Like several other companies, Priceline.com (PCLN - Analyst Report) is also taking support from Equinix Inc. (EQIX - Analyst Report), which is using the Equinix Platform to improve the efficiency of its operation and meet the growing demands of the online travel industry.
Priceline has started using Equinix’s DC6 International Business Exchange data center, which is located in Ashburn, Virginia. This has been beneficial to Priceline, as it has reduced its server count by 40.0%, thereby reducing power consumption by 50%. Equinix’s solution is aiding Priceline to improve response time.
According to a joint study by Gartner and Frost & Sullivan, the Asia-Pacific will see maximum growth in the data center business. Gartner also expects China to become the second largest global data center market by 2015.
Through constant deal wins, the company has been able to add to its critical mass of customers and has expanded its network within IBX centers. Direct interconnection with its aggregation of networks, which serves more than 90% of the world’s Internet routes, enables customers to increase the efficiency of their IT infrastructure, remove complexities of administering and managing their infrastructure, while significantly reducing costs.
Although geographical expansion and deal wins are helping Equinix expand its business, its longer sales cycle means that revenues are not recognized immediately, so there may not be any rapid improvement in its results.
The current macroeconomic condition is further extending the sales cycle, as customers are unable to accurately forecast their future business plans and are therefore delaying their purchase decisions.
Although, the company is making considerable efforts to pick up additional market share, we prefer to remain on the sidelines for this Zacks Rank #3 (Hold) stock. Investors could, however, consider other stocks such as Arris Group Inc. (ARRS - Analyst Report), Cisco Systems ((CSCO - Analyst Report)) , all carrying a Zacks Rank #2 (Buy).