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Press Release -- November 11th, 2010
Source: Equinix
Tags: Construction, Exchange, Low Latency, Telepresence, Video

Equinix Helps Businesses Succeed in Growing Digital Economy

New Customer Deployments Leverage Value of Platform Equinix

FOSTER CITY, CA — November 11, 2010 — Today, at its financial analyst event, Equinix (NASDAQ:EQIX, news, filings), a provider of global data center services, highlighted new customer implementations that illustrate the company’s central role in the digital economy, including global deployments from AboveNet, ACTIV Financial, OnLive and VeriSign.

A recent Gartner, Inc. report1 on “hyperdigitized” industries states, “Gartner estimates that the hyperdigitizing sector represented nearly 20% of the entire U.S. GDP in 2009. It is outgrowing the rest of the economy and will reach 23% of the economy by 2020.” Per the report, “Hyperdigitization is the accelerated digitization of a large and growing sector of the world economy, the sector that is largely information-based. This sector is made up of industries delivering nonphysical digital services, increasingly mostly online.” According to Gartner, hyperdigitized industries include: “the communications, entertainment and media industries, but also many parts of IT-enabled business services that deliver information, content, applications or process services, among many others.” These businesses depend on specialized services, specifically “infrastructure services, access to scalable, reliable, standard infrastructure environments” in order to succeed in their core business and realize their growth potential.

Equinix offers digital businesses a global platform of highly reliable data centers that are network dense and house key ecosystems in financial services, cloud and IT services, networks, digital content, mobility and others. By leveraging Equinix’s global platform, businesses can connect with partners, customers, suppliers and others in their digital ecosystem to ensure fast, reliable delivery of optimized content and applications.

“For over a decade Equinix has been anticipating – and building a business – to meet the needs of the digital economy,” said Steve Smith, CEO of Equinix. “One of the reasons Equinix is on target to generate more than $1 billion in annual revenues in 2010 is because of our ability to get ahead of the trends in technology and deliver services to support our global customers. The hyperdigitization of the economy aligns with our strategies to enable businesses to thrive under these shifting market conditions.”

In the financial services sector, Equinix enables the exchange of time-sensitive financial data by providing low latency connectivity to buy and sell side firms, trading venues and other market participants. Today, Equinix announced that ACTIV Financial has extended its presence throughout Asia-Pacific, Europe and North America with Equinix.

“Our work with Equinix represents our continued commitment to providing fast, cost-effective access to low latency global market data solutions,” said Frank Piasecki, president of ACTIV Financial. “Equinix’s rich network and global platform provide the close proximity our clients demand, enabling us to optimize our customers’ experience as they leverage ACTIV’s low latency global data sources.”

In the digital content sector, Equinix provides a platform that aggregates the critical mass of content providers, network connections and mobile and broadband networks required to deliver high-bandwidth, rich-media applications such as video, telepresence and interactive games. Today, Equinix announced that OnLive, the pioneer of on-demand, instant-play video games, has leveraged Equinix’s global platform to provide a great gaming experience. Complete details are available here.

Charlie Jablonski, VP of Operations at OnLive, said: “OnLive makes the impossible possible by providing consumers instant access to top video games over a broadband connection. Equinix is at the epicenter of our strategy. Having access to a large ecosystem of carriers and potential content partners has greatly expedited our rollout schedule and made scaling the service seamless and efficient. The power of Equinix’s global platform is evident every time a gamer uses OnLive to play instantly.”

In cloud computing, the Equinix global platform enables cloud service providers to deliver applications and services faster.

“We chose Equinix, a long time data center service provider, as a partner for jointly marketing new cloud-based solutions,” said Ben Petro, senior vice president, VeriSign Network Intelligence and Availability. “The ability to easily launch into new markets on the Equinix platform and tap into its carrier-rich ecosystem for new business opportunities will help us scale our SaaS offerings aimed at helping companies of all sizes maintain high network availability.”

