Equinix, Inc. (EQUIX), the leading provider of Internet Business Exchanges, is an example of a platform company in the Financials sector. Early on, Equinix employed its scale and “network neutral” policy, which allows customers to connect with one another, to attract large telecom networks. Once Equinix established its leading market position, other telecoms, major enterprises, and e-commerce and cloud computing companies felt compelled to join the Equinix “ecosystem” to easily and efficiently access these networks.
Equinix is a beneficiary of continued growth in Internet traffic, globalization of financial markets, IT outsourcing, cloud computing, and mobility. It converted to a REIT in 2015 (and was moved from the IT to the Financials sector – another example of miscategorization). Earlier this year, Equinix acquired TelecityGroup, making it the largest European data center provider. It also acquired a Japanese data center provider and a firm with technical expertise in migrating customers from legacy data center infrastructure to a hybrid one in which Equinix acts as the intermediary between the enterprise IT shop and the cloud.
From Baron Funds' Summer 2016 Newsletter.
