The summer season officially started this week, and along with it has come the announcements of several expansions that span the internet infrastructure sector.
In the metro fiber space, Zayo is expanding deep into Youngstown, Ohio. They will be lighting 60 miles in order to reach key locations such as mobile switching centers, central offices and data centers in the metro area. The first customer apparently will be datacenter and consulting firm DRS, LLC. Youngstown is not a place many alternative providers have dabbled in, which seems to fit well with Zayo's footprint and overall strategy.
In the managed service space, NTT America has opened an Arcstar PoP in Atlanta. Of course, their backbone has long had a node in Atlanta - everyone's does. However, their presence was mainly IP transit, whereas Arcstar is their managed services arm that targets multinational companies - especially those with substantial Asian operations. This expansion will bring the company's managed services deeper into the southeastern US market allowing them to serve those customers better and perhaps find some new ones.
Global Crossing just today announced the extension of its EtherExtend product to 26 new locations, adding Houston, Sunnyvale, Singapore and Frankfurt. The service, which they introduced in January, manages Ethernet access to the company's IP backbone via third party connections, and is an effort to control and manage access costs and thereby expand the company's addressable market. They hope to be service-ready in 70 markets by the time New Year's rolls around.
And in the datacenter space, Equinix has decided that three datacenters in Zurich just weren't enough, so they're going to build a fourth. The new facility will add 32,000 gross and 12,920 sellable square feet to their offerings. That doesn't sound like tons, but it more than doubles their current footprint - those other three datacenters are pretty small. While there are datacenters in Zurich, it's not amongst that select group of cities with huge clusters. Equinix's expansion there may reflect the fact that demand is spilling over into secondary markets.
What do all these expansions have in common? Capex is being spent in response to market opportunities, and that is good news any way you slice it. It implies that companies across the sector think that the sales drought we all went through in Q4 and Q1 either is easing or has eased already. I wonder if we will see that in Q2 results next month, or if it will only really blossom in Q3. It doesn't matter though, so long as it doesn't sputter out.
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