Colocation

Bank Street on Colo M&A: Consolidation Means More Players than Ever

In the eighth of our “8 Megatrends” series, we sat down with Richard Lukaj, Senior Managing Director, Bank Street, to discuss how mergers and acquisitions (M&A) have affected the colocation market over the last few years, and to understand what the imminent solution model may look like.

Bank Street is a private investment banking firm serving the communications, media and technology sectors with M&A Advisory, debt and equity financing and restructuring advisory.  Having worked in M&A for two decades, Richard has deep understanding into how such deals impact each segment’s marketplace.

As emerging technology ecosystems are always subject to ebbs and flows, colocation is no exception. There has already been a considerable amount of consolidation, but Richard says, “While there’s a smaller universe of players, that universe is still bigger than ever before.”

In parallel, the size of transactions has grown significantly and is continuing to have an impact. That said, he doesn’t foresee a single approach taking over, but rather a constantly mixed model. The firm believes enterprises will seek public, private and hybrid deployments depending on their needs.

And while business requirements are likely to change over time and, in turn, cause colocation tactics to change, Richard says providers won’t lose if they have the right balance of products in the mix. Instead, they’ll be able to deliver a different service model to the same customer within the same facility.

In fact, enterprises are still in the early stages of migrating their centralized computing needs — and since there’s no once size fits all, demand for both retail-centric and wholesale providers will remain.

Large and small centers will be necessary for provisioning the edge too. How so? Richard says, “Similar to what we saw in cloud adoption, edge is an exciting contribution to the ecosystem. But it doesn’t obviate the need for infrastructure already deployed. In fact, edge will create a need for incremental capacity.”

Get Richard’s full perspective on the colocation market in this video interview.

Learn more about these important data center megatrends.

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