With $500 Million Funding, Cologix Targets Cloud On-Ramps, SDN

With a half billion dollars from a huge global investor, Cologix is ready to get busy. The colocation specialist is expanding its data center capacity in several key markets, and planning to expand more deeply into network management software.

Last month Cologix announced a $500 million investment from Mubadala Investment Company, the sovereign wealth fund for the Emirate of Abu Dhabi. Mubadala will work with majority shareholder Stonepeak Infrastructure Partners to support an ambitious growth strategy for Cologix.

The investment will accelerate the transformation of Cologix. Just two years ago, the Denver-based company was a regional colocation provider offering interconnection services from modest-sized data centers. It is now a player in the hyperscale data center market, building huge server farms and operating in global markets for finance and energy.

“At the end of last year, we realized we would need additional capital to build out these larger footprints near our interconnection hubs,” said Bill Fathers, the CEO of Cologix. “As the sovereign wealth fund of Abu Dhabi, Mubadala fits all the criteria. They have made significant investments in the data center industry, and were keen to enter North American markets.”

“Cologix is a high-quality company with robust fundamentals in an industry that is growing rapidly and positively impacting the lives of millions of people every day,” said Mounir Barakat, Executive Director of Mubadala ICT (Information and Communications Technology). “This investment marks an important milestone for Mubadala’s ICT business.”

Fathers outlined several areas where Cologix will invest in growth: Interconnection hubs and cloud on-ramps, hyperscale data centers, software-defined networking, and renewable energy.

Building More Data Centers

Private equity firm Stonepeak Infrastructure Partners acquired Cologix in early 2017, calling it “a marquee platform to enter the data center and interconnection market in North America.” Cologix stepped up its growth story last year with the acquisition of COLO-D, a Quebec-based operator of hyperscale data centers, as well as Montreal fiber specialist Metro Optic.

The company is developing its Montreal operations as a model for how interconnection centers, hyperscale facilities, fiber and software can work together as an eocosystem for digital business.

In recent weeks Cologix has announced expansion projects in three markets, adding capacity in Montreal (15 MWs), Vancouver (5 megawatts) and the Dallas Infomart, where it will add a 13,200 square foot facility and 2.25 MWs of power.

The new construction builds upon the existing Cologix footprint of 28 interconnection hubs and 5 hyperscale facilities across 10 strategic North American markets.

The expansions illustrate both elements of the company’s data center strategy. The Infomart is the primary connectivity hub in Dallas, and a key Internet intersection and gateway to Latin American customers. The Montreal and Vancouver projects are hyperscale properties that support cloud growth at both ends of Canada.

In addition to its Canadian cloud hubs, Fathers said Cologix will focus on “hyperscale edge” properties in Columbus, Ohio and Ashburn, Virginia. In each case, the hyperscale facilities will be tethered to Cologix interconnection hubs via high-speed fiber.

“We will stay true to our core strategy of building hyperscale facilities on the back of an interconnection story,” said Fathers.

In Ashburn, Cologix has acquired the current site of the Christian Fellowship Church, and will begin converting the property into a data center campus as the church relocates early next year.  The 23-acre parcel sits next to the world’s largest Internet intersection, immediately adjacent to campuses for Equinix and Digital Realty. The site can support up to 100 megawatts of capacity in three buildings, with a planned first phase of 32 megawatts.

“We’re effectively shovel-ready,” said Fathers. “We have a design and finance package. It sure feels like there’s a lot of supply at the moment, and that’s reflected in the pricing. I don’t see us building speculatively in that market.”

Focus on SDN and Network Provisioning

Cologix also wants to become a global leader in cloud connectivity and software. In April the company launched the Cologix Access Marketplace, a software-defined networking (SDN) connectivity platform offering virtual cloud on-ramps via Amazon Web Services Direct Connect and Microsoft Azure Express Route. The service allows Cologix customers to quickly provision network services using a software portal.

Fathers has plenty of experience in cloud software and virtualization from his tenure as Executive VP of Cloud Services at VMware. He says Cologix now has more than 30 developers working in its software operation.

The Cologix Access Marketplace “supports our core vision, helping customers build and scale their businesses dynamically with on-demand, direct cloud access,” said Fathers. “We are simplifying interconnection processes and improving our product offering with a self-serve, SDN tool for enterprises to respond to their changing business needs with real-time provisioning, easily scaling up and down as needed.”

“We have ambitious plans for the future, and by partnering with Mubadala we have additional growth capital that will enable us to get to the next level”
Cologix CEO Bill Fathers

“We see a huge amount of interest in access to public clouds,” Fathers added. “There’s a much bigger universe of customers that want access to these clouds.”

“We have ambitious plans for the future, and by partnering with Mubadala we have additional growth capital that will enable us to get to the next level,” said Fathers.