Equinix (Nasdaq: EQIX) on Wednesday announced it would spend $43 million to build its fourth International Business Exchange (IBX) data center in Tokyo.
The new data center, which is called TY4, is being built to address the growing customer demand for data center services in the Ōtemachi area in addition to providing a larger set of network connectivity options.
TY4 will be launched in two phases and will offer total capacity of 750 cabinet equivalents.
Set to be completed in Q3 this year, the first phase will offer initial capacity of 450 cabinet equivalents. To accommodate the need for more customer interconnections, TY4 will also offer customers direct fiber connectivity to Equinix's three other IBX data centers in the city.
Equinix could not have chosen a better time to expand its data center holdings in Japan.
An IDC report forecast that Japan's data center outsourcing market will reach JPY 1.4 trillion (USD 20 billion) in 2015. During the five-year period of 2010 to 2015, Japan's colocation market will have a CAGR of 4.2 percent, reaching JPY 742.6 billion (USD 9.26 billion) in 2015.
Ōtemachi is another prime location to build a data center as 90 percent of Internet traffic is being exchanged in the area. What's more, the city is also the home of over 4,000 large international enterprises and financial firms that are prime targets for the IBX service.
Asia Pacific countries like Japan have become a growing focus of Equinix's expansion efforts. The data center provider also expanded its presence in Hong Kong, Shanghai and Singapore last May when it purchased Asia Tone.
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