Thursday, December 16, 2010

Tech 2011 outlook: Cloudy, chance of takeovers


>>“The data center market did well in 2010, and I certainly expect it to an area of significant focus and investment next year, as well,” said Erik Suppiger, managing director of Signal Hill Capital Group. “There’s a growing need for work-related applications and a growth in dynamic, bandwidth-intensive content that’s driving content providers to think about where to invest for their needs.”

One of the companies that Suppiger is high on for next year is Equinix Inc., a provider of data-center operations that companies often use for hosting their applications and information in a so-called “cloud” environment. On Oct. 6, Equinix shares plunged more than 33% after the company issued revenue warnings for its third quarter and entire fiscal year. That warning took down many other data-center operators along with Equinix. However, Suppiger said he believes the selloff was overdone. “The [stock] pullback made them even more attractive,” Suppiger said. “Right now, a lot of investors are trying to determine whether the market is reaching maturity. We believe the demand is still there and there will be a need for more data center capacity.”

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