Equinix Inc (NASDAQ:EQIX) could soon be paying shareholders 90% of taxable earnings as a cash dividend.

That may sound like a bold prediction, but here is how it could happen.

The REIT sector recently expanded when Iron Mountain Incorporated (NYSE:IRM) received IRS approval to convert from a C-Corporation to REIT status in late June, 2014. The chart below illustrates how the stock literally soared on the news. The steady rise of Equinix shares since April, also coincides with REIT approvals for Lamar Advertising and CBS Outdoors.

My sense is, based upon these approvals, Mr. Market has already priced some of that news into the shares of Equinix. The company is hopeful that it will receive IRS approval to take advantage of REIT status as of Jan. 1, 2015.

What REIT status means for shareholders
The REIT structure allows companies not pay tax at the corporate level if they pay out at least 90% of taxable income in the form of dividends to shareholders. REITs must derive at least 75% of taxable revenue from real estate activities, as defined by the IRS, as well as conform to a few additional rules and regulations.

Real Estate Investment Trusts tend to attract investors who are looking for high dividend yields.

Digital Realty (NYSE:DLR) has paid a dividend for 10 consecutive years and is currently yielding shareholders ~5.6%. Iron Mountain, following its REIT approval, is projecting a dividend yield of ~6% for 2014.

Three very different business models
The only thing $10.5 Billion market cap Equinix, $6.8 billion Iron Mountain, and $8 billion Digital Realty really have in common is a global customer base and a worldwide facility footprint. However, if Equinix is granted REIT status, it would become the fundamental characteristic they would all have in common.

Iron Mountain document storage and services are key
Iron Mountain counts over 150,000 organizations as customers for its services, including 95% of the Fortune 1000. Iron Mountain has 1,100 worldwide locations, totaling over 67 million square feet. It relies heavily on secure, cost-effective document and electronic file media storage as well as mobile document services for the majority of its revenues.

Disaster avoidance and recovery appear to be key drivers for Iron Mountain datacenter customers. Iron Mountain operates a huge underground National Data Center facility in Pennsylvania to provide solutions for these customers. A new regional datacenter initiative could become a game changer moving forward .

Equinix and Digital Realty: contrasting datacenter models
International Business Exchange, or IBX, datacenters are the backbone of the Equinix network.

Equinix boasts over 132,000 connections between 4,500 enterprise customers. In order to help put that into perspective, Digital Realty -- currently the largest datacenter REIT by market cap, square footage, and revenues -- has 600+ customers. That is because they have traditionally focused on large wholesale enterprise datacenter customers, and not connectivity.

Equinix and Digital Realty both own large scale facilities and campuses. They each have 100+ datacenter facilities around the globe. Digital Realty is by far the leader in total square footage with ~24.5 million square feet of global datacenter space. Equinix is able to make due with: 3.8 million SF in the Americas; 1.3 million SF in Europe and Middle East; and over 740,000 SF in Asia and Australia -- totaling just over 5.8 million SF of colocation space.

Digital Realty has recently began to focus more on connecting all of its datacenters and on developing solutions to better serve smaller customers.

Why Equinix has a competitive moat
The Equinix IBX datacenters are hubs of connectivity and high density colocation. The "network effect," of almost 1,000 networks running through IBX datacenters is what helps to create the Equinix moat.

The recent announcement of the EQIX Cloud Exchange, "a multi-cloud switchboard," provides yet another competitive advantage through partnerships with cloud providers such as Amazon Web Services and Microsoft Azure.

Equinix is the only place where customers can directly connect to these two leading cloud providers.

Growing with the cloud
Equinix runs mission critical infrastructure for the world's largest cloud computing providers including: Google, Facebook, Twitter, Microsoft and Amazon.com. All of these megadata companies own and operate huge datacenters which contain their server farms. However, they all also take advantage of the Equinix global network to distribute this information to customers.

Investor takeaway
Equinix is uniquely positioned to benefit from the explosive growth of big data, mobile devices and cloud computing. Equinix is scheduled to report earnings for the quarter ended this past June 30th on July 30, 2014. How exciting would it be if CEO Steve Smith would be able to discuss the effects of REIT approval for shareholders?