Equinix is to spend $75 million on a new data centre in Sao Paolo, Brazil. This will be the fifth data centre that Equinix has in the South American country and comes at a time when it has been rapidly expanding its footprint, the acquisitions of both Telecity in Europe and BitiIsle in Japan along with other already announced data centre openings will bring the total number operated by Equinix to 150 by the end of the year.
The new data centre in Sao Paolo will have an initial phase that will see $76 million spent in the location. Named SP3, the new data centre should have its first phase complete in Q1 2017, and five additional phases have been planned to be commenced as demand grows in the area. Once all phases have been completed the final capacity of the data centre will be 2,800 cabinets, twice that of the current Equinix footprint in the country. It will be interesting to see whether the expansion in capacity is taken up by Equinix existing 800 customers or whether it concentrates on winning new customers to its base.
SP3 will be connected to another Equinix data centre SP2 in Sao Paolo using dark fibre. This will enable customers to have either a rapid failover capability between the two sites or expansion capabilities with minimal latency issues. In doing so, SP3 will also be connected to the Equinix global network with access to more than 1,150 networks. It will also have connectivity to the Equinix Cloud Exchange™ which provides direct and secure access to Microsoft Azure and Office 365. What isn’t clear is whether the connection to Azure will be a direct one from the data centre.
How green is the new data centre in Sao Paolo
In total SP3 will have more than 215,000 sq ft of which more than 90,000 sq ft will be colocation space. While Equinix are saing that there is more than 13.3 MW of power available to customers they have not mentioned where the energy is sourced from or whether it will be green energy. As a company though they are committed to sustainability generally and this is reflected in the design. The new data centre will use innovative cooling technology integrating air evaporative cooling solutions and indirect free cooling which means that the air conditioning systems in the data centre should use less electricity. The final result will be a data centre that will operate with a PUE below 1.35 when fully operational.
Karl Strohmeyer, president, Equinix Americas commented “We continue to see increasing market demand for interconnection and colocation in Brazil. The new SP3 facility will meet these needs while giving Brazil companies the opportunity to leverage the full scale of Platform Equinix into 40 key markets globally as business needs evolve.”
Conclusion
This seems like sensible timing for Equinix. According to consultancy Frost and Sullivan cloud revenue in Brazil will grow at a compound interest rate of 40% to $1.1 billion by 2017, with the IaaS market being $480.9 of that total. The OECD also predicts the Brazilian economy will be starting to make a slow recovery in 2017, just in time for Equinix to take advantage as companies start to invest and grow again.
What will be interesting is whether this shows a shift away from the strategy of growth through acquisition towards internal investment. There still seems to be no buyer for the Verizon data centres and although Equinix might need to leverage themselves further to make that acquisition they must be one of the companies considering an offer.
