Equinix Quietly Enters US Wholesale Market

If you are current on recent Equinix news, you probably noted their intent to build a 10th data center in Ashburn, Virginia. The news was noteworthy for several reasons, firstly because the new data center will be built by Digital Realty Trust (DLR), the world’s largest data center REIT. Second, the deal represents tacit acknowledgement by Equinix that DLR build costs are more attractive than their own. Further, the facility, which is scheduled to open in early 2012, will focus entirely on suites for Equinix customers that require “larger” data center footprints…in other words, Equinix is now a wholeseller.

So what? As a relatively conservative company, this move by Equinix is acknowledgement that growth in their retail colocation business may be slowing relative to the market. Further, this move places Equinix in direct competition with larger turnkey wholesale providers, like DuPont and Digital, and early adopters of this hybrid strategy, namely CoreSite, RagingWire, and most regional providers.

I have been an advocate of this move for Equinix since 2008, and I view it as a positive move in ensuring long-term growth and customer control by the world’s largest colocation company.

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