Leading data center solutions provider Equinix Inc. (EQIX) recently announced that its International Business Exchange (IBX) data centers have been selected by Los Angeles-based managed infrastructure services provider Unitas Global. Financial terms of the deal were not disclosed.
Per the deal, Equinix will host Unitas Global’s services through its Singapore (SG2) and Sydney (SY3) IBX platforms. With Equinix’ data center platform, Unitas Global will be able to connect speedily with its network service providers and partners, which will enable the company to expand globally.
The growing need for big data exchanges calls for greater usage of data centers. To meet this global need, Equinix is expanding its IBX data center footprint globally and increasingly becoming popular among major players in the tech industry for data management. The company’s worldwide presence has resulted in high network density with a vertically focused approach, which will continue to support demand.
Unitas Global banking on the quality of Equinix’ services and its worldwide presence to expand further in the Asia-Pacific region, where it is seeing surging demand for its managed infrastructure services.
Equinix has delivered strong second quarter results and provided a decent guidance for fiscal 2012. We believe that strategic acquisitions and international expansion will help to grow its client base, enhancing its revenue growth potential.
We are also optimistic about the company’s recurring revenue model and current expansion plans. Despite all the positives, competitive threats from the likes of AT&T Inc. (T) and Verizon Inc. (VZ) raise our apprehension. European exposure and industry consolidation are also causes for concern.
Equinix has a Zacks #3 Rank, implying a short-term Hold rating.
