Equinix Furthers Europe Connection

Zacks Equity Research

Leading data center solutions provider Equinix Inc. (EQIX) recently announced the opening of its latest International Business Exchange data center (AM3 Science Park) in Amsterdam. The capital city of the Netherlands, which happens to be one of the most densely networked regions in the world, will now have the capacity to offer its local business houses speedy interconnection across most of Europe. The IBX will accommodate 2,800 cabinets across a gross area of 17,800 square meters.

With the AM3, Equinix’s European business touched another milestone. The company believes that the subscribers within AM3 will be able to interconnect with various service providers (Internet exchange, cloud, network and content) across Europe at an accelerated speed (roughly 50 milliseconds).

To make AM3 a success story, Equinix set out to develop a customer Point of Presence (PoP) in tandem with the Amsterdam Internet Exchange (AMS-IX) in August. The PoP is expected to enable customers to connect and network with AMS-IX’s community, which includes a large number of Internet service providers.

Also, the Aquifer Thermal Energy Storage technology, being used in AM3, will help keep heat generation under control and allow the excess heat to warm up domestic houses in the vicinity. The whole process will actually save some energy, help reduce carbon content in the atmosphere and contribute to a cleaner environment.

Apart from this, Equinix is also setting up a partnership with PT DCI to provide its IBX services in Indonesia. Equinix boasts a presence across various geographical regions and is increasingly becoming popular among major players in the tech industry 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.

The company has delivered decent second quarter 2012 results with earnings per share exceeding the company’s expectation. Moreover, revenue improved substantially on a year-over-year basis on improved colocation, interconnection and managed infrastructure services. Guidance for the third quarter and fiscal 2012 was encouraging.

However, a heightened debt situation, competitive threats from the likes of AT&T Inc. (T) and Verizon Inc. (VZ) and European exposure keep us on the sidelines.

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

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