Build v. Buy: Forrester Study Finds Big Benefits Inside Equinix

Jason Starr

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There’s no question where Equinix stands in the data center universe’s perpetual build v. buy debate. We exist so companies can buy (technically, lease) space for their IT infrastructure inside our data centers. Why build your own data center, when we’re already global and offer quick connections to partners and countless network routes to wherever, while always – always – keeping the power on?

It’s just a better deal.

Now, we have the findings of a study conducted by Forrester Consulting on behalf of Equinix that can support what we’ve been saying.

The study, which Equinix commissioned, found major advantages to locating inside an Equinix facility, rather than building and running a data center. Specifically, Forrester’s three-year analysis of an Equinix customer listed $18 million in benefits for that customer, such as reduced construction costs. That’s versus $9.4 million in costs, including Equinix fees and services.

The leaves a net benefit of $8.6 million.

The study’s findings were based on interviews with an Equinix customer and a subsequent financial analysis. The customer is described by Forrester as a developer and seller of business intelligence, mobile software and cloud-based services with $600 million in annual revenue and more than 3,000 employees.

The customer was moving its office and decided to maximize space and gain mobility by housing its IT infrastructure at a third-party data center, rather than build its own. It chose Equinix for, among other reasons, the number of networks and business partners to connect with inside its data centers.

“Equinix was a great partner: very resourceful, working shoulder to shoulder with us, giving us advice all throughout the project,” the customer’s Vice President of IT Operations told Forrester.

Forrester said the move led to three quantifiable benefits for the customer:

Reduced Downtime for End Users. Forrester said the customer avoided 30 hours of annual power- or cooling-related downtime. It estimated that saved the company $2 million a year.

Reduced IT Headcount. Forrester calculated an annual $300,000 savings because the company didn’t have to hire three full-time IT employees to handle things that Equinix was handling. (That’s one employee for each of the three Equinix data centers where the customer ended up deploying equipment.)

Data Center Construction and Operations Cost Savings. Forrester estimated that by choosing Equinix instead of building its own data center, the company saved $13 million in upfront construction costs, plus ongoing annual costs close to $400,000.

The study also recognized – but couldn’t quantify – other benefits, including decreases in transmission delays and faster, more reliable connections with clients. The customer’s VP of IT Operations spoke about the advantages of being colocated with business partners inside Equinix data centers.

“What’s really great about Equinix is that it not only works with you to procure space, cooling, etc., but it also has a great ecosystem,” the VP told Forrester. “That helps companies that are hosted in Equinix to collaborate with one another.”

It’s clear to us the study gives plenty of reasons why it works to do business with Equinix, but please take a look at it yourself. Download the study here.

Jason Starr
Jason Starr Sr. Director, Analyst Relations