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Equinix reveals infrastructure demand surge from Zoom and Tiktok

Written by Mon 11 May 2020

Data centre provider reveals companies expanded infrastructure in Q1 to cover explosive market demand

Equinix, the world’s largest data centre provider, has said the Covid-19 pandemic will not majorly impact its bottom line, if at all, as it posted strong Q1 results last week.

The company secured $1.445bn of revenue in Q1, a two percent rise on Q2 and a six percent rise year on year.

Although stay-at-home measures were only implemented globally in the last month of Q1, in the company’s earnings call, Equinix CEO Charles Meyers said he was confident that Q2 performance would maintain this trajectory, citing the company’s limited exposure to industries most affected by the outbreak and rising demand for digital infrastructure.

“The Equinix business continues to perform well and show resiliency through these times of uncertainty, enabling us to remain focused on the clear set of priorities we laid out at the beginning of the year,” said Meyers.

Across the board, companies have demanded more cloud and colocation server space to serve customers and remote workers, not least in-demand services like Zoom and Tiktok, which Meyers said were among a number of companies who have accelerated planned infrastructure upgrades to meet the sharp uptick in demand.

Because of these trends, Equinix is relatively bullish about its 2020 prospects. Notwithstanding this confidence, the company has reduced its revenue guidance by $50 million for the full year, suggesting this is the upper limit of what they estimate the financial impact of Covid-19 will be on its business. $3 million of that was eaten up in Q1 when the company made its hands-on service free so clients could still attend to cabinets remotely.

Although Equinix is largely insulated from impacted industries such as travel, energy and retail, these customers still make up 3 percent of its yearly revenue, the company said.

Another indicator that Equinix will be keeping a close eye on is new customer bookings, which the company admitted were somewhat “lighter” than usual. But Equinix was quick to point out that, as in other industries, much of its salesforce has had to quickly adapt to remote working and expected new sales to pick up in Q2 accordingly.

Lastly, Equinix said while it is experiencing minor construction delays due to stay-at-home measures, the cost of delay is “insignificant relative to the overall project duration and budget”. Equinix said it has redundancies built into its supply chain and has not observed significant disruption to its data centre operations to due supply chain constraints.



Written by Mon 11 May 2020


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