Equinix is engaged on considered one of its first xScale knowledge facilities in the US
Trillions of {dollars} are pouring into the information middle market, and the websites can’t be constructed quick sufficient. A gigawatt of capability right here, a gigawatt there. Each day, it looks as if the promised scale of latest websites will get greater and greater — in an business tendency towards what Chip Newcom, senior director of investor relations at Equinix, jokingly calls the “bragawatts.”
Equinix has been within the knowledge middle enterprise for nearly three a long time, and within the hyperscale DC enterprise for almost eight years, targeted on markets overseas with its xScale knowledge middle design. After lining up a three way partnership in late 2024 with $15 billion in funding, the California-based firm is increasing its xScale hyperscale knowledge middle enterprise to the U.S., with a brand new website within the works in Hampton, Georgia, close to Atlanta.
Tiffany Osias is the managing director of Equinix’s xScale enterprise. Talking at this week’s KeyBanc Expertise Management Discussion board, she mentioned the most recent progress on the brand new xScale website and Equinix’s technique in pursuing “generational” belongings amid a aggressive panorama that’s already being in comparison with the dot-com growth (and bust).
The Hampton, GA website of “a number of hundred acres” is at the moment being leveled in an effort to prep for development, Osias mentioned. “We’ve got bulldozers pushing filth day by day and getting it pad- prepared,” she mentioned, and Equinix is working with an area energy firm on supplying the positioning. The corporate is “actively different campuses as properly,” based on Osias.
“The ambition is to have a handful of multi-hundred-megawatt campuses throughout the Americas area,” she added.
Equinix’s xScale versus retail enterprise
Osias was in Equinix’s retail knowledge middle enterprise earlier than taking over the xScale effort. The distinction between Equinix’s retail knowledge middle enterprise and xScale is, because the title implies, considered one of scale: The retail enterprise means many extra prospects in a knowledge middle, with smaller particular person footprints. (Equinix has about 10,000 prospects throughout its portfolio.) For xScale websites, there might be fewer prospects with bigger footprints: One firm may lease a whole website or campus.
The information facilities constructed by xScale will even be bigger, denser deployments than those that Equinix has constructed previously. Osias mentioned that prospects might be shopping for not less than 30 MW of deployment capability, in comparison with prospects in retail who purchase in a lot smaller
increments of as little as 5-15 MW.
In Equinix’s retail enterprise, a single knowledge middle constructing may take a number of years to fill; with xScale, a single buyer may fill a whole constructing or multi-phase campus, which means the corporate might want to extra quickly transfer onto the subsequent growth mission to satisfy demand.
And what does that demand appear like? Newcom mentioned that all the capability the corporate is constructing out might theoretically be provided to 1 hyperscaler — and never fulfill them for a single yr. “That’s how a lot demand there may be on the market available in the market,” he mentioned.
Siting, latency and energy
With that context, Osias mentioned that the corporate is trying on the alternatives accessible and might be “extremely targeted” in the way it pursues them. She additionally made it clear that after almost 30 years in enterprise, Equinix is considering “generational” belongings somewhat than chasing any single pattern.
“We’re not interested by assembly one pattern in a second in time, we’re interested by sturdiness and making a platform that may seize a number of traits over time,” Osias mentioned. Which means knowledge facilities with the pliability to have the ability to deal with AI coaching, AI inference, cloud or enterprise workloads — and selecting websites which are shut sufficient to main metro areas to maintain latency affordable, somewhat than pushing far out into geographically distant areas the place land or energy is likely to be extra available.
“Should you’re going to seize all of these workloads, you’ll want to take into consideration latency as properly, so these prime metros are nonetheless vital to us,” she defined. “It doesn’t imply we have now to be in downtown Atlanta — such as you’re seeing play out right here with this [Hampton, GA] campus, we’re about 40 miles away. However we’re nonetheless staying very near these metro facilities, as a result of the interconnection again into Equinix can be actually vital for the success of xScale.”
Requested about how the corporate is coping with the ability wants of knowledge facilities, Osias responded: “Energy is definitely a problem proper now,” and added that in jurisdictions which have energy availability challenges, Equinix takes “an all-of-the-above form of technique to energy.” She mentioned that Equinix will take what it may possibly from the native grid and also will have a look at on-site era capabilities and gasoline cells in some places, to bridge the hole between what’s wanted and what the native grid can present.
Tuning out the ‘braggwatts’
All of that complexity — capital depth, lengthy timelines, extremely variable part provide chains — make the information middle enterprise a troublesome one, that’s now underneath excessive stress from red-hot demand.
“Anybody who has been on this area for awhile is aware of constructing and setting up and working a knowledge middle is difficult enterprise. It’s a very arduous factor to do,” Osias mentioned. “And we’ve received a protracted observe file of having the ability to do that. Folks is likely to be getting into it for one particular function — we’re within the knowledge middle area for a large number of functions.”
It’s simple to speak about constructing gigawatts of knowledge middle capability — these “bragawatts” — and never really easy, or quick, to really do it. Particularly when individuals begin working the numbers and notice how a lot capital might be tied up, when it takes about an estimated $10-$12 million to construct out a megawatt of knowledge middle capability.
“There is a component of bragawatts proper now, by way of everybody saying, ‘Properly, I’m going to construct a gigawatt, and I’m going to construct 5 gigawatts.’ The straightforward truth is, is that’s you concentrate on a gigawatt — once more, should you’re constructing at $10 million a megawatt — that’s $10 billion of capital that you must put to work,” Newcom mentioned. “And never solely do you must have lots of capital to construct knowledge facilities, however you additionally then should have energy, you must have all the mechanical and electrical to try this.”
Some hyperscalers (most not too long ago, Meta) have already began to unload some knowledge middle initiatives within the works or usher in different companions for capital, he famous.
Osias mentioned one other vital side of Equinix’s observe file in constructing knowledge facilities is its historical past and dealing relationships with suppliers of servers, cooling and different elements, to help each inside design flexibility and keep abreast of latest applied sciences and timelines, as knowledge middle deployments get extra dense and power-hungry.
Siting and energy are vital concerns, however elements are one other supply of delays; having sense of timelines, and having a whole lot of hundreds of thousands of {dollars} of stock on its books already, means not having to attend for mills or different particular {hardware}, and having the ability to select to deploy at websites throughout its retail or xScale enterprise that may carry probably the most environment friendly return on capital, Newcom added.
Constructing generational belongings additionally means being prepared to attend. Equinix is accustomed to coping with the lengthy timelines that include getting energy to new websites. Osias mentioned that sometimes at a website, energy isn’t accessible upfront, and that relying on the time-horizon that Equinix has in thoughts, energy arrival timeline of three, 5 and even eight years out are “completely acceptable” throughout its “huge land financial institution” of owned properties for growth.
Equinix’s transfer to carry its xScale enterprise to the U.S. displays each the surging demand for hyperscale capability and the challenges of delivering it — which the corporate is assured that it may possibly deal with by leaning on its expertise, provider relationships and capital sources to navigate a newly crowded aggressive panorama, and tuning out the “bragawatts” in favor of execution.
