The interior hallway at an Equinix data center. (Photo: Equinix)
Data center service provider Equinix will build a new data center to expand its technology campus in Slough, England. The new facility, known as London-6, will be a "greenfield" project in which Equinix builds the facility from the ground up, allowing the colocation market leader to deploy its newest designs and technology.
The expansion comes as Equinix is preparing to open the final phase of its London-5 data center, which will expand its capacity on the Slough campus by 1,475 cabinets. Equinix is inbvesting $82 million to build the first phases of the London-6 facility, which will be able to house 1,385 cabinets.
CEO Steve Smith said Equinix is also taking steps to secure the long-term future of its Slough operation. "We expect to close shortly on the acquisition of the London-4 and London-5 IBX buildings for approximately $35 million," Smith said on the company's recent earnings call. "Concurrent with this acquisition, we will enter into long-term ground leases on the London-4, 5 and future London-6 properties, effectively giving Equinix up to 50 years of control of our Slough campus."
Here are some other highlights from the Equinix earnings call:
More Business Suites: The company said it has experienced solid performance on Business Suites, the "wholesale light" offering that provides customers with dedicated suites for their gear, rather than cabinets or cages. As a result, it will be coming to more locations. "We are expanding offering to New York, a new build that will be tethered into the robust ecosystems in our Secaucus campus," said Smith.
Open-IX: Minimal Impact Seen: Analysts wondered how the emergent Open-IX movement and the US market entry of European exchanges LINX, DE-CIX and AMS-IX might impact the interconnection business, where Equinix has been the dominant player in the U.S. Chief Operating Officer Charles Meyers said Equinix is confiodent about its competitive position and the value of the customer ecosystems that have assembled within its data centers.
"The overall value really of any exchange to a customer really is driven by the scale of the platform," said Meyers. " And not just the number of participants directly on the exchange, but the number of peers that can be accessed within the facility for private interconnection. Unsurprisingly, when you have a 15-year head start, as Equinix does, that's where we really shine. And so we think the depth of our exchange is unmatched and feel very good about that.
"We've got the scale, the commitment and the balance sheet to continue to invest heavily in the platform and we're delivering industry-leading performance," Meyers added. "So the dynamics of the markets are such that there typically is room for an alternative exchange in most markets. In some cases, we are actually the secondary exchange, but we've always maintained the position that competition is good for the customer. So for Open IX or some of these other ones, there may be an opportunity for them to establish presence, but as long as we price our services competitively and deliver superior value for that price, we believe the impact to our business will be minimal."
Bullish About the Cloud: Equinix executives see significant upside in the growing popularity of cloud computing. While many startups and small companies are moving directly to the cloud, Equinix executives said many of these customers are soon hitting a point where they need to move to a hybrid infrastructure that combines public and private clouds. With its direct connectivity to both the Amazon and Azure clouds, Equinix says it's ideally positioned to benefit from the growth of the hybrid hosting model.
"We're actually seeing that new entrants may be moving to that (cloud) model increasingly rather than buying a cab or 2 from us ," said Meyers. "But what we see later is that as they scale and their requirements become more sophisticated, they very frequently look at how to move to a hybrid model and move certain workloads into a colocation environment. We have several documented case studies, where customers are doing that effectively within Equinix.
"We believe that's one of several major vectors within the cloud growth opportunity for us," he added. "We think public cloud is a major development for enterprise CIOs, and they're going to make significant use of it. But we're going to also be net beneficiaries, in that as they sort of balance that with a hybrid cloud architecture for security performance and cost reasons."
"We're very focused at bringing these big public cloud players to have access nodes around the world with us," said Smith. "And that will also help pull the enterprises, as we've discussed, to want to connect private workload with public workload, increase of hybrid cloud environment. We're starting to see that start to happen at a faster pace. I think that's going to be an interesting play because at the same time small companies go to public cloud nodes, all those public cloud platform players are going to have nodes at Equinix, and you can access those public clouds at Equinix all day long. And that's going to be an interesting environment as that starts to scale."
