Leading data center solutions provider Equinix Inc. (EQIX) announced that it will set up a strategic alliance with Glowpoint Inc. This alliance will benefit member companies and facilitate broadcasters of live programs.
Founded in 1991 and headquartered in Hillside, New Jersey, Glowpoint provides managed services for telepresence and video conferencing, business-to-business telepresence, and video exchange services that enable video communications over disparate networks and technology platforms. Broadcasters, small and medium sized businesses as well as video equipment manufacturers across the world purchase services from Glowpoint.
Pursuant to this alliance, Glowpoint will be able to use Equinix’s Carrier Ethernet Exchange. This will allow carriers easy access to managed services of the former. Carriers, on other hand, will be able to transmit their services to end-users more quickly.
Launched in April, Equinix’s Carrier Ethernet Exchange aims at removing complexities and time-consuming challenges common in data exchange services among carriers. This Ethernet-based service will now be available through Equinix’s International Business Exchange data center across North America, Europe and Asia Pacific. Glowpoint’s cloud-based infrastructure will be accessible to carriers and service providers throughout these regions.
Demand for Ethernet-based services is on the rise, driven mainly by the continuous growth of data traffic in metro/access networks. Although the Ethernet market has been growing at breakneck speed, its full potential is yet to be realized as carriers are restricted to geographic areas where their networks are deployed.
We believe that Equinix is well positioned to capitalize on the growing market demand as many service providers and enterprise network operators are already moving toward the evaluation and deployment of next-generation Ethernet services.
We find Equinix’s expanding facilities and growing client-base quite encouraging. However, the near-term margin is pressurized due to continuous geographic expansion, increased competition, industry consolidation, exposure to the European market and a longer sales cycle remain concerns.
We maintain a long-term Neutral rating and currently have a short-term Sell rating (Zacks #4 Rank) on Equinix shares.
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