Equinix provides data and network hosting and colocation facilities (it calls them Internet Business Exchanges, or IBXs) where ISPs, telecommunications carriers, and content providers can locate equipment and interconnect networks and operations. The company also offers colocation-related services that include providing clients with cabinets, operating space, and storage. Its clients have included Apple, eBay, IBM, and Bank of America. Equinix operates dozens of IBXs in international markets including Chicago, Hong Kong, Los Angeles, New York, and Tokyo. The company makes more than one third of its sales outside of the Americas region. It was founded in 1998.
Equinix's revenue grew in 2011, as it has done each year of the past decade, while profits also rose, after a dip in 2010. The boost in sales (about 30%) was attributable to a growing international customer base (larger by about 10% in 2011, down from a 50% increase the previous year) driven by acquisitions and organic expansion of its global facilities network. Profits climbed by 250% despite higher operating costs in most areas of the business as a result.
In anticipation of a steady demand for commercial data center services, Equinix is expanding its infrastructure in the Americas, Asia, and Europe. In 2012 the company acquired the assets, including five data centers and a disaster recovery center, of Asia Tone for about $230 million in cash. The facilities are located in Hong Kong, Shanghai, and Singapore, and will expand Equinix's footprint in China. Asia Tone serves a number of the same customers as Equinix. Also that year it completed its acquisition of Germany-based colocation and interconnection services provider ancotel GmbH, which tacked on one more data center to Equinix's existing four in Frankfurt. With edge nodes (smaller, more mobile data centers) not only in London, but also Hong Kong and Miami, the deal also expanded Equinix's geographical reach, and it added 400 new customers.
As it focuses on core markets, the company is also divesting some data centers. In late 2012 it sold more than a dozen centers, exiting such markets as Cleveland, Detroit, and St. Louis.
In 2011 the company acquired 90% of ALOG Data Centers of Brazil for $83 million in cash, $15 million of which was slated for future data center expansion. The deal extended the company's reach to South America, bringing its total number of data centers to about 100 in 38 markets, in 13 countries worldwide. ALOG has data centers in Rio de Janeiro and Sao Paolo.
Equinix acquired Switch and Data Facilities the previous year for about $683 million in a move that boosted its number of data centers to about 90. As part of the deal it paid around $134 million in cash and issued approximately 5.5 million shares of common stock for the rival collocation and Internet exchange services provider, adding operations in more than North American 20 markets.
As part of an ongoing effort to deploy new resources internationally as it works to solidify the presence of its brand, the company announced an investment of about $100 million in 2012 to build an additional data center in Washington, DC to support expansion in the area. Late the previous year Equinix expanded its presence in Hong Kong, spending $63 million to establish second data center there in support of growing demand in the region. This was part of a pattern of Asia-Pacific investment that also saw the company opening a third data center in both Sydney and Tokyo in 2011. – less