Digital Realty wants to unseat data center heavyweight Equinix. And it plans to do this by solving what it calls “the data gravity problem.”
“You’re going to continue to see us as a global alternative to Equinix,” said Tony Bishop, SVP of platform and ecosystem strategy at Digital Realty. “Equinix is obviously the behemoth when it comes to retail, carrier-neutral colocation. We feel Equinix did a phenomenal job of creating the category around interconnection, but we feel interconnection is only one piece of the puzzle. The second piece is data gravity, and how do you solve for data gravity?”
By data gravity, he means massive amounts of data generated and then stored in disparate, siloed locations — in separate data centers, clouds, and edge locations.
“The more that data grows, and the more apps and services grow, that limits mobility,” Bishop said. “So you’ve got to invert the traditional IT architecture, you’ve got to be able to bring the users, the sensors, the clouds, and the controls to the data. The global alternative we have is the ability to solve colocations and the larger data footprint. That’s the genesis behind this.”
PlatformDigital LaunchesDigital Realty says it solves this problem with its decentralized and interconnected architecture via PlatformDigital, which it announced today. The platform provides this consistent, global infrastructure across the company's 210 data centers worldwide.
At launch, customers can deploy four new services on top of PlatformDigital. This includes Network Hub, which consolidates and localizes traffic into ingress and egress points. The second, called Control Hub, hosts adjacent security and IT controls as well as tailored infrastructure deployments matching hyperconverged infrastructure configurations and density requirements for control points. Data Hub localizes data aggregation, staging, analytics, streaming, and data management. And SX Fabric interconnects global workflows and connects hubs across regions. It uses Megaport’s SDN overlay to service chain multi-cloud and B2B application ecosystems.
In addition to its ongoing partnership with Megaport, DigitalRealty is partnering with three other companies at launch for PlatformDigital. Cisco is providing its NFV, switching fabric, and virtual network functions including its next-generation firewall. IBM Cloud provides direct interconnection to its cloud and service providers partners as well as Watson and blockchain services. And Vapor IO, in a partnership announced last week, is providing its SDN fabric to connect Digital Realty facilities with Vapor IO’s edge locations.
IBM is also a PlatformDigital customer, along with Mavenir and agrochemical company Syngenta.
Digital Realty Expands Into Equinix TurfToday’s announcement supports the company’s strategy to attract more enterprise customers and expand into the retail colocation space that Equinix dominates, Bishop said. While Digital traditionally provides wholesale data centers on a long-term lease to hyperscale providers, Equinix focuses on retail colocation and the enterprise market.
But Bishop says his company can take its hyperscale experience and architecture, add enterprise products on top of that, and grow its enterprise customers. To this end Digital Realty recently expanded its Asian presence with a carrier-neutral facility in Seoul, South Korea. It also closed on joint ventures with data center operators in Brazil and India, and last week said it reached an $8.4 billion deal to acquire European colocation giant Interxion — the largest-ever data center merger.
“We see the opportunity to evolve the business, to be more of a true integrated platform company,” he said. “And we feel we have a unique value proposition because we can accommodate interconnection, colocation, and data footprint.”
Over the past year Digital Realty has seen “multiple records in new logo growth, and the majority is coming from enterprise,” he added. “This is us really getting ahead of it with a product solution and experience strategy to say we’re going to be that global partner for you. And if we do it right, it should translate into better results for us.”
Digital Realty says it has spent 15 years and $15 billion building a global data center platform company. But will its $15 billion bet pay off?
Will Its $15B Bet Pay Off?For its part, Equinix says it’s not worried. “We believe Equinix is playing the best hand in the industry,” a spokesperson said in an email to SDxCentral. “Our results reflect a continued strong execution of our strategy and a demonstrated ability to deliver clear and quantifiable value to our customers as they pursue their digital transformation journeys. We do not expect Digital’s acquisition of Interxion will impact our position in the marketplace, and we have expected continued consolidation within the space as others strive to replicate Equinix’s unmatched global scale and reach.”
John Dinsdale, chief analyst and research director at Synergy Research Group, says he expects the two companies to maintain their respective strongholds in retail colocation (Equinix) and wholesale (Digital Realty) — with the one exception being the European colocation market.
“In Equinix and Digital Realty we have two well-run companies that are the clear leaders in the data center market,” he said in an email to SDxCentral. “They are also the clear leaders in data center company acquisitions, which demonstrates both their financial health and their determination to continue aggressively growing their market presence.”
However, Digital has, over the last four years, “aggressively moved into retail colocation via acquisitions,” he said, noting that the Interxion acquisition will double the size of its retail colocation business. “Though even post-acquisition its wholesale business will still be twice the size of its retail business.”
Plus, he adds, Equinix has a more geographically diverse footprint and revenue mix, while Digital is more U.S. focused. After the Interxion deal closes, it will more directly compete in the European retail colocation market.
“Interxion is already the No. 2 ranked company there, behind Equinix,” Dinsdale said. “And the combined Interxion/Digital will help it to narrow the gap.”