Equinix, a leading provider of colocation services, says it has closed its acquisition of bare metal cloud provider Packet for $335M in a deal announced in Jan.
The colocation giant's platform-building endeavor enters a whole new phase. — Equinix has closed its acquisition of Packet …
Context & Ripple Effects
This close converts Equinix's January agreement to buy Packet into ownership of a bare-metal automation layer that sits on top of its own colocation footprint — the first time the company has bought software capability rather than buildings. It extends an M&A arc that began with the $3.6B Telecity buyout in 2015, which made Equinix a global landlord, and that later added geographic reach through the MainOne acquisition and the atNorth deal with CPP Investments.
Packet matters because it was built to give developers cloud-style APIs over physical servers, positioning itself against AWS and Azure since its $25M Series B led by Third Point Ventures. For Equinix, buying it is a bid to stop being just the building under someone else's cloud.
First-order effects
- Packet's ~$36M in venture backing exits via a $335M sale to Equinix, and its bare-metal provisioning stack becomes an in-house product layer across Equinix's data centers.
Second-order effects
- Rival colocation operators now face a competitor that can sell automated server instances directly, not just racks and power — pressuring them to acquire or build equivalent orchestration software or cede developer-facing workloads to Equinix.
Third-order effects
- If the pattern holds — Telecity for scale, Packet for software, MainOne and atNorth for reach — colocation consolidates into vertically integrated platforms where interconnection and automation, not floor space, are the priced product.
The trend: Data center operators are acquiring their way up the stack from real estate into software-defined infrastructure, with Equinix's Packet, MainOne, and atNorth deals marking successive rungs.