Data center providers Digital Realty, Equinix and Keppel Data Centres see results in Q1 2020, despite pandemic

By May 2020News

Data center providers Digital Realty, Equinix and Keppel Data Centres see results in Q1 2020, despite pandemic

Power Partners

Data center providers Digital Realty, Equinix and Keppel Data Centres see results in Q1 2020, despite pandemic

Data center providers Digital Realty, Equinix and Keppel Data Centres have reported revenue growth or stability in Q1 2020, despite damaging effects from the pandemic on the global economy.

This growth is likely due to the greater demand for connectivity throughout the world, especially with more businesses forced to go digital and data center operations categorised as an essential service in many countries.

Digital Realty pulls in US$823 million for Q1 2020

Digital Realty celebrated a revenue of US$823 million in the first quarter of 2020, with a net income of US$229 million.

This revenue success resulted in a 5% increase from Q4 2019 for one of the leading global providers of data center, colocation and interconnection solutions.

The CEO of Digital Realty, A. William Stein, said: “Our business is highly resilient, and we remain confident that our global platform will continue to deliver sustainable growth for all stakeholders.”

Digital Realty also signed bookings in Q1 2020 expected to generate US$75 million in annualised GAAP rental revenue, which includes US$9 million from interconnection solutions.

Mr Stein added: “Despite the challenging environment, we continued to execute on our strategic plan, closing our highly strategic combination with Interxion.”

The combination agreement with Interxion, a European provider of cloud-neutral colocation data centre services is predicted to generate US$10 million in rental revenue following total bookings signed in this quarter. 

This agreement is expected to ‘significantly enhance the ability to create long-term value for the customers, stockholders and employees of both companies’.

Equinix increases revenue by 6% to US$1.445 billion

Equinix, the global interconnection and data center company, delivered their 69th consecutive quarter of revenue and interconnection growth, with an increase of 6% to US$1.445 billion.

The company achieved a net income of US$119 million and an operating income of US$253 million, representing a 19% decrease largely due to the sale of assets to the EMEA xScale joint venture last quarter.

Equinix’s interconnection revenue was a highlight with a growth of 14% in Q1. To keep up with the demand for interconnected products, Equinix added 6,800 interconnections, fuelled by content video streaming and unified communication services.

The President and CEO of Equinix, Charles Meyers, said: “The Equinix business continues to perform well and show resiliency through these times of uncertainty, enabling us to remain focused on the clear set of priorities we laid out at the beginning of the year.”

The data center provider looks to invest in its people, evolve their platform, simplify their business to drive operating leverage and expand their go-to-market engine to fuel long-term growth.

As part of the company’s hyperscale initiative, they signed a second US$1bn venture with GIC, Singapore’s sovereign wealth fund, to develop and operate xScale™ data centers in Japan.

Equinix also reinforced their commitment toward 100% renewable energy use and revealed their Internet Exchange traffic had increased by 44% since last year, reflecting the sudden global shift to remote and work-from-home practices and highlighting the need for reliable data centers.

Keppel Data Centres stays strong and increases interest amid the pandemic

The Singaporean conglomerate Keppel Corporation announced their data center and connectivity solutions stayed strong and saw increased interest for new data center capacity amid the pandemic.

Keppel Data Centres saw a net profit of S$4 million in Q1 2020, amongst a total net profit of S$174 million for Keppel Infrastructure.

Loh Chin Hua, the CEO of Keppel Corporation, said during a conference call: “We are still

very bullish about the data center space. The business model we have with using private funds to work with investors to build this and then of course, we can then hopefully, when it is derisked, monetise it by selling it to Keppel DC REIT.”

Recently, Keppel Telecommunications & Transportation sold a small 2.33% stake in Keppel’s data centre real estate investment trust to realise the profits from their data center business and release the funds to seize other opportunities. The transaction is expected to gain about S$46 million.

Mr Loh Chin Hua added: “ After the sale, Keppel T&T continues to be the single largest unitholder and sponsor of Keppel DC REIT, and we remain committed to the long-term growth of the REIT.”

As of writing, Keppel DC REIT is sitting strongly at the top of all other REITs in Singapore.

Keppel Data Centres is also continuing to explore innovative and energy efficient data centers with its recent partnerships to investigate the feasibility of a Floating Data Centre Park and liquefied natural gas power solutions.

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