Equinix – bigger and better through interconnections

Equinix has long been known in both Enterprise and Service Provider circles as a (probably the) leading name for colocation services. It has grown to have the biggest footprint worldwide, with an enviable reputation for operating high quality infrastructures supported by robust processes and reliable people.

Although one of the more expensive providers in this market, the Equinix proposition has proved to be a winning formula among less price-sensitive segments. Clients expanding into unfamiliar geographies clearly valued the confidence that whatever else might go wrong, their infrastructure was safe with Equinix.

At the same time, it seemed to industry-watchers that Equinix’s fundamental business could be under threat. While the base offering of every colocation operator is “don’t build and own a data centre, rent from us instead”, hyperscale cloud operators have seen huge success with “don’t build your own IT infrastructure, rent scalable services from us, and we’ll only charge for what you use”.  The risk to colocation providers is clear – if most IT gets delivered from cloud services, what’s to stop a slump in demand for colo space?

Equinix has been adapting to this challenge for many years, and its strategy is embodied in the title of Equinix’s impressive customer event “Innovation through Interconnection”, held last week. As Equinix’s MD EMEA Michael Winterson explained during a private briefing, some years ago the firm identified that cloud exchange points could be a key source of competitive advantage. Tapping into the firm’s origins working with Internet Exchanges (and looping in one of their original founders) Equinix settled on a strategy of becoming the best place from which to access cloud services. 

Today, Equinix makes it easy for its on-site customers to have reliable, secure, low-latency access to the world’s leading clouds. While the trend to move less critical workloads and non-sensitive data to the cloud will tend to reduce a colo customer’s footprint, the ease and breadth of cloud access will help keep Equinix “sticky” for its Enterprise clients. In any case Equinix has no concerns around running out of road – it estimates that today 70-75% of all IT is still run and hosted in-house. As this huge installed base of internal IT moves out towards to the edge, those elements which can be moved to a public cloud, will be moved. But for all the elements which for reasons of performance or policy, cannot live in public clouds, Equinix will on stand-by to provide the most reliable, secure and best connected location for housing private infrastructures. 

Finally, Equinix is particularly strategic about how it develops its connections, embracing challengers from the East such as Alibaba Cloud (Aliyun). Although long overlooked by the North American giants that have so far dominated public cloud services, Alibaba Cloud is growing at a staggering pace.  Last week Equinix announced that Alibaba is now available through Equinix’s cloud exchange in HK, Sydney, and Washington DC, and that the service will shortly be available in Equinix London and Frankfurt. By maintaining a broad interconnection community of all the major public cloud services, Equinix is showing a confident approach to maintaining its competitive advantage, which should help secure its leading position among the world’s top tier of colocation providers.