REPORT REPRINT

Equinix enters India’s

datacenter market with
acquisition of GPX
AUGUST 11 2020
By Dan Thompson, Jia Lyn Low
Announcing its second geographic expansion in the past two months, Equinix has picked up the India-
based datacenter operations of GPX Global Systems. GPX India’s focus on interconnection and internet
exchanges should fit well in the buyer’s portfolio, while also giving it a larger presence in the fast-
growing market.

THIS REPORT, LICENSED TO EQUINIX, DEVELOPED AND AS PROVIDED BY 451 RESEARCH, LLC,
WAS PUBLISHED AS PART OF OUR SYNDICATED MARKET INSIGHT SUBSCRIPTION SERVICE. IT
SHALL BE OWNED IN ITS ENTIRETY BY 451 RESEARCH, LLC. THIS REPORT IS SOLELY INTENDED
FOR USE BY THE RECIPIENT AND MAY NOT BE REPRODUCED OR RE-POSTED, IN WHOLE OR IN
PART, BY THE RECIPIENT WITHOUT EXPRESS PERMISSION FROM 451 RESEARCH.

©2020 451 Research, LLC | W W W. 4 5 1 R E S E A R C H . C O M

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Introduction Snapshot
Equinix, the world’s largest multi-tenant ACQUIRER Equinix
datacenter (MTDC) provider in terms of
annualized revenue, has announced the TARGET India operations of GPX Global
purchase of GPX Global Systems’ India- Systems (GPX India)
based operations, GPX India. The deal SUBSECTOR MTDC
represents the buyer’s entry into the
DEAL VALUE $161m
fast-growing Indian datacenter market.
GPX India’s focus on interconnection DATE ANNOUNCED 11-Aug-20
and internet exchanges marries well with CLOSING DATE, Q1 2021
Equinix’s focus on interconnection, and EXPECTED
the available square footage the firm has ADVISERS J.P. Morgan Securities (Equinix)
in its newest facility sets up Equinix well
to be able to sell into the market pretty immediately after closure. A just-published report from 451
Research forecasts that the datacenter market in India is expanding at a compound annual growth
(CAGR) rate of 23%, roughly three times faster than the overall industry.

451 TAKE
India is currently undergoing an impressive growth spurt, 23% CAGR (2017-2022),
matching China’s growth for that same timeframe (for reference, the global average is
7%). Based purely on announced projects and projects currently underway, the Mumbai
market is set to double in size by the end of 2021 (assuming all of those projects come
through on time – something that the Indian market has admittedly struggled to do in
the past). Mumbai, the specific metro Equinix is entering through this acquisition, has
the lion’s share of new datacenter space in India. We estimate the city’s datacenter
market to have a CAGR of 22% for 2017-2023. All of this growth can be attributed to
several things, but particularly of note are India’s expected data sovereignty laws, as well
as the entrance of the global cloud suppliers to the country’s various sectors. Mumbai
specifically continues to enjoy solid demand as the country’s financial capital, even as
providers move further inland via Navi Mumbai and beyond in search of bigger land
parcels at lower prices.

Equinix is joining the India datacenter scene at a busy time, but in a very familiar way.
The company has entered, or bolstered its position in, markets through purchases of
connectivity-focused providers several times, so this should be considered a regular
move in its playbook by now. Equinix unsurprisingly states that it has been asked to go
into the market by its customers, and when paired with buying a company with existing
interconnection-based demand, this transaction seems less risky than a vendor entering
the sector by building its own facility and starting from scratch. Equinix will certainly
expand the capabilities and options available for GPX India’s existing customers, or
perhaps consolidate the number of vendors those clients use by one, as many will likely
be the acquirer’s customers in other markets already.
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Deal details
Equinix is paying $161m for the India operations of GPX Global Systems (the firm also has assets
and a business in Egypt, which are not part of this deal). The transaction includes GPX India’s two
datacenters located in Mumbai, which brings with it tenants of 12 carriers, four internet exchanges
(Mumbai IX-DECIX, AMS-IX India, Extreme IX and Bharat IX), cloud onramps for AWS, Google Cloud
and Oracle Cloud Infrastructure, as well as a host of internet service providers, smaller cloud players
and CDNs, among others. The buyer indicated that it is paying 15x EBITDA for the India operations, at
full utilization.

Target profile
New York City-based GPX Global Systems has been active in the Indian datacenter market since 2012.
The firm’s first datacenter in the country, Mumbai 1, hosts several carriers, internet exchanges, internet
service providers and. more recently, cloud onramps, putting it in a fairly unique position within India’s
datacenter landscape. GPX’s most recent facility, Mumbai 2, extends the capabilities and connectivity
of the first datacenter by way of direct connected fiber. The interconnection-oriented provider is
extremely focused on its connectivity ecosystem, making it a good fit for Equinix.

The Mumbai 1 facility opened in 2012 and contains 30,000 square feet of operational space and
2.6MW of critical power. That datacenter is now full, however, prompting the opening of Mumbai 2
in November 2019. Mumbai 2 added twice the capacity of the original facility to the market, housing
60,000 square feet of operational space and 6MW of critical power, once both phases are completely
built out. When we visited the Mumbai 2 facility in March, it was reportedly only at roughly 25%
capacity, leaving Equinix plenty of room to sell into it.

Acquirer profile
Founded in 1998, Equinix was originally launched to address internet traffic exchange challenges
for network service providers and carriers. The company established internet exchange points by
creating a neutral point for aggregating networks in an impartial facility. Although it offers traditional
colocation services, it specializes in highly network- and cloud-dense facilities. To achieve this, Equinix
offers interconnection services within its datacenters, giving customers access to a wide range of
network and connectivity options. The resulting ecosystem of service providers and partners enables
connectivity to over 2,900 cloud and IT service suppliers, more than 1,800 networks, and 800+
content and digital media firms across a global platform.

Equinix is well represented in Asia-Pacific, but prior to this acquisition was notably missing from the
Indian subcontinent. The provider maintains the retail market lead in terms of operational square feet
in Singapore, Hong Kong and Sydney, is among the top five providers in Tokyo and Indonesia, maintains
a presence in Osaka and Shanghai, and has recently entered the Seoul market as well.

Competition
Equinix is entering the fairly crowded Mumbai market, with lots of suppliers currently building out
space and several newcomers joining the fray. Although not specifically focused on interconnection,
GPX India competes (and Equinix can expect to) with specialized homegrown datacenters and MSPs
such as NTT Netmagic, CtrlS Datacenters, Sify Technologies and ST Telemedia, all of which have a very
active presence in the region and are the current market leaders. Furthermore, five new players are set
to enter the datacenter market in Mumbai this year or next, adding to the congestion. That said, GPX
India and now Equinix have a somewhat uniquely positioned offering, and Platform Equinix will bring a
new sophistication to the interconnection options currently available in the country.