Global Crossing Back in the Colo Biz?

So they really meant it…  In late 2007 and early 2008, Global Crossing said they were going to leverage Impsat’s hosting and colocation business in an expansion to Europe, and today’s PR ^[1] suggests they are having some success.  Of course, Global Crossing was last seen in the colocation and hosting business back in October of 2000, when they sold their GlobalCenter division to Exodus ^[2] at the end of the bubble.  For those keeping score, Exodus then went bankrupt within a year, got bought by C&W USA, which in turn went through bankruptcy and got bought by Savvis – where it lives today.

So what possessed Global Crossing to re-enter this deadly game?  Well, obviously they must have noticed that colocation and hosting are growing like gangbusters lately ^[3] – I mean who hasn’t?  They are entering the market rather cautiously but also inexpensively, pulling unutilized real estate out of their restructuring reserves and putting it to use.  According to their PR, they have sold much of the space they initially built out so they are building out more.  And they are rolling out more managed services and such.

Sounds interesting, but we should realize that all this is still on a fairly small scale – certainly not enough to really affect growth on their $2.5B in revenue yet.  To enter the colo business in any real way Global Crossing will need to spend real money, the kind that Savvis and Equinix are putting into new modern facilities now.  This step should be seen as an opportunistic foot in the door, it will be interesting to see whether they are willing to put a shoulder into it as well.