Equinix’s software-defined interconnection platform now has some 13,000 virtual connections, according to Equinix CEO Charles Meyers.
Meyers, who gave a keynote at the Citi 2019 Global TMT West Conference in Las Vegas on Tuesday, said the company’s interconnection business is booming.
“The Equinix Cloud Exchange Fabric, ECX Fabric, has been a huge success for us both in terms of its core metrics on uptake and revenue, and connection,” he said, adding that the platform’s 13,000 virtual connections “is a multiple of anybody else’s in terms of interconnection.”
And Meyers scoffed at that the idea of the platform competing with SDN. “It’s a bit befuddling to me that there continues to be so much noise around that — that SDN somehow represent some kind of crazy bear base on interconnection doesn’t make any sense to me,” he said. “I very much see it as complimentary.”
The platform actually uses SDN to provide secure, private connections between Equinix customers, and between customers and cloud services providers including Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), IBM Cloud, Alibaba Cloud, and Oracle Cloud.
Competitive or Complimentary?
But it also appears to compete with service providers like AT&T, Comcast, and Verizon that use SDN and their presence in Equinix facilities to offer greater value and services to their own customers. With ECX Fabric, enterprises can connect directly and privately to their customers, suppliers, and cloud providers directly through Equinix — they don’t need to have a separate connection with a service provider.
Meyers said the platform doesn’t compete against these carriers. The companies that should feel threatened by Equinix’s interconnection business are vendors selling commodity 100-cabinet server racks for data centers, he added. And about that type of IT footprint, Meyers questioned: “Why the hell is that there to begin with? Why isn’t that in the cloud?”
“The reality is that the ability for someone who has private infrastructure somewhere else, who wants to access an ecosystem endpoint — whether that be a cloud on-ramp or a network or some other member of the ecosystem — that capability has been there since day one,” Meyers said. “It’s called a network. And the only thing that’s changed is what used to take 30 to 60 days to provision that capability with a carrier can now be done in minutes.”
In fact, the ability to connect to these service providers inside Equinix data centers is driving the company’s enterprise business, which remains its fastest growing vertical market.
“What we’re seeing is the architecture of choice is global, highly distributed, cloud-first, and multi-cloud,” he said. “These are the things that are driving enterprise interest. And why they want to deploy an architecture like that at Equinix is because they think the architecture needs to be close to the interconnected edge to get performance, security, cost and economic benefits of aggregation, flexibility, and compliance. We represent the nexus between those things.”
Where Is the Edge?
But Meyers did acknowledge that the need for edge compute and storage may represent a future challenge for Equinix. While the data center giant continues to spend millions building mega facilities in top-tier markets, there’s another school of thought that says 5G and emerging technologies like IoT will necessitate edge data centers in smaller markets or even at the base of cell towers.
“We do believe the evolving edge is a real, strategic question for the company,” Meyers said. But right now the need to push compute and storage closer to end devices is more theoretical than practical, he added.
“Most of the things we’ve seen in terms of opportunities for things like IoT use cases and workloads, we’ve been very successful in competing with our current macro edge,” Meyers said. “The harder question is: do we play [at the extended edge]? Do we expand our franchise into it? Do we partner with others? And how do people differentiate at that more extended edge? We are watching closely for what it means for our business long term.”