Deal Wins Continue for EQIX
Equinix Inc. (EQIX) has been winning several new deals in the recent past. The latest addition to this is a deal from CME Group. As per the agreement, Equinix will collaborate with the European CME Globex hub to form a facility inside the former’s London, Slough LD4/LD5 data center campus. This seems to be a new line of business for Equinix, which will help the company gain more expertise in dealing with business and commodity exchanges.
The placement of this exchange hub within Equinix’s LD4/LD5 campus will provide CME Group with a significant advantage to cater to its European customers.
Another important deal win in the recent past was the one with Priceline. The latter has already started using the Equinix DC6 International Business Exchange data center, located in Va. This helped Priceline to reduce its server count by 40.0%, reducing its power consumption by 50%. Moreover, Equinix’s solution is aiding Priceline to improve response time. Priceline is one of the largest travel booking sites in the U.S.
Moreover, to strengthen its reach and presence in the Asia-Pacific region, the company opened a new data center in Singapore. Equinix, in collaboration with Mapletree Industrial Trust, a real estate company, inked an agreement to construct the third international business exchange (:IBX) in Singapore.
The new data center will enable the extension of the Equinix platform, which will help cater to the growing need for premium interconnection and data center connection in that region.
The company has been instrumental in achieving strong business momentum, which has helped Equinix improve its customer base and the resultant “network effect” within its IBX centers. This has helped the company to improve its internet network, which constitutes around 90% of the global Internet routes.
In spite of soft business during the recent recessionary phase, Equinix data centers have helped clients improve their IT infrastructure, which have generated cost savings. Moreover, the company’s data center solutions have helped certain businesses remove the complexities of administering and managing infrastructure, which also significantly lowered their costs. Equinix solutions also help customers reduce the IT cost of critical transit, peering and traffic exchange operations by eliminating the costs of private peering or local loops.
Although the solutions provided by Equinix are of great importance to companies, but the business was affected to a certain extent in the last couple of years, as companies have not made fresh investments during the recessionary phase. Of late the business has picked up.
Moreover, new marketing strategies are already in place for improving its technological base to attract more customers. However, a long sales cycle, high debt level and lower business potential in Europe may rationalize its growth prospects.
Equinix carries a Zacks Rank #3 (Hold). Investors can also consider other stocks such as Progress Software (PRGS), Rimage Corp. (RIMG) and Pegasystems Inc. (PEGA), all of which have a Zacks Rank #1 (Strong Buy).
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