Equinix

Equinix, Inc.

Where Opportunity Connects
Type	Public
Traded as	NASDAQ: EQIX
Industry	Internet
Founded	1998
Headquarters	Redwood City, California, United States
Key people	Jay Adelson (Founder) Al Avery (Founder) Peter Van Camp (Interim CEO, President and Executive Chairman)
Products	Data centers
Revenue	US$4.4 billion (2017)
Number of employees	6,200 (May 2017)
Website	equinix.com

Equinix, Inc. is an American multinational company headquartered in Redwood City, California, that specializes in internet connection and related services. It is a global colocation data center provider, leading by market share,^[1] operating 175+ data centers in 44 metropolitan areas in 22 countries on 5 continents.

Listed on the NASDAQ stock exchange under the ticker symbol EQIX. As of 2017, it had around 6,200 employees globally.^[2]

Equinix reported 2016 revenues of $3.61 billion.^[3]

History

Equinix was founded in 1998 by Al Avery and Jay Adelson, two facilities managers at Digital Equipment Corporation. The firm promoted its data center platform as a neutral place where competing networks could connect and share data traffic.^[4] The firm focused on expanding interconnection from its inception, to capitalize on the so-called “network effect,” through which each new customer would broaden the appeal of its platform.^[5] It expanded to Asia-Pacific in 2002^[6] and Europe in 2007,^[7] and then to Latin America in 2011^[8] and the Middle East in 2012.^[9] Its purchase of TelecityGroup in early 2016 established the company as the largest colocation provider in Europe.^[10] In May 2017, it completed the purchase of 29 Verizon data centers.^[11]

Peter Van Camp has led Equinix in a variety of roles for 17 years. He was chief executive officer from May 2000 until 2006, when he was appointed executive chairman of the Board of Directors.^[12] Steve Smith took over as CEO in 2007^[12] and resigned in January 2018. Van Camp was named interim chief executive officer upon Smith’s resignation and remains the company’s executive chairman.^[13]

Expansion

In 2007, the firm announced a $2 billion international expansion plan and entered the European market by acquiring data center operator IXEurope and its facilities in France, Germany, the Netherlands, Switzerland and the United Kingdom. That plan was completed with the 2010 opening of Equinix’s 50th global data center, in London.^[14] Over the next seven years, the company nearly tripled its data center portfolio, growth the company attributes to increased demand for interconnection services caused by the emergence of cloud computing, along with the expansion of related trends such as the Internet of Things and big data.^[15][16][17]

The firm's next major acquisition came in 2010, when the company purchased Switch and Data Facilities Company, Inc., a U.S. internet exchange and colocation services provider with locations in 23 North American markets. The transaction was valued at approximately $683.4 million.^[18] The company extended its operations to the Middle East and in Southeast Asia in 2012, announcing partnerships to enter the Dubai, UAE,^[9] and Jakarta, Indonesia, markets.^[19] Also in 2012, it completed a $230.5 million all-cash transaction for Hong Kong-based data center provider Asia-Tone, adding of six data centers and one disaster recovery center in the Hong Kong, Shanghai and Singapore markets. A"^[20]

In 2014, Equinix increased its Latin American presence when it paid $225 million to complete the acquisition of ALOG Datacenters of Brazil S.A., the country’s leading provider of carrier-neutral data centers. Equinix had acquired a 53% stake in ALOG in 2011.^[8]

In 2015, Equinix converted to a real estate investment trust (REIT) in a move to gain tax advantages and enhance shareholder value by offering a regular dividend.^[21]

In 2015, it acquired the professional services company Nimbo as part of a broader effort to assist customers executing data center migrations or advancing their network and hybrid cloud strategies.^[22]

Early in 2015 the firm opened five new data centers on four continents, increasing the company's data center footprint to more than 10 million square feet.^[23] The largest acquisition in company history was announced at the end of May 2015, when Equinix said it would purchase the British company TelecityGroup.^[10] The offer was cleared by the European Commission in November, but only after Equinix agreed to sell eight of its data centers around Europe to Digital Realty Trust for $874 million.^[24][25] In January 2016, Equinix announced that it had completed the Telecity acquisition in a transaction valued at approximately $3.8 billion. The addition of these data centers more than doubled Equinix’s capacity in Europe, making the company the region’s largest retail colocation provider. The deal also added network and cloud density.^[26]

The size of the deal raised questions about Equinix’s continued appetite for further expansion in the near term. Smith responded by saying that Equinix had a strong balance sheet and was open to further deals.^[10]

In September 2015, Equinix said it would buy Japanese provider Bit-Isle for $280 million. The deal, finalized in December 2015, doubled the number of Equinix data centers in Japan to 12 by adding five in Tokyo and one in Osaka. It also established the firm as Japan’s fourth-largest data center provider.^[27]

