Another Major Expansion for Equinix in Virginia

equinix-sydney

The colocation area inside one of the newer Equinix faciliites, the SY3 data center in Sydney, Australia. (Source: Equinix).

Colocation provider Equinix continues to expand its huge data center presence in northern Virginia. On Wednesday the company announced plans to build a new International Business Exchange (IBX) data center in Ashburn, Virginia, which will be its 11th facility in the key Internet connectivity hub. Equinix will also move ahead with a second phase of a new Ashburn facility offering data center suites instead of colocation.

The additional construction in northern Virginia was announced along with the company's fourth-quarter earnings, which fell slightly short of Wall Street's expectations. Equinix said per-share profit rose 21 percent to 35 cents, but analysts polled by Thomson Reuters had expected 44 cents, on average. Shares of Equinix (EQIX) were about 6 percent lower in after-hours trading. UPDATE: investors seem to have reconsidered overnight. In midday trading Thursday, shares of EQIX are about 5 percent higher than Wednesday's pre-earnings close.

The newest data center, called DC11, will be a 232,000 square foot facility. The $88 million first phase, scheduled to open in early 2013, will feature 42,800 square feet of customer floor space and have capacity for 1,200 cabinets. Additional capacity will be built out in multiple phases, which will add another 1,800 cabinets of capacity.

Rapid Buildout for Data Center Suites

Equinix also said it will begin construction on phase two of its DC10 "wholesale lite" data center for Business Suites, which is expected to be completed in Q4. Phase two of DC10 is expected to cost $21 million in expansion capital. Phase one of DC10, which adds 15,456 square feet of space, is scheduled to open next month.

“We continue to see strong demand for Platform Equinix in the Washington, D.C. metropolitan area,” said Charles Meyers, president of the Americas for Equinix. “With the DC10 expansion and the addition of DC11, we are positioned to better serve our growing ecosystem of global customers, while further strengthening our leadership position in this important market.”

Equinx says its Business Suites are ideal for customers with multi-tier architecture requirements that combine network nodes as well as service nodes that may require a larger footprint. The company said it has seen strong customer demand for the Business Suites offering, and the first customer installs will begin in March.

"We've already presold several deals into that facility, and we're seeing a very strong funnel," said Meyers. "The customer response there really strongly validates our hypothesis behind that investment, and we're seeing strong demand from these customers who really want to maintain a comprehensive relationship with an infrastructure partner like us. We're seeing real strong momentum in the market."

Scouting Opportunities in China, India

In the company's conference call with analysts, Equinix CEO Stephen Smith said the company is considering further international expansion.

"We're most interested probably in next priorities in China and India, and we have activity in both of those parts of the region, business development-type activity looking for the right opportunity," said Smith. "Our customer demand is very high in both of those parts of the world."