Equinix NASDAQ: EQIX is planning years ahead to support a higher volume of data center development, with power availability, labor constraints and supply-chain management shaping how it selects and advances projects, Executive Vice President of Global Operations Raouf Abdel said at TD Cowen’s 12th Annual Communications Infrastructure Summit.
Abdel said his responsibilities span the full data center lifecycle, including real estate, energy, design and construction, procurement and operations. That role has become more challenging as the industry faces constraints across multiple resources, including people, manufacturing capacity, real estate and energy.
“Our world has gotten a lot harder,” Abdel said, pointing to community sentiment and other local considerations in addition to infrastructure requirements.
Long-Term Planning Supports Development Pipeline
Equinix has been preparing for a higher development throughput for several years, Abdel said. The company has publicly announced more than 52 projects underway across 33 global markets, while another roughly 50 projects are in planning or development stages, including efforts to secure land, power and necessary supply-chain capacity.
The company is now planning projects expected to be delivered in 2028 and 2029, he said. Land banking, power planning and advance manufacturing purchases are intended to support future deliveries, while projects coming online this year were generally placed on their development path two or three years ago.
Abdel described Equinix’s land bank as “multi-gigawatt,” though he said a cited 3-gigawatt estimate may have been somewhat overstated. The company’s standard development template is around 60 megawatts, according to the discussion.
He said Equinix has changed its approach to site selection as utility constraints have intensified. Rather than acquiring land and subsequently seeking power, the company now starts with the availability of power infrastructure and then identifies land that can support it.
“We won’t take down land if there isn’t some line of sight to that power,” Abdel said.
He said transmission and distribution infrastructure, rather than generation, are generally the principal bottlenecks. A project that requires substantial grid upgrades or new connections could face an extended wait for power, while locations near high-voltage transmission lines or with available utility capacity may offer a more manageable path.
Power Constraints Remain Central Consideration
Although Equinix expects much of its capital spending to be directed toward its top 25 markets, Abdel acknowledged that many established data center markets also face significant power constraints. He said the company’s long planning horizon and its ability to choose among a portfolio of potential projects provide flexibility.
For example, some expansion projects involve later phases at existing properties where Equinix had already established a power plan. The company is building in Ashburn, Virginia, today because those projects have been in development plans for years, he said.
Power availability will remain a significant issue across the data center industry, Abdel said, but Equinix aims to prioritize projects where energy delivery is on track. Of the approximately 100 projects referenced during the discussion, he said the company was confident in delivering about 50, while future selections from the remaining pipeline will depend in part on which projects obtain energy.
Pre-Sales Increase Need for Execution
Abdel said Equinix’s pre-sales are at their highest level to date, increasing the connection between capacity delivery and bookings. Demand in many markets is “insatiable,” he said, leaving less room for project delays.
He attributed the company’s ability to pull forward some capacity to close attention to project risks, supply chains and scheduling. Equinix has sought to preserve schedule flexibility early in projects rather than consuming that flexibility before later-stage issues emerge.
“Our goal, my goal, my organization’s goal is to continue to look at every opportunity to move up as long as we play within the capital envelope that we have,” Abdel said.
He added that the company believes it can progress toward higher delivery levels because it has development plans, land positions and what he called reasonable certainty around energy, though delays remain a potential risk.
Labor and Construction Costs Add Pressure
Beyond energy, Abdel identified skilled trades labor as a major constraint, particularly electricians and plumbers. He cited the greater Chicago area as an example of a market with substantial planned data center activity and insufficient available labor.
Equinix’s long-standing relationships with general contractors and electrical contractors are an advantage, he said, but the broader industry’s development pace is straining the supply of workers. Abdel said electricians can earn $150 an hour in some markets, contributing to construction-cost inflation.
Construction costs also vary widely based on the location and type of project, he said. Abdel cited an indicative range of $10,000 to $20,000, while noting that comparisons can differ depending on whether they include land, power delivery, fiber and supporting infrastructure. Manufacturing-side cost pressure has moderated, he said, but on-site labor costs remain elevated.
To mitigate those costs, developers are assessing how much work can be prefabricated or completed off-site to reduce labor requirements at construction locations, Abdel said.
On the operational side, Equinix is placing workloads in facilities suited to their density requirements. Older sites can accommodate higher-density customers when capacity becomes available, though Abdel said it would not be realistic to place 40- to 50-kilowatt cabinets in a 20-year-old facility. The company has retrofitted some older data centers with liquid cooling, while newer facilities are being designed for higher densities and to be liquid-cooling ready.
About Equinix (NASDAQ:EQIX)
Equinix, Inc is a global provider of digital infrastructure and interconnection services, specializing in carrier-neutral data centers and colocation. The company operates a platform that enables enterprises, cloud and network service providers, and content companies to colocate IT infrastructure, interconnect directly with partners and providers, and access cloud on-ramps and network services in a secure, low-latency environment.
Equinix's offerings include traditional colocation space and power, cross-connects and meet-me rooms, and a suite of connectivity and on-demand services designed for hybrid multicloud architectures.
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