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Direct Access to Oracle Cloud in Asia Pacific via Sydney IBX (revised)

The global data center operator, Equinix Inc. EQIX, recently announced that it will now sell direct, private access to Oracle’s ORCL Oracle Cloud in its Sydney, Australia, International Business Exchange (IBX) data centre, with immediate effect. The access will be available for Oracle Infrastructure as a Service (IaaS), as well as Platform as a Service (PaaS) through Oracle Cloud Network Service – FastConnect and the Equinix Cloud Exchange.

We believe that the recent development will help Oracle in expanding its footprint across the Asia Pacific, particularly in Australia, and address rising demand for cloud services in the region. The increase in demand is also evident from the findings of an independent research firm, International Data Corporation (IDC).

Per IDC, about 67% of the total surveyed Australian enterprises have been using cloud services for more than one or two applications or workloads. Another research firm – Gartner – estimates the Public Cloud Services market to grow 18% in 2017 and reach $246.8 billion. Of this, IaaS is projected to make the highest growth of 36.8%.

The recent development is in line with the two companies’ partnership agreement entered in May this year, under which Equinix has been allowed to provide high-performance direct network access to Oracle Cloud globally. With the latest addition of Sydney, Equinix now provide Oracle Cloud in five global markets. Notably, currently the Equinix Cloud Exchange is available in 21 markets globally.

With the collaboration, Equinix will help Oracle customers get the benefit of the former’s cloud services, including secure connection, outstanding scalability and infrastructure dependability.

Cloud Exchange provides seamless, on-demand and direct access to multiple clouds, across multiple global networks. These virtual circuit connections enable customers to use the cloud of their choice with dedicated, low-latency connections.

The partnership will enable Oracle to expand the reach of its cloud platform and provide private connectivity to corporate customers globally in an uncongested and cost-effective manner.

With this agreement, Oracle becomes the latest member of Equinix’s Cloud Exchange, after Amazon AMZN, Microsoft MSFT Alphabet’s Google Cloud and IBM Cloud. The company’s member list also includes Salesforce CRM, which is Oracle’s biggest competitor in the customer relation management market.

We believe that the recent deal is beneficial for both the companies. By using Equinix’s Cloud Exchange, Oracle will be able to expand its footprint globally and address rising demand for cloud services.

On the other hand, an increase in public cloud services would automatically boost data center demand. This will ultimately benefit Equinix by bringing in more contracts, thereby bolstering the company’s revenues.

Shares of Equinix have been steadily treading higher on a year-to-date basis. The stock returned approximately 17.1% compared with the Zacks REIT-Equity Trust industry’s decline of 9.1%.

Currently, Equinix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NOTE: This article has been reissued to correct an error. The original version, posted July 7, 2017, should no longer be relied upon.

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