Vantage Data Centers is going global with a $2 billion push into Europe, acquiring service provider Etix Everywhere along with land parcels in five markets.
The expansion is backed by the resources of Digital Colony (part of Colony Capital), and positions Vantage as a player in second-tier markets across Europe. Vantage now has a large campus in the strategically important Frankfurt market, along with land for greenfield data center campuses in Berlin, Milan, Zurich and Warsaw, Poland.
“As data center demand from our customer base continues to rapidly increase worldwide, Vantage is embarking upon its largest expansion ever into Europe through the development of five strategic markets.” said Sureel Choksi, president and CEO of Vantage, which specializes in wholesale data center development. “The acquisition of Etix accelerates our expansion to Frankfurt, Europe’s highest growth hyperscale market.”
Hyperscale customers are driving the expansion, but the inclusion of second-tier markets reflects Vantage’s view that cloud providers will spread their data centers across more countries. The GDPR privacy law and Brexit are among the factors driving this data localization, Choksi said.
The entry into Europe is the latest facet of an ambitious expansion for Vantage, which will have data center campuses in 11 markets by the end of 2020. Vantage Data Centers launched in 2010 with a campus in Santa Clara, and in 2017 was acquired by Digital Bridge to serve as a platform for a larger expansion into the wholesale data center industry.
Under the ownership of Digital Bridge (now part of the Colony Capital digital infrastructure empire) Vantage began developing large campuses in Northern Virginia and Phoenix. In 2018 Vantage acquired Canadian provider 4Degrees Colocation, providing a data center footprint in the power-rich market in Quebec. Europe was the next step.
“We’ve been working on this expansion for more than a year,” said Choksi. “It’s been driven by the same strategic accounts, the hyperscalers and large accounts that make up 90 percent of global wholesale data center demand. We’ve been in discussion with these strategic accounts about where they see growth, and where they have a lack of choices.”
Etix Deal Leverages Frankfurt Opportunity
ETIX Everywhere is a global colocation provider based in Luxembourg that was created in 2012 by CEO Antoine Boniface and Charles-Antoine Beyney. Financial terms of Vantage’s acquisition of Etix were not disclosed.
Etix created modular components for repeatable designs that can be deployed in building blocks for data center infrastructure. Etix Everywhere has focused on “smart cities” projects in second-tier markets in Europe and Africa, as well as blockchain and high-performance computing (HPC) infrastructure in Iceland and Sweden.
Recently Etix Everywhere has shifted its focus to hyperscale development, including a campus in Offenbach, Germany to provide data center capacity for Frankfurt, the financial capital of mainland Europe. Vantage was scouting for locations, and was intrigued by the possibilities of a combination.
“The top market on our list was Frankfurt,” said Choksi. “It’s a very difficult market to solve. Etix uniquely had lined up a site and power for a 55-megawatt hyperscale campus in Offenbach, less than one kilometer from the Interxion campus (a key interconnection hub). That was incredibly attractive, and they also have a pipeline of potential customers.”
Boniface has joined the Vantage executive team to serve as president, Europe. In addition, Josh Buis, who joined Vantage in 2019 as vice president, international business development, will take on an expanded role as senior vice president, sales and business development, for Europe.
“The experience that Vantage brings with North American-based hyperscale, cloud and wholesale customers, combined with Etix’s European experience and Frankfurt hyperscale campus, creates a compelling platform that is ideally positioned to serve customers across Europe,” said Boniface.
GDPR, Brexit Guide Second-Tier Strategy
In addition to the acquisition of Etix, Vantage also unveiled plans to develop greenfield hyperscale data center campuses on land it has bought in four second-tier European markets:
- Berlin: 64MW campus on 13 acres (5 hectares)
- Milan: 32MW campus on 17 acres (7 hectares)
- Warsaw: 64MW campus 12 acres (5 hectares)
- Zurich: 40MW campus on 7 acres (3 hectares)
Vantage is pursuing a different European strategy than other large wholesale specialists, who are primarily targeting the “FLAP” markets – Frankfurt, London, Amsterdam and Paris (along with long-time cloud hub Dublin).
“We believe that there is lots of opportunity, both in Tier One markets and emerging Tier Two markets,” said Choksi. “We’re responding to our customers.”
Those second-tier European markets are business hubs with fewer data center providers than seen in the FLAP hubs. Choksi said this is part of the strategic opportunity for Vantage.
“As in North America, (our strategy) is a combination of supply and demand and the competitive landscape,” said Choksi. “It’s not simply a strategy of ‘let’s go where there’s less competition.’ Over the last five years we’ve seen the emergence of the FLAP markets. Now what we’re seeing is that because of GDPR, and Brexit, enterprises desire to keep their data in country. Because of this localization of data, we see growth in these other markets as well.”
Digital Colony Supports Global Expansion
Vantage intends to invest $2 billion in its planned European expansion, including more than $800 million in new equity capital provided by Vantage’s current investors and a new commitment from Digital Colony Partners, a joint venture between Digital Bridge and Colony Capital. Vantage will also seek to borrow up to an additional $1.2 billion to fund its European expansion.
“Vantage’s expansion into Europe is the company’s next step in becoming a premier, global hyperscale data center provider,” said Marc Ganzi, CEO of Digital Colony. “We are excited to support their team, their customers and their growth plan, and fueling Vantage Europe’s rapid build-out.”
“Marc Ganzi and the Digital Bridge/Digital Colony team have been phenomenal partners and supporters of Vantage,” said Choksi. “They are exclusively focused on digital infrastructure and have a global mandate. They’re very long-term focused, with a deep understanding of the industry. They have been working on Europe for a long time, so we were quickly able to leverage their expertise.”
The Vantage Frankfurt site is already under construction, with the first data center scheduled to be delivered in late 2020. Choksi said Vantage will begin development at the other sites this year, with some work beginning in as soon as 60 days.
“Our focus going forward is going to be on hyperscale,” said Choksi. “It’s a Vantage design, the same building blocks with 8 megawatt systems.”