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Equinix to Tap EMEA Region with New IBX in Amsterdam
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Keeping with its strategy to expand its footprints across different geographies, Equinix Inc. (EQIX - Free Report) recently announced its plan to build a new International Business Exchange (IBX) in Amsterdam. The new IBX infrastructure, which will be known as AM4, will be developed at the company’s existing Amsterdam Science Park campus.
As per the plan, Equinix will invest $113 million in the first phase of development, which will facilitate the accommodation of 1,555 cabinets. This phase is anticipated to be completed in the second quarter of 2017.
This will be followed by the company initiating three more phases to increase the capacity to 4,200 cabinets. This will increase the total investment on AM4 project to $189 million.
In a separate announcement, the company reported that its customers can now avail Amazon.com Inc.’s (AMZN - Free Report) Amazon Web Services (AWS) Direct Connect cloud service at its data centers. With this, the company’s metros offering the Direct Connect service has increased to 11.
As per Equinix, “With AWS Direct Connect, companies can connect their customer-owned and managed infrastructure directly to AWS, establishing a private connection to the cloud that can reduce costs, increase performance, and deliver a more consistent network experience.”
Expansions in important markets and consolidation of facilities in the existing ones have been part of Equinix’s core strategy. Citing predictions made by IDC, Equinix revealed that cloud computing will continue to grow at a solid pace across the European continent.
As per IDC, public cloud market in the EMEA region is likely to expand 26% over the next four years. It has also predicted that the private cloud market will witness 18% growth during the same time frame.
Given these predictions, the company’s recent decision to increase its capacity in Amsterdam seems like a step in the right direction.
Equinix currently operates over 145 data centers across 40 countries, which it intends to increase to 150 by this year, per an expansion plan announced in March this year. Equinix intends to invest more than $4.5 billion for new data centers, expansion of colocation space and acquisitions.
The company strives to boost its revenue base and profitability through technological upgrades to attract more clients. Moreover, its recurring revenue model has provided the much needed support to its revenue stream over the years. The company’s cloud and IT service businesses are its fastest growing segments and account for approximately one-fourth of its total revenue.
Equinix remains positive on the growing demand for data centers attributed to the Big Data exchanges. To meet this demand, the global interconnection and data center company is expanding its IBX data centers globally and gaining popularity among tech companies looking for data management. Thus, the company expects its total addressable market for retail data centers to increase at a CAGR of 8% from 2013 to 2017 and reach $24.0 billion. Based on this projection, Equinix projects a revenue growth rate of 10% through 2017.
However, Equinix has to compete with established communications carriers such as AT&T (T - Free Report) , Level 3 Communications and Verizon Communications, all of which operate data centers.
Moreover, the telecommunication industry is currently undergoing consolidation. As customers combine businesses, they may require less colocation space with fewer networks available to choose from. In addition, increased utilization of existing colocation space could reduce the attractive expansion opportunities available to this Zacks Rank #3 (Hold) company.
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Equinix to Tap EMEA Region with New IBX in Amsterdam
Keeping with its strategy to expand its footprints across different geographies, Equinix Inc. (EQIX - Free Report) recently announced its plan to build a new International Business Exchange (IBX) in Amsterdam. The new IBX infrastructure, which will be known as AM4, will be developed at the company’s existing Amsterdam Science Park campus.
As per the plan, Equinix will invest $113 million in the first phase of development, which will facilitate the accommodation of 1,555 cabinets. This phase is anticipated to be completed in the second quarter of 2017.
This will be followed by the company initiating three more phases to increase the capacity to 4,200 cabinets. This will increase the total investment on AM4 project to $189 million.
In a separate announcement, the company reported that its customers can now avail Amazon.com Inc.’s (AMZN - Free Report) Amazon Web Services (AWS) Direct Connect cloud service at its data centers. With this, the company’s metros offering the Direct Connect service has increased to 11.
As per Equinix, “With AWS Direct Connect, companies can connect their customer-owned and managed infrastructure directly to AWS, establishing a private connection to the cloud that can reduce costs, increase performance, and deliver a more consistent network experience.”
Expansions in important markets and consolidation of facilities in the existing ones have been part of Equinix’s core strategy. Citing predictions made by IDC, Equinix revealed that cloud computing will continue to grow at a solid pace across the European continent.
As per IDC, public cloud market in the EMEA region is likely to expand 26% over the next four years. It has also predicted that the private cloud market will witness 18% growth during the same time frame.
Given these predictions, the company’s recent decision to increase its capacity in Amsterdam seems like a step in the right direction.
EQUINIX INC Price
EQUINIX INC Price | EQUINIX INC Quote
Equinix currently operates over 145 data centers across 40 countries, which it intends to increase to 150 by this year, per an expansion plan announced in March this year. Equinix intends to invest more than $4.5 billion for new data centers, expansion of colocation space and acquisitions.
The company strives to boost its revenue base and profitability through technological upgrades to attract more clients. Moreover, its recurring revenue model has provided the much needed support to its revenue stream over the years. The company’s cloud and IT service businesses are its fastest growing segments and account for approximately one-fourth of its total revenue.
Equinix remains positive on the growing demand for data centers attributed to the Big Data exchanges. To meet this demand, the global interconnection and data center company is expanding its IBX data centers globally and gaining popularity among tech companies looking for data management. Thus, the company expects its total addressable market for retail data centers to increase at a CAGR of 8% from 2013 to 2017 and reach $24.0 billion. Based on this projection, Equinix projects a revenue growth rate of 10% through 2017.
However, Equinix has to compete with established communications carriers such as AT&T (T - Free Report) , Level 3 Communications and Verizon Communications, all of which operate data centers.
Moreover, the telecommunication industry is currently undergoing consolidation. As customers combine businesses, they may require less colocation space with fewer networks available to choose from. In addition, increased utilization of existing colocation space could reduce the attractive expansion opportunities available to this Zacks Rank #3 (Hold) company.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>