Summary
Revenue growth at Equinix and in the data center business is strong, but are you sure it's not just increasing power and cooling consumption? How do you know?
Analysis
In order to make a unit revenue figure meaningful, it needs to be balanced against the power attached to that revenue. In this article, the graph shows EQIX revenue increases, but it doesn't show the corresponding increases in capital and power required to achieve those figures. 10 years ago, EQIX power per cabinet was less than 2KW, and today it stands at approximately 3 KW on average. A much more meaningful analysis shows that the current increase is still attractive, but it is not as dramatic as the straight revenue graph might suggest.
Capital investment should be benchmarked in the same fashion. If the all-in figure is $600 / KW, and it takes more and more capital to produce that same $600, then the company is going backwards, not progressing.
WiredRE are experts at this analysis - we benchmark providers nationally.
Everett Thompson consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
