Dubai's du, US tech firm launch $80m alliance

California's Equinix Inc and du, a telecom operator in th eUAE, launched an alliance on Tuesday to open an $80m data centre in Dubai to offer faster internet speeds in the Gulf region.

In a joint statement, the companies said the hub would be the first of its kind in the Middle East and would be operational from January 2013. It will be "carrier neutral," meaning telecom operators other than du will be able to use it.

Equinix, which has about 90 data facilities globally and 4,000 customers including IBM and HSBC, has bought a newly-built mid-sized data centre in Dubai and will invest $40m in the project.

Du will invest a similar amount over the next five years, providing connectivity and managed services to tenants, which are likely to include financial institutions, telecom carriers from other regions and internet content providers.

The alliance also plans to open a second facility in Abu Dhabi that would require additional investment, but the companies declined to provide further details.

"People's expectations about the speed of throughput and content is constantly rising and there are many technologies to improve performance, but one of the fundamental ones is to locate the content as close as possible to the end user," Eric Schwartz, Equinix president for Europe, Middle East and Africa, told reporters on the sidelines of a news conference.

"With this facility the more applications and content that are located here in the Middle East versus being served somewhere in Europe or Asia, people will see meaningful performance increases."

The bulk of data held at the Dubai centre is likely to come from international firms using it as a hub to re-route traffic to and from other regions, with some traffic diverted locally, said Mahesh Jaishankar, du vice-president for investments.

Du said it would not seek to extend the alliance to other Middle East countries, but Equinix said it may expand its presence in the region.

"Our historic concentration is in the major European, American and Asian capitals - this is the next step for us," Schwartz added. "A lot will depend on the regulatory and commercial environment."