Equinix added five locations to the list of nearly 20 announced data center expansion projects already underway.
The world’s largest retail colocation data center provider said Wednesday that it expects to spend $175 million on data center construction in Chicago, Toronto, Amsterdam, Rio de Janeiro, and Dubai. “We are scaling significantly faster than our peers,” Equinix CEO Steve Smith said on the company’s fourth-quarter earnings call the same day.
Skyrocketing growth in internet video and other online services, cloud services, and outsourcing of enterprise data center footprint to colocation providers has translated into a boom for data center providers like Equinix over the recent years. Competing for the opportunity, they have been expanding by building and acquiring data center facilities.
In addition to simultaneous construction in more than 20 locations, Equinix recently acquired 24 data centers in North and South Americas from Verizon. That’s after it closed the acquisition of the European heavyweight TelecityGroup early last year and Japan’s Bit-isle at the end of 2015.
On Wednesday’s call, Smith described the Verizon deal as a “transformative acquisition.” It brought the company’s total footprint to nearly 180 data centers in 44 metros across 22 countries. Most importantly, however, it brought under Equinix’s control the massive NAP of the Americas carrier hotel in Miami, which is a primary network interconnection hub between the US and South American markets, and a large campus in Culpeper, Virginia, which Equinix views as strategically important because of its large concentration of federal government customers.
A big portion of the company’s year-over-year revenue increase in 2016 was attributable to Telecity ($400 million) and Bit-isle ($149 billion). Equinix’s full-year 2016 revenue was about $3.6 billion – up 33 percent from 2015 but only 14 percent organic growth in constant currency.
The company’s first-quarter revenue, executives warned, is likely to suffer from LinkedIn moving its equipment out of some 1,300 cabinets across numerous Equinix data centers in North America. LinkedIn has been transitioning to a hyperscale data center strategy, consolidating its footprint into fewer large-scale company-run facilities. The churn will leave a $6.8 million dent in Equinix’s first-quarter revenue, CFO Keith Taylor said on the call.
Equinix also announced on Wednesday the addition of Salesforce to the list of cloud providers whom customers can connect to via private network links that bypass the public internet. This is a core part of the data center company’s current strategy, meant to attract more large enterprise customers that want to use public cloud services but require the reliability and security of private network connections to those services.