Equinix has completed its acquisition of Bit-isle, with 97% of the shares purchased and the remaining 3% to be acquired by the end of the year. This completes an acquisition announced in September and adds a further six data centres in Japan to the Equinix stable, bringing its total global footprint to 111 data centers in 33 markets around the world.
This is a timely acquisition as the Japanese recovery continues and Equinix seeks to meet the growing demand for data centre services. It is already nearing complete of its own latest data centre in Tokyo, TY5, due for completion in Q1 2016 and that will bring the total number in Japan to 12. Doubling its footprint in a few short months.
This latest acquisition will place Equinix third in Japan in terms of data centre locations behind NTT and KDDI and significantly increases its important in the wider Asia market. According to a recent Bloomberg article four of the fastest growing economies can be found in the Asia-Pacific market, these are China, Philippines, India and Indonesia although Japan didn’t appear in the list. In fact according to the World Bank, Japan’s economy shrank by 0.1% in 2014 though the outlook for 2015 is a little better according to trading economics.
Equinix is well placed to take advantage of that growth with 27 data centres spread across the region including Australias, China, Hong Kong, Indonesia, Japan and Singapore. Japan is one of the largest co-location markets in the world and Equinix Japan is already the highest performed in terms of interconnection revenue in Asia Pacific, this acquisition will merely stretch that lead.
What next for Bit-isle data centres
The first step for Equinix will be to consolidate the financials, an exercise that has already started but in terms of the data centres they will need to be connected to the Equinix ecosystem. In most cases this can be accomplished quickly due to the proximity of the Bit-isle data centres to the existing Equinix ones. The campus connectivity will see Bit-isle customers able to quickly take advantage of the reach of the Equinix cloud and its recent partnership announcements with IBM Softlayer, Rackspace and Oracle.
Equinix clearly identified Japan as a key market for them in the future and they have quickly brought Bit-isle and its data centres into the fold. It will be interesting to see where they will go next, one of the obvious targets must be China, but it may be harder to acquire a similar business in that country.
Steve Smith, president and CEO of Equinix commented in a canned statement “For several years Equinix has been evaluating how to accelerate our leadership in this market. Bit-isle facilities are adjacent to our carrier dense sites in downtown Tokyo, giving us customer-ready capacity as well as the opportunity to scale Platform Equinix in this increasingly constrained, but important global market.”
It will become increasingly difficult for other global companies to gain significant footprint in Japan as there are few remaining companies that are likely to be attractive or small enough for other competitors to acquire. This is a significant play by Equinix and it will be interesting whether the American company can succeed with the greater footprint in such a traditional country, where inter company relationships are important.