EQIX Focused on Data Center Growth

As a leading provider of co-location services, Equinix Inc. (EQIX - Analyst Report) is well positioned in the market. The company is moving on with its leadership position in the energy efficient data center management segment. The company recently announced that its SV2 International Business Exchange (IBX) data center has earned the Leadership in Energy and Environmental Design (LEED) Certification from the U.S. Green Building Council (USGBC).

Securing a LEED certification shows the company’s commitment to setting up energy efficient data center operations. It is also likely to encourage companies across sectors to use EQIX data centers, as it helps them adhere to the strict energy saving guidelines put forward by the different regulatory bodies.

Extending its Data center business, the company recently entered into an agreement with Boston Options Exchange Group, LLC (BOX). This is an all-electronic equity options market, which has announced the shifting of its operations to the Equinix NY4 International Business Exchange (IBX) data center. The arrangement should provide BOX a secure, high performance trading environment that will help it execute its present and future plans.

In October 2009, Equinix announced its plans of opening a or 48,400 square foot data center in Geneva , Switzerland . This second data center in Geneva falls within the company’s $1.4 billion expansion plan to be executed within the 2007 – 2010 timeframe. In accordance with this plan, the company expects to expand its operations in 15 out of the 18 markets in which it operates. We are positive about the company’s growing data centers across geographies, since this will help generate additional revenue under the recurring revenue model.

The company is continuously increasing its client base and acquiring companies that could enhance its revenue potential and expand its geographic reach. Apart from expanding its current facilities, the company is also exercising fiscal discipline. We are positive about the company’s recurring revenue model and its expansion into the European market, which has very favorable characteristics. However, increased competition, industry consolidation and significant debt limit the growth potential of the company to some extent.

Read the full analyst report on EQIX