Verizon sells its data centers to Equinix for $3.6B

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Telecommunications giants Verizon and CenturyLink have each now sold off their data center assets, with Verizon being the most recent to offload its infrastructure operations to Equinix in a $3.6 billion deal.

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The moves represent a trend among telecommunications to get out of the business of managing data centers, but still offering customers managed services and cloud offerings from data center space they lease.

The data centers Verizon is selling are used primarily to host colocation, enterprise and government customers, the company said. Some of Verizon’s co-location customers that operate out of the data centers will be transferred to become customers of Equinix, Verizon spokesperson Janet Brumfield said. Other managed service and cloud customers will keep their Verizon accounts. “Instead of owning the data center space for the provisioning of Managed Hosting and Cloud Services, we will lease it from Equinix,” Brumfield added. “We will lease space from Equinix as needed to meet the global communications needs of our enterprise customers.”

The sale of the assets is expected to close in mid-2017.

Equinix operates data centers around the world for its colocation and interconnection business and is purchasing 24 sites that have a total of 29 data centers in 15 metropolitan areas from Verizon. The acquisition brings Equinix’s total data center footprint to 175 in 43 metro areas. Verizon is keeping its data centers in 27 sites across Europe, Asia and Canada.

The news comes on the heels of the early November announcement by CenturyLink that it would be selling its data center and colocation business to a group of investors for $2.15 billion in cash. The purchasing group is made up of funds advised by BC Partners, Medina Capital Advisors and Longview Asset Management. CenturyLink sold off 57 data centers.

Both CenturyLink and Verizon say they’re still committed to providing customers with cloud and data center services, interconnections and networking products. It just won’t own the infrastructure that powers those operations.

NOTE: This story was updated with information from Verizon regarding its planned leasing of data center assets from Equinix.

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