Data center provider Equinix recently revealed its partnership with Singapore’s sovereign wealth fund GIC to develop data centers in Japan, according to a report by Reuters. The joint venture, which is valued at over $1 billion, is targeted to Japan’s cloud computing market.
This project will result in the creation of three data centers in total, one in Osaka and two in Tokyo. These infrastructures will be offered to huge businesses. Equinix projects that each center will have around four to six clients each.
Equinix managing director for hyper-scale business Jim Smith explained that other data centers of the same size and scale would cater to hundreds or thousands. By catering to a few clients at each location, the Equinix-GIC partnership will offer more computing power per square foot.
Clarifying what it means to take on only four to six large operators, Smith said, “The physical building might be the same size, but you may have two to three times the energy density, which means more generators, more uninterruptible power supplies, more cooling equipment on the roof.”
Equinix is no stranger to large-scale data centers. Considered the world’s largest data center and colocation firm, it operates over 200 locations across the globe with 9.700 clients. Of these, a good chunk rent connection, power and space, but has their own servers and equipment.
Reuters noted that cloud computing companies including Amazon Web Services, Alibaba Group Holding and Microsoft Corp all funnel funds into building and operating their very own data centers. These also rent out computing power instead of physical space.
While Equinix and cloud-focused companies differ in priority, they interact with each other as cloud firms do business with Equinix by leasing space. This lets them connect with potential customers and even expand their geographic coverage to cover governments’ need to store citizen data within their country’s borders.
By signing the joint venture deal with GIC, which will close later this year, Equinix agrees to own 20% of the equity interest while running the operations. GIC will own 80%.
ZDNet noted that GIC will contribute cash to fund its part of the equity interest. On the other hand, Equinix will use its Tokyo TY12 and Osaka OS2 assets to cover its 20% segment and net cash proceeds which are expected to be a minimum of $100 million. The colocation company will also contribute to the development of rights and land.
