Equinix plots new investments in China
US-based data-centre provider is eyeing more Chinese cities, including expansion in Hong Kong, after a Shanghai acquisition
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US-based data-centre provider is eyeing more Chinese cities, including expansion in Hong Kong, after a Shanghai acquisition
Bien Perez
11 July 2012
Global data-centre services giant Equinix is planning new infrastructure investments in China after completing yesterday its US$230.5 million acquisition of Asia Tone, a Hong Kong firm with operations in Shanghai.
Alex Tam Wing-yiu, the managing director at Equinix Greater China, said preparations were under way for the next stage of expansion in Hong Kong, where the company opened the second phase of its US$72 million high-performance data centre, known as HK2, in Tsuen Wan today.
“The Asia Tone deal, which was first announced in May, has given us a better position to grow on the mainland and strengthen our market leadership in Hong Kong,” Tam said.
“We are looking at potential new developments in other major Chinese cities.”
California-based Equinix now operates 105 data centres worldwide, including the latest added facilities from its takeover of Asia Tone.
A data centre is a secure, temperature-controlled facility built and equipped to house large-capacity server computers and enterprise data-storage systems, which have multiple power sources and high-bandwidth links to the internet.
Market research firm Gartner describes Hong Kong as one of the Asia-Pacific’s “important regional hubs” for large multinational companies to run data-centre operations, either on their own or through a service provider. It estimates total revenue from data-centre services in Asia reached US$10 billion last year.
Founded in 1998, Equinix operates data centres in 38 markets across 13 countries. These facilities serve more than 4,000 multinational companies, which have links to more than 700 telecommunications carriers and internet service providers.
Prominent customers in the city include financial services providers Hong Kong Mercantile Exchange and Bloomberg, communications network operators Verizon and Wharf T&T, and “cloud” services companies Carpathia Hosting and BrightHost.
Nasdaq-listed Equinix forecasts its global revenue will exceed US$1.89 billion this year, while total capital expenditures will range from US$700 million to US$800 million. Earlier this month, the company entered into a US$750 million senior credit facility with a syndicate of banks, the proceeds of which were used to repay loans taken out by its Asia-Pacific subsidiaries.
“We expect the Asia-Pacific region to receive a significant share of the company’s total investments over the next two to three years because of the market’s growth and high business potential,” Tam said.
“We will probably target new investments in major cities such as Beijing and Guangzhou.”
He said the recent investments made in Shanghai reflected that city’s importance as the mainland’s financial services hub. Equinix’s strategic partnership with mainland data centre operator Shanghai Data Solution, which started in 2010, would continue, he said.
The Asia Tone acquisition brings to Equinix more than 80 corporate customers, six data centres and one so-called disaster-recovery centre located across three key markets - Hong Kong, Shanghai and Singapore. That includes a new data centre under construction in Shanghai, which will provide 80,000 square feet of additional capacity. The first phase will open this third quarter.
Equinix will have more than 500 staff in Asia by the end of this year after merging Asia Tone’s employees and new hires. Globally, Equinix has about 2,800 staff.