Data center provider
Equinix Inc
. (
EQIX
) recently announced its plan of opening a new data center in
Zurich (ZH5) and expanding its existing data center in Geneva
(GV2). The company's plan is backed by sustained customer growth
and growing demand for data centers in Switzerland.
The to-be-opened data center is expected to cater to a large
customer base and will encompass 6,670 square meters of space and
adhere to the Gold LEED standards. The site will be integrated
within Equinix's Zurich campus through fiber ring, offering direct
connectivity to more than 75 carriers.
Data center opportunity is slowly increasing, and the company is
trying to grab a major share of the pie. The company is exploring
opportunities not just in Zurich, but also in Washington D.C
sensing the high demand for colocation platforms. The Washington
area serves as the eastern hub of Internet traffic exchange in the
U.S., and is therefore an important business area for Equinix.
Increasing data exchange through Internet calls has augmented
the demand for more data centers in the region. Currently, with ten
operating IBXs and the eleventh one underway, it will be easier for
Equinix to meet the growing business needs.
Commensurate with its infrastructure investments, Equinix is
seeing a growing number of new deals, The most recent one being
with Unitas Global, a managed infrastructure service provider. As
per the deal, Unitas will be using Platform Equinix in regions like
Singapore and Australia as business hubs to expand globally. This
new service will help the company to reach out to its customers in
the Asia-Pacific region.
Apart from China, India, Japan and Australia, the United States
also offers good growth opportunities. We believe that favorable
pricing trends in the U.S. coupled with planned expansion will
boost revenue growth in the upcoming quarters. Equinix is also
seeking further growth opportunities in emerging markets.
Equinix has delivered strong second quarter results and provided
decent guidance for fiscal 2012. We believe that strategic
acquisitions and international expansion will help expand its
client base, thus enhancing its revenue growth potential.
We are also optimistic about the company's recurring revenue
model and current expansion plans. Despite all the positives,
competitive threats from the likes of
AT&T Inc.
(
T
) and
Verizon Inc.
(
VZ
) raise our apprehension. European exposure and industry
consolidation also concern us.
Equinix has a Zacks #3 Rank, implying a short-term Hold
rating.
EQUINIX INC (
EQIX
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T
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