EQIX Equinix Inc

Equinix, Inc. (EQIX) is a global provider of network-neutral data centers and Internet exchange services for enterprises, content companies, systems integrators, and network service providers. The company has recently entered into collaboration with Dell Inc. (DELL) and Rackspace Hosting, Inc. (RAX). The three companies have created a technology called an OpenStack cloud demonstration and test environment. The demo environment will be available in three data centers.

 This new cloud environment will allow organizations to easily assess the applications on the open-source cloud platform, thereby facilitating the evaluation process and deploying OpenStack proof of concepts (POCs). This new technology takes the help of cloud computing technology and can offer customers the ability to move applications and workloads throughout the system.

OpenStack will cater to companies in both the public and private cloud environment. Equinix is also expanding in other Asia/Pacific markets. Earlier, the company announced its second IBX data center (HK2) in Hong Kong, which brings the total cabinet capacity in the region to 1,450. The expansion of its SY3 data center in Sydney and the third expansion phase of its SG2 center in Singapore further illustrate this point.

Earlier this year, Equinix entered into a strategic partnership agreement with Shanghai Data Solution Co. Ltd. (SDS), a leading China-based systems integrator for network and communications services. The partnership marked the company’s entry into the world’s fastest growing Chinese market.

Cloud computing enjoys strong demand and is being increasingly adopted by businesses. However, managing the way it is used will be very important. Moreover, not only private but also government agencies are increasingly turning to the cloud. As per a study conducted by Market Research Media, the U.S. government’s spending on cloud computing has entered a phase of explosive growth. The segment is expected to grow at a CAGR of 40.0% from 2010 to 2015 and will pass $7.0 billion in 2015. We believe that through technical collaboration with companies such as Dell and Rackspace Equinix will be able to take advantage of this growing market.

 The company is expanding its current facilities and client-base and also exercising fiscal discipline. We are positive about its recurring revenue model and current expansion plans. However, increased competition, industry consolidation, exposure in the European market and a long sales cycle remain concerns.
 
We have a short-term Hold rating on Equinix shares, which equates to a Zacks # 3 Rank.

 
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