data center capacity in three locations from two different providers: CyrusOne and DuPont Fabros Technology, according to the commercial real estate firm North American Data Centers. Last year, Microsoft’s data center leasing activity included about 28MW total in three deals, with Digital Realty, DuPont Fabros, and Vantage Data Centers.

LinkedIn has five data center locations, using Digital Realty in four of them, according to Digital’s investor report for the first quarter. Digital doesn’t disclose specific locations its customers are in, but, as Data Center Knowledge has reported in the past, LinkedIn is in Digital’s data centers in Northern Virginia and Dallas-Fort Worth markets. The social network has also said publicly that Digital is its data center provider in Singapore. It is unclear where the fourth LinkedIn location Digital has cited is.

Overall, LinkedIn occupies about 280,000 square feet of data center space in the four Digital locations.

In 2014, it also signed a 2MW lease with Equinix in Los Angeles, according to North American Data Centers, and last year took 10MW with Infomart Data Centers in the Portland market.

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