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New Technology Trends Driving Demand for Equinix’s Data Centers

Anirudha Bhagat - Author

Aug. 3 2018, Updated 10:31 a.m. ET

New technology trends to generate huge data

Emerging trends in the technology sector such as artificial intelligence, big data, cloud computing, IoT (Internet of Things), bring your own device (or BYOD), flash storage, social networking, high-quality video, and wearable devices have brought massive change to the IT storage industry. 

Also, increased mobile and Internet penetration, growing media and widespread implementation of ERP (enterprise resource planning), and CRM (customer relationship management) solutions have resulted in a data explosion.

According to International Data Corporation (or IDC), the total data generated worldwide is expected to cross 163 zettabytes (where one zettabyte is equivalent to one trillion gigabytes) by 2025 from 16.3 zettabytes in 2016.

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Cloud storage needs of the future

The robust growth in the amount of data, the complexity of data formats, and the need to scale resources at regular intervals are requiring enterprises to turn to cloud storage vendors. This is expected to be a much less costly option for them instead of building infrastructure within the office premises.

Cloud storage vendors help organizations store data and applications remotely, which can be accessed at any time from anywhere via the Internet. With this, users can access their files and settings from any location and using any device.

The growing adoption of cloud-based storage solutions is driving demand for cloud-dedicated data centers. According to ResearchAndMarkets, the global data center market is expected to reach $47.34 billion by 2023 from $25.52 billion in 2017, representing a CAGR (compound annual growth rate) of 10.85%.

Given such tremendous growth prospect in the data center service space, Equinix’s (EQIX) global expansion strategy seems to be headed in the right direction. With its sustained focus on acquiring data center assets such as Metronode, Itconic, and Infomart Dallas is expected to position it to capitalize on this opportunity.

Peers also expanding to garner market share

In the data center REITs space, Equinix is not alone in expanding its data center business. Among its main competitors, Digital Realty (DLR), CoreSite Realty (COR), and CyrusOne (CONE) have made significant acquisitions in the recent past. 

Digital Realty bought DuPont Fabros in late 2017, CyrusOne purchased the European data center assets of Zenium last year, and CoreSite Realty completed the acquisition of U.S. Colo this April. Equinix makes up ~5.2% of the Real Estate Select Sector SPDR Fund ETF (XLRE).


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