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Equinix, AMS-IX Extend Relations

EQIX T VZ

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Data center provider Equinix Inc. (EQIX - Analyst Report) is all set to extend its business relations with Amsterdam Internet Exchange (“AMS-IX”). AMS-IX is in the process of building a customer Point of Presence (PoP) in Equinix’s AM3 International Business Exchange (“IBX”) data center. This 17,800 square meter data center has come up near the Amsterdam Science Park and is expected to open during the third quarter of 2012.

The new PoP in AM3 is expected to enable customers to connect and network with AMS-IX’s community, which includes a large number of Internet Service Providers. It will also enable customers to connect with telecommunications carriers, mobile operators, content platforms, social media organizations and other such participants. This will ultimately improve reliability, enhance the exchanges’ performance and also reduce costs.

Also, AMS-IX core node at the Equinix AM1/AM2 data center campus in Amsterdam will be installed by the company. The new core node is expected to support the existing core sites, which are going to be installed in the busy Amsterdam area.

Sensing the huge demand for data centers, Equinix also announced its intention to set up a new IBX data center (RJ2) in Rio de Janeiro, Brazil. The estimated cost would be roughly $20.0 million for the first phase of the facility.

As declared by the company, the RJ2 data center will be developed under the supervision of ALOG Data Centers of Brazil, S.A. Equinix took over a 90.0% stake in ALOG in April 2011 for $127.0 million. The purpose of the acquisition was to enable Equinix to grab a bigger share of the growing data center market in Brazil and Lain America.

Equinix is present across many geographical regions and is increasingly becoming popular among major players in the tech industry for data management. However, a heightened debt situation, competitive threats from the likes of AT&T Inc. (T - Analyst Report) and Verizon Inc. (VZ - Analyst Report) and European exposure keep us on the sidelines.

Equinix carries a Zacks #3 Rank, implying a short-term Hold rating.

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