The global data center company, Equinix Inc. (EQIX), is making all possible moves to expand its foothold in Singapore. The company rolled out its third International Business Exchange (:IBX) center and expanded its second data center in that region.
The expansion plan is in line with Equinix’s current strategy, which will help strengthen its grip in the financial and cloud service market in Singapore. The company also sensed the increasing demand of its data center space in Singapore and other Asia-Pacific regions.
The third data center, covering a gross floor area of 385,000 square feet, will become operational in the second half of 2014. The cost involved is expected to range between $50 and $55 million.
Sensing the data center opportunity in Singapore, Oracle (ORCL) recently housed a data center in the Equinix campus. Throough this data center, Oracle will serve customer needs for Oracle Fusion Applications, which include applications such as Enterprise Resource Planning, Human Capital Management, Talent Management, Sales and Marketing, and other such important aspects of the business.
The demand for data centers in the Asia-Pacific region is confirmed by a research report published by Gartner. As per the report, the total public cloud services market size is expected reach a level of $206.6 billion in 2016. Emerging markets like India, Indonesia and China will witness high growth rates and require more data center space.
Although deal wins are adding to the company’s revenue, the high debt level has resulted in higher interest costs. In spite of all the positives, rising competition from the likes of AT&T Inc. (T) remains a concern. European exposure and industry consolidation are the other headwinds.
Equinix carries a Zacks Rank #2 (Buy). Investors can also consider other stocks such as Symantec Corp. (SYMC), which also has a Zacks Rank #2 (Buy).
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