Equinix, Inc. (EQIX), which is classified under Real Estate as a specialized REIT, is the leading provider of internet business exchanges. Early in its lifecycle, Equinix leveraged its scale and “network neutral” policy, which allows its customers to connect with one another, to take on large telecom networks as customers. Once Equinix had solidified its leading market position, other telecom networks, major enterprises, web commerce companies, and cloud computing companies felt compelled to join the Equinix “ecosystem” in order to easily and efficiently access these networks. Its stock has appreciated more than five-fold since we first invested. We believe it will continue on its strong growth trajectory driven by key long-term trends, including growth in internet traffic (including video), globalization of financial markets, IT outsourcing, cloud computing, and mobility. Equinix has also been active on the acquisition front, including its largest European competitor. As these acquisitions become fully integrated, we believe they will create meaningful cost and revenue synergies, further enhancing Equinix’s global platform.
From Baron Asset Fund first quarter 2017 shareholder letter.
