Mergers and Acquisitions, CSPs, Enterprise, Mergers and Acquisitions

Equinix Acquiring Verizon Cloud Data Centers for $3.5B?

Equinix (NASDAQ: EQIX) is likely poised to acquire Verizon's (NYSE: VZ) data center business for $3.5 billion, according to Cowen & CO. Neither Equinix nor Verizon confirmed the report.

Updated December 6, 2016: Equinix confirms Verizon Data Center acquisition for $3.6 billion.

Verizon has been trying to sell the data centers for at least $2.5 billion in an auction process since early 2016 or perhaps even late 2015. During a July 2016 earnings call, the telco giant said it would likely have clarity on the pending sale process by October 2016.

Verizon, like many telcos, once hoped to be a cloud services giant that competes alongside Amazon Web Services, Microsoft Azure and other public clouds. But telco corporate cultures -- based on highly regulated legacy industries -- couldn't keep pace with public cloud providers. Rival CenturyLink also is attempting to sell its cloud data centers.

Equinix In A Buying Mood?

Rumors about Equinix potentially buying Verizon's data centers aren't new. Equinix has a strong position in the cloud market. The company emphasizes secure, high-performance network connections between businesses, cloud providers, hosting providers, co-location companies and more.

In an August 2016 earnings call, Equinix CEO Steve Smith said the company's cloud efforts were gaining channel momentum.

Equinix poured the foundation for its partner program last year. The company in February 2015 hired RackSpace and ViaWest veteran Christopher Rajiah as VP of channel sales and alliances. By March 2015, Rajiah unveiled a formalized partner program for MSPs, network service providers (NSPs), systems integrators and solutions providers.

It's unclear if Equinix truly plans to buy Verizon's cloud data centers. But we're watching closely for new developments and will update this story accordingly.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.