The Data Center Market Matures

Do you remember back in the dot com boom when co-location hosting facilities (high-class warehouses with good power and cooling) were touted as a high-value business? One of the interesting and differentiated offerings at that time was Equinix. They offered neither warehouse space nor vertically integrated, locked in services. Instead their ideas were: (1) network neutral (let the user choose his network services provider separately) and (2) really high-quality facilities (when it came to things like security and uptime). We recently caught up with Equinix for the first time in a number of years. They have not only managed to survive the downturn (Exodus certainly didn't) but also have demonstrated steady growth. Their model seems pretty much spot on for the base level of cloud data center infrastructure (reliable and well-connected). It's still not easy to make money in "hosting" (Ellen Hancock was just plain wrong) but rising from those ashes Equinix's business model not only pays the rent but is even capable of providing enough free cash flow the drive expansion in these uncertain financial times.