Insight Bite: Bare Metal Cloud Market Heats up as Equinix Buys Packet

The bare metal cloud market is booming as datacenters look to better serve enterprise customers with this flexible form of server infrastructure.

Equinix, which dominates the colocation market with more than 200 datacenters in 55 markets worldwide, has announced intentions to acquire New York City bare metal cloud startup Packet. The deal value was not disclosed, but Packet has previously been valued at £77 million.

The purchase will give Equinix deep expertise in bare metal cloud servers, which are installed directly on the server hardware and give customers greater freedom to tailor systems without having to run their own datacenters. This is particularly useful for the specific requirements of Internet of Things (IoT) and Edge computing projects.

Packet prides itself on offering some of the most flexible bare metal services on the market, giving Equinix a great opportunity to move away from the off-the-shelf approach:

“By acquiring Packet we are making it easier for enterprises to seamlessly deploy multi cloud solutions at Equinix and extract greater value from our rich ecosystems and global interconnection platform.” said Equinix Chief Product Officer Sara Baack. “Packet’s innovative and agile bare metal service, and neutral approach to software stacks, fit our own cloud-neutral model and match our strategy for helping enterprises flexibly deploy digital infrastructure.”

Following the acquisition, Packet will continue operating as before, but will take advantage of Equinix’s vast resources to more effectively scale. This gives the firm a better chance of commanding a larger share of the burgeoning datacenter colocation market, which grew at a CAGR of 12.4% from 2015 to 2020.

This growth is spurred by demand from cloud giants like Amazon Web Services, Google Cloud, and Microsoft Azure, that increasingly do not want to own or operate their own datacenters because of the high costs, but still want to be able to offer purpose-built bare metal servers to their customers.

In response to the demand, datacenter providers like Equinix are buying up other colocation companies to expand capacity. Just four months ago, colocation giants Digital Realty and Interxion embarked on a plan to topple Equinix’s dominance with a $8.4bn mega-merger that is likely to be the biggest deal in datacenter history.

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