In the network services sector, Equinix enables network service providers to quickly and cost effectively expand into new markets and extend their service portfolios on a global scale. Today the company announced its customer AboveNet operates in Equinix IBX data centers throughout Asia-Pacific, Europe and North America.

“As Equinix continues to build data centers in the top metro markets, we’re leveraging their investment to extend our next- generation, high bandwidth services to more enterprise and carrier customers in strategic locations around the world,” said Rajiv Datta, senior vice president and chief technology officer at AboveNet. “Equinix gives us access to global, regional, and local networks, which enables us to enter new markets and expand our service offerings to its vast customer base of 3,700 potential customers and partners.”

According to the Gartner report, “this {hyperdigitization} sector will have a profound effect on the IT services business in a number of ways. It is a part of the economy, a large part that, being based on digital content and services, has few theoretical limits to its growth except the human imagination. It is now unleashed by the global technology and communications infrastructure…The growth potential is astounding.”

1Gartner Research, “Hyperdigitization Creates Major Opportunity for IT Services Providers,” by Rolf Jester, August 19, 2010

About Equinix

Equinix, Inc. (NASDAQ: EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. More than 3,100 enterprises, cloud, digital content and financial companies connect to more than 600 network service providers and rely on Platform Equinix to grow their business, improve application performance and protect their vital digital assets. Equinix operates in 35 strategic markets across North America, Europe and Asia-Pacific and continually invests in expanding its platform to power customer growth.

Learn more at

Press Contacts

Equinix Media Contact (Global)
Joan Powell
Equinix, Inc.
(650) 513-7098

Equinix Media Contact (U.S.)
Scott Blevins
+1 (415) 992-4400

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix’s filings with the Securities and Exchange Commission. In particular, see Equinix’s recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

Equinix and IBX are registered trademarks of Equinix, Inc. International Business Exchange is a trademark of Equinix, Inc.

Non-GAAP Financial Measures

Equinix provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Equinix uses non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow to evaluate its operations. In presenting these non-GAAP financial measures, Equinix excludes certain items that it believes are not good indicators of the Company’s current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges and acquisition costs. Legislative and regulatory requirements encourage use of and emphasis on GAAP financial metrics and require companies to explain why non-GAAP financial metrics are relevant to management and investors. Equinix excludes these items in order for Equinix’s lenders, investors, and industry analysts who review and report on the Company, to better evaluate the Company’s operating performance and cash spending levels relative to its industry sector and competitors.

Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of our IBX centers and do not reflect our current or future cash spending levels to support our business. Our IBX centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of our IBX centers do not recur and future capital expenditures remain minor relative to our initial investment. This is a trend we expect to continue. In addition, depreciation is also based on the estimated useful lives of our IBX centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our IBX centers, and are not indicative of current or expected future capital expenditures. Therefore, Equinix excludes depreciation from its operating results when evaluating its operations.

In addition, in presenting the non-GAAP financial measures, Equinix excludes amortization expense related to certain intangible assets, as it represents a cost that may not recur and is not a good indicator of the Company’s current or future operating performance. Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which Equinix believes are not meaningful in evaluating the Company’s current operations. Equinix excludes non-cash stock-based compensation expense as it represents expense attributed to equity awards that have no current or future cash obligations. As such, we, and many investors and analysts, exclude this stock-based compensation expense when assessing the cash generating performance of our operations. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to the Company’s decision to exit leases for excess space adjacent to several of our IBX centers, which we did not intend to build out, or our decision to reverse such restructuring charges. Equinix excludes acquisition costs from its non-GAAP financial measures. The acquisition costs relate to costs the Company incurs in connection with business combinations. Management believes such items as restructuring charges and acquisition costs are non-core transactions; however, these types of costs will or may occur in future periods.

Investors should note, however, that the non-GAAP financial measures used by Equinix may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. In addition, whenever Equinix uses such non-GAAP financial measures, it provides a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.

Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how it was calculated for the periods presented within this press release.

As used in this document, “Deloitte” means Deloitte LLP. Please see about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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