) is looking forward to expand further in the Middle East via its
newly acquired International Business Exchange (IBX) data center
in Dubai. For this, Equinix will work jointly with United Arab
Emirates-based telecom operator, du. Together, the companies will
offer seamless interconnection and colocation services through
the carrier-neutral data center to cloud service providers,
financial services providers, content providers and enterprises.
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The data center will host 650 cabinets within its 44,000 square
feet area. The first phase, which is likely to be fully
operational by January 1, 2013, will cost around $40.0 million.
Leveraging Equinix's state-of-the-art IBX data center in Dubai,
the local clients of both the companies will have better access
to traders around the world.
The Middle East holds huge business potential, which is evident
from the growing demand for data center services across the
region. A study conducted by networking giant
Cisco Systems Inc.
) reveals that cloud traffic in the Middle East and Africa could
grow at a compound annual growth rate (CAGR) of 79.0% up to
2016, which seems to be pretty high to drive Equinix' business in
the Europe, Middle East and Africa (EMEA) region. Reportedly, the
region has been performing well over the past few quarters.
In the recently concluded third quarter, the EMEA region
generated 23.0% of Equinix's total revenue, registering
year-over-year growth of 21.3%.
The growing demand for big data exchanges call for greater usage
of data centers. To meet this global need, Equinix is expanding
its IBX data center footprint globally and becoming popular among
tech majors looking for data management. The company's worldwide
presence has resulted in high network density with a vertically
focused approach, which will continue to support demand.
We are optimistic about the company's recurring revenue model and
expansion plans. Despite all the positives, competitive threats
from the likes of
) raise our apprehension. European exposure and industry
consolidation are also causes for concern.
Currently, Equinix has a Zacks #3 Rank, implying a short-term