Equinix becomes a default choice

Investor's Business Daily
Satisfying A Need For Speed
Friday August 8, 6:04 pm ET
Pete Barlas

Internet networking solutions firms serve as the tech industry's information backbone, helping the customers push data across the ever-expanding Internet.

The group comprises a hodgepodge of 20 public companies. Most don't compete with each other. But all are working to solve various bottlenecks in the Internet infrastructure.

Akamai Technologies (NasdaqGS:AKAM - News) sells a content and application delivery service for pushing video and other Web content online. AsiaInfo Holdings (NasdaqGM:ASIA - News) sells back-office software support services while Equinix (NasdaqGS:EQIX - News) provides data center and interconnection services.

The emergence of social network sites such as Facebook and of Internet-based "cloud computing" services from Amazon and others should help generate more revenue for companies like Equinix that sell interconnection data services, says Trip Chowdhry, an analyst for Global Equities Research.

"They need to put their data centers somewhere, so Equinix becomes a default choice," he said.

Outsourcing data center services to a company such as Equinix reduces headaches and costs, Chowdhry said.

"People don't want to be worried about hiring and firing various administrators," he said. "The costs of operating a data center is dramatically reduced if they put it in Equinix."

Upside: Network solutions providers should benefit as more companies grow to rely on the Internet.