Still investing in Turkey
Foreign direct investment (FDI) is one of the key figures that tells us how a certain country is seen by outsiders. If the FDI is high it means the perception of the country by the outsiders is rather positive. It also means confidence in that country’s economy is high. In the last couple of years, the FDI has slowed down for Turkey. There are not as many foreign direct investments as there used to be.
However, there are still some firms who firmly believe in Turkey’s future. I think those firms that keep on investing in Turkey will gain a lot more in the long run.
I cannot mention all the firms that keeps on investing in Turkey but lately, one of them has really attracted my attention. Equinix.
I had first heard about them when they bought a data center in Istanbul for $93 million. However, when I looked them up, I discovered how little I knew about global internet traffic.
According to www.reit.com, Equinix, which is based in Redwood City, California, is the world’s largest data center company, with revenues of $3.6 billion last year and a $33 billion market cap in April. It has nearly 180 centers in 44 major markets in 22 countries and rents server space to 9,500 different customers—including the world’s largest networks, cloud computing platforms and business enterprises. An estimated 70 to 80 percent of the world’s internet traffic passes through servers renting space in its data centers daily. When you send an email, stream a video on Netflix or post something on LinkedIn, chances are your digital traffic passes through an Equinix center somewhere on the planet.
I had the opportunity to attend their press briefing and later on have a conversation with Equinix’s EMEA President Eric Schwartz. I asked him about the logic of investing in Turkey and he said they believe in Turkey’s potential. He added that they would serve local enterprises and financial services in Turkey and would support the growth of multinationals in Turkey and the region. He said Istanbul is a key traffic route for submarine cables between Europe, the Middle East and Africa.
The Equinix executives also mentioned in their presentations that in Turkey, there is a rapidly growing IT services market with Europe’s fifth largest digital population. Turkey has critical economic and geopolitical importance. It is the third fastest growing economy in the G20.
This development is in line with the IDC’s predictions. According to the IDC’s 2018 reports, there is a clear trend of movement of internal data centers to service provider data centers. Enterprises are moving their IT infrastructure from their internal data centers to service provider data centers that are located close to large telecom hubs and population centers.
We also discussed the usage of Blockchain in Turkey with Schwartz and he underlined that they are very keen on working with Blockchain companies from Turkey, as Blockchain means reliable infrastructure and that is exactly what they are promising.
I personally think Equinix’s data center investment can make the way of foreign companies like PayPal to return to the Turkish market. If you remember, they left the Turkish market after a legislation passed requiring the data produced in Turkey to physically remain in Turkey. If they work with Equinix globally, then maybe they would reconsider entering the Turkish market. I guess, we will have to wait and see.