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Billion Dollar Unicorns: Global Switch Wants to be Leader in Data Centers

Posted on Wednesday, Mar 1st 2017

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According to a report by Research Beam, the Global Data Center Market is estimated to grow at 10.7% annually through the period 2016 to 2020. The growth in the industry is attributed to the increasing demand among organizations to move to virtualization and automation while demanding higher operational efficiency. London-based Global Switch is a Billion Dollar Unicorn player in the data center industry.

Global Switch’s Offerings

Global Switch is the leading owner, operator, and developer of large-scale, multi-tenanted carrier neutral data centers. The company was founded way back in 1998, when the digital world was still in a nascent stage. Since then, Global Switch has grown to own and operate ten data centers located in Tier 1 cities across Europe and Asia-Pacific regions.

It offers nearly 300,000 square meters of technical space to multiple private and public organizations. Its data centers allow these organizations to integrate seamlessly across multiple telecom, Internet, and cloud service providers. Global Switch’s data centers provide customers with access to data center capacity with features such as redundancy, 24x7x365 power and cooling facilities, high levels of connectivity, security, and sophisticated infrastructure and environmental monitoring to house computer servers, network equipment, and IT infrastructure. All its data centers are operated to a Tier III + standard that requires dual-powered equipment, multiple uplinks, and fault-tolerant equipment. To date Global Switch’s data centers have demonstrated more than 99.999% uptime across the portfolio.

Global Switch’s Financials

Global Switch does not disclose its financial details. It had last revealed its revenues back in 2014 when it ended the year with revenues of £358.4 million (~$445.5 million). But it can be safely assumed that it is a financially prudent company on the basis of its credit ratings. In 2014, Fitch upgraded Global Switch from a BBB credit rating to BBB+, making it the highest credit rated data center company in the world. Soon, Moody’s also upgraded its long-term issuer rating for Global Switch to Baa2. Standard & Poor’s has maintained its credit rating at BBB for the company.

Prior to December 2016, Global Switch’s majority stake was held by Aldersgate Investments, a firm owned by David and Simon Reuben. In December, Aldersgate sold 49% of its stake to a consortium of private sector Chinese investors called Elegant Jubilee. The consortium was assembled by Daily-Tech founder Li Qiang and led by the Jiangsu Sha Steel Group. The stake was sold for a cash consideration of £2.4 billion pounds (~$2.96 billion), valuing the company at $6 billion.

Global Switch’s Growth

According to Structure Research, Global Switch is the second largest wholesale data center co-location provider with a 7.7% market share of the global market. The industry is led by San Francisco-based Digital Realty Trust, which accounts for 20.5% of the market.

Global Switch plans to bridge the gap between the players through continued expansion. It currently has six new data centers set to be released soon. It is growing its presence in China and recently entered into a joint venture agreement with Daily-Tech Beijing Co., Ltd to develop a new data center in Shanghai hoping to narrow the gap between itself and Digital Realty Trust.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Photo Credit: Nigel Hardy/Flickr.com

This segment is a part in the series : Billion Dollar Unicorns


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