In 2016, Equinix opened new data centers in Dallas, Sydney and Tokyo^[28] and announced a deal to acquire 29 data centers in 15 markets from Verizon for $3.6 billion. The purchase, which closed in May 2017, extended Equinix’s North American footprint into Houston and Culpeper, Va., and brought the company into Bogota, Colombia, for the first time.^[29] The deal also included more than 1,000 Verizon customers, more than 600 of whom were new to Equinix.^[11] Many were from the enterprise market, which Equinix has aggressively targeted.^[30] In 2017, the firm also opened a new data center in São Paulo.^[31]

Data centers

Equinix has invested more than $17 billion since its founding to build its data center platform.^[32]

The firm calls its data centers International Business Exchanges (IBXs) to emphasize the collaboration and data exchange it says they enable. Chairman Peter Van Camp has compared them to "international airports where passengers from many different airlines make connections to get to their final destinations."^[33] Smith said the interconnection available within his company's broad data center footprint allows organizations to distribute IT closer to employees, customers and markets without having to build and manage the needed connectivity themselves. "We spend a lot of capital to build these facilities and companies take advantage of it."^[34]

The company cites its global average uptime record to demonstrate the reliability of its facilities and services. Equinix received positive press coverage in the aftermath of Superstorm Sandy in 2012 after its customers in the Northeast U.S. experienced relatively limited outages, compared to widespread problems at other vendors.^[35] The firm has received various International Standards Compliance (ISO) certifications related to physical and data security at its data centers. They include ISO / IEC 27001:2005 and 27001:2013 Information Security Management System Standard, related to information and physical security and business continuity, and the PCI-DSS Payment Card Industry Data Security Standard, related to physical security access to customer equipment.^[36]

Cloud

Some analysts have warned that long-term consolidation in the telecommunications industry caused by cloud will decrease demand for data center space and hurt the growth prospects of companies such as Equinix.^[37] Equinix argues that accelerated cloud proliferation and adoption, along with the emergence of cloud-dependent trends and technologies such as big data, mobile and the Internet of Things, dramatically increase the value of its core interconnection offering.^[15][16][17]

Equinix was described by an industry analyst as a “crucial middle man,” connecting companies that build private clouds on the Equinix platform to the underlying networks and public cloud providers they depend on.^[38]

Enterprise

Equinix has emphasized expanding its enterprise business as more companies move aggressively to compete as digital businesses. In a 2016 conference, Smith announced a company goal to exponentially increase its enterprise customer base in the next decade. Smith estimated the total addressable enterprise market at 350,000 globally and projected Equinix could land as many as 60,000 enterprise customers by 2026.^[39] Equinix’s total customer base at the end of 2016 was about 8,500, including about 2,250 enterprise customers.^[40] Industry observers said a challenge for Equinix would be appealing to customers who didn’t know they needed what Equinix offers: “Courting enterprises … is more difficult than serving Equinix’s traditional customer base, consisting of financial, network, media, and cloud companies. These customers basically knew what they wanted from Equinix, and all Equinix had to do was deliver.”^[41]

Equinix says its appeal to the enterprise market is based on its network density, cloud expertise and what it says is a growing enterprise need to obtain services from multiple cloud providers just to execute routine business. It argues the only way the enterprise can meet customer expectations is with what it called an “interconnection first” mindset^[39] that prioritizes moving closer to end users and enabling faster data processing and analysis at the “edge of the network.” The company has devised what it calls an “edge strategy” for the enterprise, named the Interconnection Oriented Architecture. This strategy is designed to allow the enterprise to move closer to end users by capitalizing on Equinix’s global footprint and the access it provides to multiple networks and cloud providers.^[42] The firm also said its interest in cultivating enterprise growth was to ward off the threat presented by the largest public cloud providers, all of whom it hosts in its data centers.^[43]

Some analysts have argued that the continued growth of the public cloud giants – such as Amazon Web Services and Microsoft Azure – would eventually lead them to abandon third-party colocation providers like Equinix, and build their own data centers and take advantage of economies of scale.^[44] In response, Equinix has positioned its facilities as meeting places where enterprises could directly access as many public cloud services as possible and build customized and business-critical applications. The company believes that attracting more enterprises as they begin relying on multi-cloud strategies will further establish Equinix as an essential interconnection point between the enterprise and the public cloud, including its largest providers.^[42]

Sustainability

In 2015, the company made a long-term pledge to power its entire data center platform with clean and renewable energy.^[45] The pledge followed criticism in 2014 from the environmental group Greenpeace, which said in an annual report on the environmental practices of Internet companies that Equinix had an insufficient commitment to renewable energy and carbon emissions mitigation.^[46] The company pledged to use 100% clean and renewable energy globally and signed deals with wind farms in Texas and Oklahoma to buy enough renewable energy to offset the energy consumption of its entire North American data center portfolio.^[47]

Also in 2015, Equinix was also among the signatories of the White House’s American Business Act on Climate Pledge.^[48]

See also

• Cloud computing
• Colocation centre
• Data center
• Internet exchange
• Peering
• List of Internet exchange points

References

External links

• Official website

• • Business data for Equinix: Google Finance
  • Yahoo! Finance
  • Reuters
  • SEC filings