Meet me in Little Switzerland

Co-lo seller Equinix offers clients automated B2B services In this age of "coopetition," as categories blur among Web hosting companies, application service providers, managed service providers and content delivery networks, Equinix is trying to carve a niche by raising a flag of truce. The operator of neutral Internet business exchange - or IBX - centers aims to open multiple revenue streams beyond simply renting out space by becoming a neutral ground where Web sites, carriers and ISPs can interconnect and establish business partnerships.

The company tapped another stream last week with the launch of Equinix MATRIX, which stands for Marketplace and Transactions Internet eXchange. MATRIX will allow the residents of Equinix's five current IBX centers to automate the process of researching, evaluating and negotiating for services and equipment from multiple providers.

Prospective buyers can use MATRIX's Web interface to identify and investigate vendors, prepare requests for proposals (RFPs) and negotiate transactions online. MATRIX lets sellers provide real-time electronic catalogs targeted to different categories of buyers and respond to RFPs.

"MATRIX leverages our growing success in assembling a critical mass of leading Internet companies in our IBX centers," said Equinix CEO Peter Van Camp. "MATRIX gives buyers and sellers immediate access to the widest variety of vendors and customers."

Providing that broad range of choices to carriers and Web sites is key to Equinix's future revenue growth. Most of the company's revenue comes from leasing cabinets and from flat fees for direct cross-connects to other customers and connections to Equinix's own central switching fabric.

But Equinix is interested in the incremental growth that can come from matchmaking among the clients co-located in its bunker-like, mission-critical data installations. The MATRIX service is intended to function in tandem with another program, Partners@Equinix, which allows business referrals between Equinix and its IBX partners. The program, which generates revenue for Equinix based on a percentage of the goods and services sold by the participating partners, has been well-received by clients - without jeopardizing Equinix's status as a disinterested broker, Van Camp said.

Under programs such as MATRIX and Partners@Equinix, content companies can strike business relationships with Web hosts, managed service providers such as Loudcloud Networks and Ernst & Young, and content delivery services such as Telseon. Equinix announced that Telseon will be one of the first participants in MATRIX, along with companies such as Excite@Home, StorageNetworks and iBEAM Broadcasting.

"Many other opportunities for new services exist in the white space between where our partners currently provide their offerings," Van Camp said. "We're currently exploring these to ensure that our revenue continues to grow through value-added services."

Equinix's approach is unique in the industry, said GartnerGroup analyst John Coons. "Equinix's business model is to provide very few of the enhanced services for e-commerce, Web hosting and content delivery that others in its space offer," Coons said. "Instead, they enable their varied customer base to sell goods and services to each other and earn revenue from putting them together."

Last month's announcement that Exodus Communications will buy Global Crossing's Web hosting assets - consolidating two of the largest Web hosts - may make Equinix more attractive to customers that want to diversify their outsourced hosting.