Digital Realty Buys Telx

In a move that shifts its strategy “up the value chain” and obviously positions it against rival Equinix, Digital Realty Trust is buying Telx in a deal valued at $1.9 billion.

The acquisition almost doubles Digital Realty’s  data center “footprint,” but the other important change is access to Telx’s interconnection business. That moves Digital Realty “up the stack” in terms of products.

Digital Realty describes its business as “data center and colocation solutions.” It describes Telx as a supplier of “data center colocation, interconnection and cloud enablement solutions.”

The latter two clauses--interconnection and cloud enablement--represent the move up the stack. The additional facilities will be easy to integrate.

As of the end of March 2015, Telx managed 1.3 million square feet of data center real estate spread across 20 facilities in the U.S., two of which are Telx-owned. Of the rest 11 were leased from Digital Realty.

The announcement comes several weeks after Equinix agreed to pay £2.3 billion ($3.6 billion) for TeleCity, a move that allowed Equinix to create what many would say is Europe's biggest data center company.

Equinix is one of the world's biggest colocation providers and is likely to be one of Digital Realty's chief rivals following the move for Telx.