News

Telecity acquires Dublin’s Data Electronics Group
August 8, 2011
Telecity acquires Dublin’s Data Electronics Group

Telecity has announced the acquisition of Dublin’s leading and longest established colocation provider Data Electronics Group.  The privately held company was bought for just under £90m and operates two data centres offering a combined capacity of 4600 sq m or about 4MW of customer power.  The two DE sites are located at Kilcarbery Park, almost due West of central Dublin and the newer and potentially larger site is at Ballycoolin, a bit further north.  Data Electronics acquired the Kilcarbery Park facility through their own acquisition of US company Inflow’s Irish assets back in 2002.  Ballycoolin has the potential to offer up to 10,000 sq m of capacity, so a huge site in the Dublin market and thus this is where the long term potential for Telecity will come and interestingly, this will refocus the DE operations away from a company that has really forged its reputation and model on running managed services towards that of “plain vanilla” colocation.

Telecity’s own history in the Irish market is one which harks back to the dot-com boom, where Telecity had the early initiative when they won the bid to host the government sponsored Global Crossing deal (which ensured the new AC1 system didn’t simply by-pass the country on its way from the US to the UK and then on into Europe).  However, during the industry downturn in 2004 Telecity in fact assigned their lease and became a tenant of ESAT, a rival to Eircom (the local incumbent operator) who have since been acquired by BT.  This deal left Telecity with a tiny (by their standards) 1000 sq m site, hence the need for a deal to fully establish themselves as a serious operator in the Irish market once again.

Deal represents consolidation in the Irish Market from 4 to 3 colocation operators

As our country description surmises, there were only four colocation operators in the Irish market and you’d have to say it is Interxion, who were the only “active” pan-European operator in the Dublin market after Telecity’s consolidation that will feel the most challenged by Telecity’s deal, especially given the potential capacity Telecity can light up at Data Electronic’s Ballycoolin site.  Interxion have two sites both located at Park West Business Park and offer nearly 3,000 sq m of capacity.  The other retail focussed operator remains Servecentric who are based in the Digital Realty site in Blanchardstown which again, is also a well established site.

More deals to come for Telecity

Telecity have made it clear that further acquisitions remain on the cards for the company and this deal follows on from the company’s acquisition of Manchester based IFL a year ago in the summer of 2010.  As a bit of fun it might be worth speculating other geographic gaps in Telecity’s coverage that might also suit an acquisition:

Possible Geographic Targets for Telecity’s next deal – Colo-X Estimates

Location

Colo-X Comments

Belgium

LCL?

Spain

No obvious targets as local operator Carrier House part of huge Spanish conglomerate Abengoa group, but who’s to say a deal couldn’t be done?

Switzerland

A crowded small market, with Equinix dominant in Zurich and Geneva and Interxion also competing in Zurich

Scandinavia

Telecity dominates Sweden, but Norway though a small market has one leading local operator Digiplex and in Denmark the market is divided between Interxion and a local carrier Global Connect.

Eastern Europe – Prague, Budapest?

Redbus (acquired by Telecity in 2005) actually built and opened a data centre in Prague that was promptly deluged when the Danube flooded in 2002; a fortunate exit was thus gratefully taken by the consolidating company. Trestel is the leading carrier node in the country. In Budapest, the former CityReach site Dataplex remains probably the largest single data centre in Easter Europe. Dataplex is now part of T-Systems and indeed a return to non-carrier owned status would be a boost for this well established facility.


In terms of the pan-European market you’d have to say Interxion looks the company most exposed to Telecity’s growth into new markets, as Interxion has unique and unrivalled positions as the sole specialist carrier neutral operator in a number of European markets, namely Vienna, Copenhagen, Brussels and Madrid.  Clearly the arrival of Telecity would provide more competition, as will be the case in Dublin.


Possible Geographic Targets for Telecity’s next deal – Colo-X Estimates

Location

Colo-X Comments

Belgium

LCL?

Spain

No obvious targets as local operator Carrier House part of huge Spanish conglomerate Abengoa group, but who’s to say a deal couldn’t be done?

Switzerland

A crowded small market, with Equinix dominant in Zurich and Geneva and Interxion also competing in Zurich

Scandinavia

Telecity dominates Sweden, but Norway though a small market has one leading local operator Digiplex and in Denmark the market is divided between Interxion and a local carrier Global Connect.

Eastern Europe – Prague, Budapest?

Redbus (acquired by Telecity in 2005) actually built and opened a data centre in Prague that was promptly deluged when the Danube flooded in 2002; a fortunate exist was thus gratefully taken by the consolidating company. Trestel is the leading carrier node in the country. In Budapest, the former CityReach site Dataplex remains probably the largest single data centre in Easter Europe. Dataplex is now part of T-Systems and indeed a return to non-carrier owned status would be a boost for this well established facility.

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