2020 is a record year for the data center industry

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2020 is a record year for the data center industry

This year will be remembered for the global pandemic and deep economic turmoil in world markets. At the same time, a bit of economic optimism is added by the data centre industry, where, according to Synergy Research Group, the total cost of mergers and acquisitions (M&A) has broken all records, which has not been achieved since 2017, when their number was more than in 2015 and 2016 combined. This year, there was almost $ 31 billion worth of data centre purchase and sale deals, significantly more than in 2019.

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Cloud Solutions

In total, 131 transactions worth $ 30.9 billion were completed, despite the inevitable delay in the implementation of a number of transactions due to the coronavirus pandemic. These numbers will be even higher, as a number of M & A transactions are planned to be completed by the end of the year. For example, on Tuesday DataBank closed a deal to acquire zColo, while Synergy’s report includes only deals at the end of November.

The largest this year was the acquisition of Interxion by Digital Realty for $ 8.4 billion – the deal was formally concluded last year but closed in the first quarter of 2020. Throughout 2015-2020, Digital Realty and Equinix were by far the most prolific investors, with major deals such as the $ 7.6 billion Dupont-Fabros merger and the $ 3.6 billion acquisition of Verizon’s Equinix data centres and Telecity for $ 3.8 billion Other major buyers included Colony, CyrusOne, GDS, Digital Bridge / DataBank, Iron Mountain, NTT, GI Partners, Carter Validus, QTS and Keppel.

Chief analyst at Synergy John Dinsdale (John Dinsdale) has called 2020 “a banner year” for mergers and acquisitions data centres, adding: ” We also know about the transactions and the IPO in the amount of nearly $ 7 billion, which are at different stages of the closure, so the process remains sustainable despite high activity in 2020. This drive to find new sources of investment capital is fueled by an almost inexhaustible demand for data centre capacity. ”

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The demand for data centre services has only increased this year, and this trend has already been observed in 2019, although the pandemic still affected the growth. Datacenter construction has also increased this year, again despite the inevitable constraints caused by the pandemic. As noted earlier, revenues from renting a data centre are also breaking records and do not think to decline – customers rent space in advance in unfinished data centres.

At the recent DCD Europe VIRTUAL conference, CBRE’s data centre research director Penny Madsen said that the European data centre construction market in 2020 has exceeded expectations and that this trend is likely to continue in 2021 as operators work over outstanding projects slowed down by Covid-19. This trend can be expected in other regions hardest hit by the pandemic, including the Americas and some countries in the Asia-Pacific region.