Where Opportunity Connects
|Traded as||NASDAQ: EQIX
NASDAQ Financial-100 Component
S&P 500 Component
|Headquarters||Redwood City, California, United States|
|Samuel Lee (President, Equinix Asia-Pacific) |
|Revenue||US$3.61 billion (2016)|
Number of employees
|5,900 (December 2016)|
Equinix, Inc. is an American multinational company headquartered in Redwood City, California,]] that specializes in enabling global interconnection between organizations and their employees, customers, partners, data and clouds. The company is the leading global colocation data center provider by market share, and it operates 145+ data centers in 40 major metropolitan areas in 15 countries on five continents.
Equinix was founded in 1998 to provide a neutral place where the networks forming the early internet could exchange data traffic. It expanded to Asia-Pacific in 2002 and Europe in 2007. The company later began operating facilities in Latin America in 2011 and in the Middle East in 2012. Its purchase of TelecityGroup in early 2016 established the company as the largest colocation provider in Europe. In December 2016, Equinix announced it had agreed to purchase 29 Verizon data centers in a move to expand its presence across the U.S. and Latin America. The deal, expected to close in mid-2017, would bring Equinix’s data center count to 175 facilities in 43 markets.
The company offers colocation, interconnection solutions and related services to enterprises, content companies, systems integrators and 1,400+ network service providers worldwide. Equinix data centers host more than 2,500 cloud and IT service providers. Equinix offers several interconnection services, including Equinix Cross Connects, Equinix Performance Hub and Equinix Data Hub. The company operates the Equinix Cloud Exchange and an Internet Exchange. Its Professional Services group offers various consulting and technical support services.
Equinix says its broad geographic reach is a key differentiator that allows its customers to place equipment in proximity to their end users worldwide, which the company claims results in superior connectivity. Its global data center platform, which it calls Platform Equinix, is one of three components of a triple-ringed “moat” the company says it must maintain to continue to outpace its competitors. It says the other two components are the interconnected industry ecosystems that populate its data center platform and its commitment to service excellence.
The name Equinix combines words that describe what the company’s founders saw as its core attributes: Equality, neutrality and internet exchange. The name is pronounced with a soft “e” on the first syllable so that it mimics the pronunciation of “equity.”
Equinix reported 2016 revenues of $3.61 billion.
Equinix was founded in 1998 by Al Avery and Jay Adelson, two facilities managers at Digital Equipment Corporation. The founders believed that existing data centers would not be sufficient to support the rapid growth of the Internet and saw the opportunity to deploy data centers on a much larger scale to support this growth. In an interview, Adelson recalled that the early Internet was "run by cowboys. … It just wasn't hardened, it wasn't commercialized. And for those of us that cared, we knew that a company like Equinix would need to exist. Somebody would have to be the steward of all this infrastructure."
Equinix promoted its data center platform as a neutral place where competing networks could connect and share data traffic. This peering model extended each carrier’s individual reach, regionally and globally, and its wider adoption enabled the massive peering that led to the explosive growth of the internet, the “network of networks.”
Equinix focused on expanding interconnection from its inception, as it aimed to capitalize on the so-called “network effect,” through which each new customer would broaden the appeal of its platform. Each new carrier, for example, would expand network route options for content providers, who were then increasingly drawn to Equinix and, in turn, increased Equinix’s appeal to advertisers who wanted to do business with those content providers. In an early interview, an Equinix marketing executive said the company’s strategy was to find “people who bring people who have relationships with people.” The company’s first data centers opened in New York, Silicon Valley, and the Washington D.C. area. Soon after, the company began a continuous and steady expansion that aligned with its internal philosophy to always attempt to increase interconnection opportunities ahead of market demand.
Equinix’s overseas expansion began in 2002 in Asia-Pacific, after it acquired data centers in Hong Kong, Singapore, Sydney and Tokyo in mergers with i-STT and Pihana Pacific.
Steve Smith took over as CEO in 2007, the same year Equinix 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 UK. That plan was completed with the 2010 opening of Equinix’s 50th global data center, in London, but a more intense period of growth followed. 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.
Equinix’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.
The company extended its operations to the Middle East and in Southeast Asia in 2012, announcing partnerships to enter the Dubai, UAE, and Jakarta, Indonesia, markets. Also in 2012, Equinix increased its commitment to Asia-Pacific, its fastest-growing region, by completing a $230.5 million all-cash transaction for Hong Kong-based data center provider Asia-Tone. In the transaction, Equinix gained a total of six data centers and one disaster recovery center spread across the Hong Kong, Shanghai and Singapore markets. At the time of the deal, Smith said the acquisition put Equinix “in a strong position to establish market leadership in Asia-Pacific."
In 2014, Equinix strengthened its Latin American presence when it paid $225 million to complete the acquisition of ALOG Data Center of Brazil S.A., the country’s leading provider of carrier-neutral data centers. Equinix had acquired a 53% stake in ALOG in 2011.
