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Global data center service provider Equinix Inc. (EQIX - Analyst Report) recently announced that it has opened its second International Business Exchange (IBX) in Rio de Janeiro based on the platform provided by ALOG Data Centers of Brazil S.A. This new Rio de Janeiro data center, popularly known as RJ2, will enable Equinix to meet the growing demand for data center services in the region.

The RJ2 data center will provide approximately 320 cabinets, with an additional provision for taking the count to 1170 cabinets. Development costs are estimated to be $36.0 million. This newly developed data center is the first Tier III-certified data center in the city.

This expansion will maximise redundancy and connectivity, thereby enabling mission-critical operation. The Tier III-certified data center will provide better security and mitigate risk, which in turn will enhance user satisfaction and help Equinix to expand its customer base and market share.

Earlier, Equinix had announced its intention of expanding operations in Brazil. The company also secured a couple of new contracts, which will likely improve its business volume and strengthen its market position.

Equinix’s data center platform has been popular in the financial services, networking and content management industries. Equinix has taken advantage of the fact that many firms in these industries are setting up their bases in South America. Seeing the growth prospects in the region, particularly in Brazil, we believe that Equinix will be able to secure a solid revenue stream.

Equinix, is also renewing its focus on the Asia-Pacific and Japan (APJ) region. However, increasing competition from the likes of AT&T Inc. (T - Analyst Report), European exposure and industry consolidation remain headwinds.

Equinix carries a Zacks Rank #4 (Sell). Investors should instead consider other stocks such as Semiconductor Manufacturing International Corp. (SMI - Snapshot Report) and Arris Group Inc. (ARRS - Analyst Report), both having a Zacks Rank #1 (Strong Buy).
 

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