Why Amazon Is Partnering with Equinix

Amazon’s (AMZN) cloud services unit, Amazon Web Services (or AWS), and Equinix (EQIX) have strengthened their partnership. Equinix will provide private connectivity and direct network access to AWS Direct Connect services. Per the agreement, AWS Direct Connect will be available to customers in four other IBX data centers in Helsinki, Madrid, Manchester, and Toronto, bringing the total number of Equinix metro IBX data centers to 21.

Equinix in collaboration with AWS Direct Connect could help Amazon Web Services customers to securely connect to the cloud platform and ensure the availability of applications and workloads. On the other hand, AWS will be able to expand its cloud services reach and provide connectivity to corporate customers globally.

Amazon’s cloud services could benefit over the long term with this partnership as more and more cloud service vendors like IBM (IBM), Alphabet (GOOGL), Microsoft (MSFT), and Oracle are looking to Equinix’s data center and interconnection services.

Amazon Web Services continues to be the world’s largest provider of cloud services, and AWS holds more than a third of the global market. AWS is also growing more rapidly than the overall Amazon business. While the cloud unit sales rose 42%, Amazon’s total top-line growth was 34%. In 3Q17, IBM and Oracle reported cloud revenue growth of 20% YoY and 51% YoY, respectively, in their quarters corresponding to Amazon’s 3Q17.