Following up on the network M&A article before Christmas, it's time to take a similar look at consolidation within the colocation and cloud marketplace during 2013. Here is a quick look at the deals of the year, organized by the underlying trend they were a part of
Network and infrastructure operators buying cloud infrastructure, services, and talent -- This year saw a series of network and infrastructure operators acquiring colo and cloud assets or talent, clearly gearing up to take on new markets.
- Japan's NTT made a series of such moves on multiple levels this year. At the raw colo level they purchased RagingWire, for cloud-focused communications services they bought Virtela, and at the cloud services level it was Arkadin. Put all those square feet, employees, and pipes together and NTT is betting big on its cloud capabilities in the US and Europe.
- CenturyLink made two moves tightly focused on bringing in advanced platforms and cloud-focused talent, acquiring both AppFog and Tier 3. In many ways, it makes a lot of sense for an ILEC to bring in talent this way rather than try to grow nextgen ideas out of their telecommunications roots, so long as they can keep from choking it off. They've done pretty well on that front with Savvis so far though.
- To the north, Rogers took a more infrastructure-heavy tack and acquired mainly data center infrastructure itself. They bought BlackIron Data from Primus earlier in the year and then followed up by buying Pivot and Granite.
- Internap, which straddles the IP transit and colocation segments, added more cloud hosting capabilities with the purchase of iWeb.
- Zayo continued on the same path it has been blazing, marrying interconnection-focused data center assets with its fiber networks rather than move into the cloud itself. They bought Core NAP in Austin and apparently added CoreLink as well although they haven't announced it yet by name.
- And before it acquired Inteliquent's data network GTT also made a move on the cloud with the purchase of IDC Global's data centers and connectivity out in Chicago.
Pure colocation and datacenter real estate relatively quiet: The big carrier-neutral data center operators were focused mostly only organic opportunities and ecosystem development, but there were a few interesting deals. OneWilshire out in Los Angeles got a new owner, with GIPartners taking over. Equinix made another buy in Frankfurt by acquiring Kleyer90. But the most active pure colo buyer of the year was perhaps QTS, which bought large facilities in both Dallas and Sacramento before having their IPO and becoming the latest publicly traded REIT.
Self consolidation in cloud-based communications. Another trend we have been seeing in the second half of 2013 is consolidation amongst the providers of cloud-based communications, i.e. what we used to call VoIP. After years of trying to prove the consumer voice market to be viable, Vonage finally took a step over onto the SMB side of the tracks by buying Vocalocity in October. Meanwhile, those already tightly focused on the business VoIP opportunity were feeling confident enough to look at European expansions. In the last two months we saw 8x8 purchase Voicenet, Canada's Mitel and Aastra announced a merger, and Broadsoft is buying Germany's finocom AG. Other deals such as Momentum's purchase of Twist over the summer show additional consolidation aimed at geographical expansion.
Diverging Cloud-based Optimization and CDN Trends - There weren't many deals to look at in in the content delivery space, but the ones that did happen suggest that the various players have very different ideas about where to go from here. The biggest deal was of course Verizon's planned purchase of EdgeCast, which suddenly puts one of the world's largest service providers into the market already at scale. Meanwhile Akamai continued to pad the higher end cloud services part of its business by buying Prolexic for deeper cloud-based security offerings, decreasing its reliance on the core CDN business itself. But Limelight moved in the opposite direction, announcing the sale of Clickability and refocusing its business more tightly on the core CDN and optimization side of things. What this suggests to me is that the industry is in flux, and we may see a rapid evolution next year.
Anything I missed? Please tell me so in the comments below. I will probably have one last 2013 M&A review article still, focused on the big international deals (e.g. in wireless) you probably wondered why I didn't bother to mention yet given the way they dominated the news. Don't worry, I'll get there.