Colocation juggernaut Equinix has broadened its reach into India by buying two data centers from GPX India for $161 million. The deal is slated to close in the first quarter of next year once it garners the customary closing and regulatory approvals.
GPX India is a carrier neutral data center provider that has direct connections to Amazon Web Services, Google and Oracle cloud. The two data centers are located in Mumbai, which is the home to the critical IT infrastructure of various global organizations. With subsea cables at landing sites nearby, Mumbai also has access to international connectivity.
Equinix said the two data centers form a fiber-connected hub that will increase the amount of capacity it can offer by more than 90,000 square feet. The two data centers currently house 1,350 cabinets with plans for 500 more once the build-out is complete.
With the data centers in hand, Equinix customers will have access to services from more than 200 internet and cloud service providers, local carriers and content delivery networks (CDNs.)
It's a timely move into India for Equinix. According to research by McKinsey, the IT and digital communications market in India will double in size by 2025 to contribute between $335 billion and $435 billion in GDP.
"The data center market in India is expected to exceed $1 billion in 2020 and grow at 12% compound annual growth rate from 2019-2024, the third highest rate in the world," said John Dinsdale, chief analyst and research director for Synergy Research Group. "Our forecasts show that the country will become the seventh largest data center market in the world in 2021."
With more than 500 million internet users and a competitive mobile environment, India has been a hot bed of late for technology investment activity. As of last month, Jio had raised more than $50 billion from investors such as Facebook and Google as it squares off with Airtel and Vodafone Idea. In July, Google announced it plans to invest around $10 billion in India over the next five to seven years.
As the largest colocation and data center provider, Equinix is now able to deliver more traffic into and out of India. The presence of Equinix will also accelerate business' digital transformations as well as help provision new services at the edge.
Globally, Platform Equinix comprises more than 210 data centers across 56 metros and 26 countries, providing data center and interconnection services for over 9,500 global businesses, including more than 50% of Fortune 500 companies. Equinix operates 46 IBX data centers in Asia-Pacific across 13 metros in Australia, China, Hong Kong, Indonesia, Osaka, Seoul, Singapore and Tokyo.
"India represents the second largest internet user base in the world, with consumption expected to grow with the continued advancement of internet infrastructure, smartphone ownership and the penetration of 4G and 5G," said Equinix CEO and President Charles Meyers, in statement, Equinix. "Extending Platform Equinix to India has long been a strategic objective for Equinix and we are excited that the GPX transaction will allow us to capitalize on this market opportunity and meet the needs of our customers as they seek to expand their digital businesses.
"The acquisition of GPX's business in India means we are able to make a giant leap forward in terms of growing our ecosystem in India, and gives us a solid foundation for rapid growth and expansion in the country. This acquisition follows the recent announcement of our planned expansion in Canada and is a testament to our continued focus on expanding our global reach as companies continue to view interconnection at the digital edge as a business imperative."
In June, Equinix broadened its horizons across Canada by buying 13 data centers from Bell (BCE) for $750 million in cash. In October, Equinix expanded its footprint into Mexico with an all cash deal of $175 million to buy three data centers from Axtel.
In January, Equinix announced it was buying bare metal data center company Packet. When the deal closed in March, Equinix said it had paid $335 million for Packet.
Equinix is far and away the colocation market leader and one of the biggest spenders in that space. Over the 2015-2020 period, the largest investors in data center M&A have been Digital Realty and Equinix, according to Synergy Research Group (SRG). SRG has previously said it expects 2020 to be a bumper year for data center M&A activity.