At Equinix, we’re very busy. Operations teams like mine are working around the world building cages, deploying cabinets, provisioning power, and deploying cross connects and Equinix Cloud Exchange Fabric™ (ECX Fabric™) ports, as well as virtual connections across that fabric. How busy are we? In Q2 2019, Equinix customer deployments across multiple regions increased to 73% of total recurring revenue. And of course, we’re also serving our existing customers and a growing number of new ones who’ve joined us since the end of June 2019.
Today’s businesses are increasingly seeking alternatives where they can move their core on-premises data center operations to well-managed multi-tenant facilities or expand their IT capabilities to edge locations (closer to users) to accelerate their digital transformation. They are turning to cost-effective hybrid colocation operations that offer greater regional and global presence, multi-carrier and multicloud access, with low-latency connectivity to partner ecosystems.
Our growing customer activity is indicative of the rising demand in our industry. According to the latest CBRE Research report on the North American data center market, the total capacity of the primary U.S. data center metro areas – Atlanta, Chicago, Dallas/Ft. Worth, New York Tri-State, Northern Virginia, Phoenix and Silicon Valley – grew by 200 megawatts (MW) or 8% in H1 2019. This represents a combined 171 MW of wholesale colocation net absorption in the first half of 2019, more than 57% of all of 2018. In addition, more than 411 MW of additional capacity is under construction nationwide in the near term.[i]
Just to put these findings into context, the majority of this demand CBRE reports is focused at the wholesale data center market, which is similar to retail multi-tenant data centers that house many companies’ IT infrastructures, only on average, these deployments are larger. While we at Equinix are well-known as the leading provider of retail colocation and interconnection services, we also serve customers that consume larger footprints (power and space) in both retail and wholesale colocation markets.
As a leading player in the North American colocation data center market, we see a lot of synergy between the findings in the CBRE report and what we’re experiencing with our Equinix International Business Exchange™ (IBX®) data centers in the top five growing U.S. metro markets. There, and around the world, our enterprise and service provider customers leverage our industry-leading Equinix Internet Exchange™ and award-winning ECX Fabric™.
Increase of total recurring revenue from Equinix customer deployments across multiple regions.
5 metros leading the data center race
Washington, D.C./Northern Virginia
In the heart of the Federal Government sector, with a large enclave of telecommunications carriers and cloud providers, CBRE reported that Northern Virginia is the first data center market in the world to surpass 1,000 MW, with an anticipated growth spurt of 25% in 2019. Northern Virginia data centers captured 73% of the primary wholesale colocation demand in the first half of 2019, and holds 60.4% of the primary market that is currently under construction.
The Equinix Washington D.C. metro IBX campus is at the heart of the largest internet peering point in North America—a strategic communications hub for the eastern United States and a major gateway to Europe. Our 13 interconnected data centers across the metro area offer direct connection opportunities for companies in the government, financial services, telecommunications, content and digital media, and cloud and IT services sectors, with 857,977 sq ft of colocation rental space and 113 MW of sellable power capacity. Our flagship Ashburn campus comprises 10 of the 13 IBX facilities in the Washington, D.C. metro area. It houses nearly 200 network service providers (NSPs), and more than 75 cloud and IT service providers.
Cloud and IT service providers in the DC metro.
With a 316 MW of inventory and 34.6 MW under construction, the Dallas/Fort Worth metro area is offering enterprises and service providers first-generation space and adaptable connectivity options at competitive prices. Facility requirements that were previously driven by enterprises are now being defined by hyperscale cloud and social media providers.
Our growing Dallas campus consists of eight IBX data centers – four of which are inside the Infomart – and provide proximity to banking, e-commerce, telecommunications, computer technology, energy, healthcare and medical research, and transportation and logistics companies. The largest internet and network peering exchange point in the U.S. South Central region, with fast connections to Central America, the Dallas campus has 228,681 sq ft of colocation rental space and 40 MW of sellable power capacity. We will add 245,000 sq ft in Q2 2020, as we proudly open DA11. This is a state of the art, purpose-built facility adjacent to the Infomart, a campus which houses approximately 150 NSPs and more than 50 cloud and IT service providers.
New square footage coming Q2 2020 when we open DA11
Due to strong local demand, Silicon Valley has the lowest vacancy rate (7%) among the primary metros, even with the highest wholesale rental rates ($135 – $165 kW/month). With 269.6 MW total inventory and 308 MW under construction, Silicon Valley’s market is being driven primarily by large cloud providers and operators with high uptime requirements.
Our seven Silicon Valley IBX data centers offer 687,701 sq ft of rentable colocation space and 81 MW of sellable power capacity. This enables customers to be part of a rich industry ecosystem with connectivity to a broad range of network, cloud and SaaS services, as well as concentrations of content and social media providers. Our flagship Great Oaks campus is comprised of three data centers, which house approximately 100 NSPs, and more than 70 cloud and IT service providers.
NSPs in our flagship Great Oaks campus.
The state of Illinois has recently approved new tax-incentives to drive data center development.[ii] This will help fuel the growth of Chicago’s market and attract both small and larger deployments. The metro currently has 258.1 MW of total inventory with 8.2 MW under construction.
Our five Chicago IBX data centers are home to three major financial and futures exchanges. With 292,131 sq ft of rentable space and 44 MW of sellable power capacity, the five facilities house dense ecosystems for enterprises and service providers in financial services, cloud and IT services, healthcare, and content and digital media industries. The city’s Midwest location is also ideal for business continuity and disaster recovery operations throughout North America.
Sellable power capacity in Chicago
New York Tri-State
The New York Tri-state region has 151.2 MW of total inventory with 8.5 MW under construction. In the first half of 2019, demand was at a record high, with 6 MW of absorption from enterprise customers. This market is dependent on financial services, retail and wholesale businesses that rely on the agility and flexibility of cloud and managed service providers.
Our thirteen IBX data centers in New York/New Jersey make up one of the largest internet exchanges and peering points supporting financial services, ad-tech and retail industries in North America. They provide 729,695 sq ft of rentable colocation space and 99 MW saleable power capacity. Over 500,000 sq ft of this rentable space spans four buildings in our flagship Secaucus campus (NY2/4/5/6), which houses 80+ NSPs, 100+ cloud and IT services providers, 60+ content and digital media providers, 350+ financial services firms, and 650+ unique customers in aggregate. Our Secaucus campus is the preferred location for critical infrastructure providers migrating away from aging telco hotels (primarily in Manhattan) and houses more service providers than any other data center site/campus in New Jersey. It is also the largest retail data center campus in the New York Tri-State area.
And our ability to interconnect our IBX data centers worldwide via ECX Fabric™, demonstrates an additional layer of extensibility across Equinix’s global footprint. For example, if a cloud platform is not available in your local metro, then you can access more than 550 cloud and IT service providers in our other metros globally across ECX Fabric.
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Cloud and IT service providers in our other metros globally across ECX Fabric