The acquisitions of Telecity and Bit-isle pushed Equinix’ FY16 revenue up 33% yoy to US$3.6bn as the data centre operator capped off a busy year of further expansion. Income from continuing operations was up 9% to US$619m but currency headwinds and interest charges drove net income down 32% yoy to US$127m.
Though Telecity contributed US$400m and Bit-isle US$149m, Equinix still managed to grow by around 14% organically. We think that’s a strong performance for a company whose traditional data centre hosting and colocation business model is being impacted by the continued growth of cloud service providers (CSPs).
As well as hosting some of those CSPs' infrastructure, Equinix is looking to cement its position by controlling more of the network interconnects and data traffic that links them and their enterprise customers. That strategy paid some early dividends in 2016, notably a hybrid contract win that connects a private cloud owned by Dutch manufacturer Philips with public clouds from Amazon Web Services, Microsoft Azure and IBM SoftLayer in multiple locations. As a result, Equinix’ EMEA interconnect revenue grew 47% to US$86m (up 23% to US$543m globally), though still dwarfed by turnover from colocation activities which increased 67% yoy to US$942m in the EMEA region and 31% to US$2.6bn globally.
The company now plans to broaden Cloud Exchange’s appeal to enterprise buyers by adding major SaaS providers, having recently signed Salesforce.com. It will also continue to expand geographically, with a “transformative” purchase of 29 data centres located in North and South America from US telco Verizon, the assimilation of IO UK’s Slough facility, and a build-out of additional hosting facilities in both the EMEA and Americas.
Already a market giant, Equinix’ ambitions are unlikely to stop there as it rides the wave of cloud transformation rather than fights it and further global acquisitions are almost certainly on the cards.
Posted by Martin Courtney at '09:37'
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