>>Colocation contracts with customers are typically for three to five years, however it is interesting to note that about fifty-three percent of Interxion’s Monthly Recurring Revenue for the nine months ended September 30, 2010, was generated by contracts with terms of one year or less remaining.
This may be considered both as a red flag (more than half of its recurring revenues will be due for renewal in the next few months, which is a risky situation especially for a business whose average contract is supposed to be 4 years) or as an opportunity, as a strong market might allow renewing rates at higher prices. As usual, the market will decide, and the success of the IPO may be seen as a vote of confidence toward this aspect.
Competition, in the meantime, will certainly be looking at this information with interest.
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