Equinix is tripling its Melbourne capacity with a $39 million expansion of its data center.

The expansion is to meet what the US-based interconnection and data center company says is increased demand for cloud services in Melbourne, with the facility currently having more than 70 customers, including Microsoft ExpressRoute, Telstra, Vocus and Symantec.

The expansion will see ME1 gain an additional 375 cabinets in the fourth quarter of this year, with another 375 cabinets added in Q1 of 2016, bringing the total number in the facility to 1125.

Jeremy Deutsch, Equinix Australia managing director, says Melbourne is known as the ‘hatching capital' of Australia, with a strong research and development base, supportive business environment and established information, communication and technology companies.

“The opening of ME1 brought interconnections to this city, for which the appetite has been significant,” Deutsch says.

“Our expansion of ME1 will create even more interconnections in the vital economic hub which Melbourne is.

Frost - Sullivan figures show the data center services market is estimated to grow to AU$1.7 billion by 2020.

The company is also investing more than US$97 million building a new large-scale data center in Sydney.

Last week Equinix announced it is acquiring Japanese data center operator Bit-isle in an approximately US$280 million deal, as it continues its aggressive expansion throughout Asia Pacific.

That deal, being carried out by Equinix's Japanese subsidiary, will create the fourth largest data center operator in Japan, and provide increased interconnection throughout Asia Pacific.