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. In addition, Equinix acquired the professional services company Nimbo as part of a broader effort to develop its professional services business to assist customers executing data center migrations or advancing their network and hybrid cloud strategies.
The year 2015 was an intense period of acquisition activity and global growth for Equinix. Early in the year, Equinix opened five new data centers on four continents, increasing the company's data center footprint to more than 10 million square feet.
The largest acquisition in company history was announced at the end of May 2015, when Equinix said it would purchase the British company TelecityGroup. 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. In January 2016, Equinix announced that it had completed the Telecity acquisition in a transaction valued at approximately $3.8 billion.
The addition of TelecityGroup’s 40+ 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 to better serve enterprise customers who viewed interconnection as a core IT design principle, and who were increasingly moving to highly interconnected, global data centers to accelerate business performance and innovation.
The size of the deal raised questions about Equinix’s continued appetite for further expansion in the near term. Smith responded to the questions by noting Equinix ‘s strong balance sheet.
"This deal doesn't preclude us from taking action if there were other opportunities," he said.
Four months after Smith’s comment, 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 Equinix as Japan’s fourth-largest data center provider.
In 2016, Equinix opened new data centers in Dallas, Sydney and Tokyo and announced a deal to acquire 29 data centers in 15 markets from Verizon for $3.6 billion. The acquisition would extend Equinix’s North American footprint into two new markets, Houston and Culpeper, Va., and expand its Latin American presence by adding a facility in Sao Paulo and bringing the company into Bogota, Colombia, for the first time. The company said the deal was expected to close in mid-2017, subject to the satisfaction of customary closing conditions.
Smith frequently speaks of his goal to build Equinix into an “historically significant” company. He points to Equinix’s leading market position and commitment to continued expansion, saying it aligns with cloud-driven surges in global data traffic and the subsequent need for the colocation and interconnection services Equinix provides. “Equinix will be remembered in the history books for … how we interconnected the world,” he said.
International Business Exchanges
Chairman Peter Van Camp describes Equinix International Business Exchanges (IBXs) as "international airports where passengers from many different airlines make connections to get to their final destinations". Equinix CEO Steve M. Smith said the interconnection available within his company's broad data center footprint enables 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." Equinix IBXs peer IP traffic to over 90% of the world's Internet routes. Their Internet Exchanges (IXs) route Internet traffic between over 1,000 telecommunications networks worldwide.
Cloud adoption has been consistently hindered by worries about data security. Equinix has worked to address those concerns by creating the Equinix Cloud Exchange, which allows organizations to directly connect to cloud providers inside its data centers, rather than through connections established on the public Internet. Equinix describes the Cloud Exchange as a way to make the cloud "elastic," citing the exchange's ability to interconnect businesses to multiple cloud providers on-demand and simultaneously, which the company claims enables new efficiency and reduces complexity.
Data center expansion in Brazil
In 2013, Equinix, still under the name of ALOG Data Centers of Brazil, launched its second data center in Rio de Janeiro and the fourth in the country. The initial investment was R$40 million (BRL), and the new data center was the only one in the city to have Tier III certification. The data center had a projected area of 15,000 square meters for container data centers and antenna installer.
In 2014, the data center in Tamboré (SP) was the first in Brazil to install a new cooling technology that takes advantage of free cooling, used nine precision air conditioning units, and was estimated to reduce the infrastructure energy costs by 30% to 60%.
Data center (IBX) locations
|United States||49 IBXs|
|Hong Kong||4 IBXs|
|Europe and Middle East|
|United Arab Emirates||1 IBXs|
|United Kingdom||11 IBXs|
- Cloud computing
- Colocation centre
- Data center
- Internet exchange
- List of Internet exchange points
- "Equinix co-founder Jay Adelson explains how Equinix got its name". Equinix. Retrieved September 21, 2015.
- "Entrevista com Peter Van Camp." The Wall Street Transcript. (February 13, 2006)
- "Equinix CEO Sees Further Consolidation in the Telecommunications Space". The Street. Retrieved September 21, 2015.
- "Equinix Internet Exchange Data Sheet". Equinix. Retrieved September 21, 2015.
- "Expand your reach with Platform Equinix.". Equinix. Retrieved September 21, 2015.
- "Business trust in data security in the cloud at an all-time low". Global Services. Retrieved September 21, 2015.
- "Cloud Complexity, Simplified". The New York Times. Retrieved September 21, 2015.
- "Equinix to Offer Private Links to Google's Public Cloud". Data center Knowledge. Retrieved September 21, 2015.
- "Alog opens data centre in Rio de Janeiro". Telecom Paper. Retrieved September 21, 2015.
- "Alog expande data center com solução "inovadora" da Emerson". Computer World. Retrieved September 21, 2015.
- "Equinix investirá US$17 milhões e dobrará data center no RJ". Computer World. Retrieved September 21, 2015.