Leading data center solutions provider Equinix Inc. (EQIX) has entered into a strategic partnership agreement with Shanghai Data Solution Co. Ltd. (SDS), a leading China-based systems integrator for network and communications services.
Through this strategic partnership Equinix marks its entry into the world’s fastest growing Chinese market. This apart, through this partnership, the company’s customers will enjoy a similar level of availability and reliability of collocation services in China through the SDS data center, same as the 49 International Business Exchange (IBX) centers that the company operates worldwide.
We believe that Equinix’s strategic entry to Shanghai opens a plethora of opportunities for the company, as the city is one of the China’s largest commerce and financial centers. This will help Equinix get plenty of local customers, which in turn will generate greater business for the company. The move is in line with Equinix’s plan to expand operations in the 18 markets in which it operates.
Additionally, as planned by Equinix previously, the company recently opened the first phase of its second IBX data center in Geneva, Switzerland. This customized GV2 IBX data center, Equinix’s fifth in the country, has the capacity to meet the demand for premium collocation and data center services from both local and global corporations and banking organizations. This expansion falls within Equinix’s $1.4 billion 2007-2010 global expansion plan. Besides, the company is also expected to open a fourth IBX data center in Zurich, during the second quarter of 2010.
The company is continuously increasing its client base and acquiring companies that could enhance its revenue potential and expand its geographic reach. Apart from expanding its current facilities, the company is also exercising fiscal discipline. We are positive about the company’s recurring revenue model and its expansion into the European market, which has very favorable characteristics. However, increased competition, industry consolidation and significant debt limit the growth potential of the company to some extent.
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