Equinix Continues Consolidating The Datacenter Market

According to a ResearchandMarkets report published earlier this week, the global Data Center Colocation Market is estimated to grow 15% annually over the next five years to $73.8 billion by 2023 from $31.25 billion in 2017. Redwood City-based Equinix (NYSE: EQIX) is a leading player in the segment.

Equinix’s Financials

Equinix was founded in 1998 by Al Avery, Jay Adelson, and William Norton. It was set up with the aim of providing secure physical connection points where networks, content providers, and enterprises could interconnect through a neutral party to avoid the competing interests of telecommunication providers. Equinix’s technology was important in making the Internet more scalable and cost-effective. Its platform saw big adoption and soon players like Microsoft and Cisco System became its big investors. Within a year, the company had set up the first-ever International Business Exchange [IBX] data center in Ashburn, Virginia.

Today, it provides global data center services to global organizations to help protect and connect their networks. It operates 90 IBX data centers across 35 major metropolitan areas in 11 countries in North America, Europe, and Asia-Pacific. It is the biggest retail colocation data center in the world with more than 10.5% of the global market share. For comparison, China Telecom, the second largest player in the industry owns a comparatively modest 5.9% of the market.

Equinix recently reported its fiscal 2017 results that surpassed market expectations. Revenues for the fourth quarter grew 27% over the year to $1.2 billion, marginally ahead of the Street’s forecast of $1.19 billion. This was the 60th quarter of consecutive revenue growth. Since Equinix is part of the Real Estate Investment Trust (REIT) industry, the market looks for its adjusted funds from operations (AFFO) metric. For the quarter, AFFO grew to $4.82 per share compared with $4.08 per share a year ago. This was also ahead of the Street’s forecast of $4.80 per share for the quarter.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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