Equinix sees limitless growth opportunity in the mass of data created by digital media consumption and the incoming internet of things, UK managing director Russell Poole tells Brendan Coyne.
The biggest challenge for the world’s biggest data centre company is managing growth, according to Equinix UK managing director Russell Poole.
The proposed £2.35bn Telecity acquisition will add heft to an already heavyweight European operation yet Equinix has appetite for further deals. Meanwhile, the explosion of data created in the last ten years may end up a faint pop in comparison with the Krakatoan internet of things.
No end to data growth
“We are going to be talking a lot more about the internet of things over the coming months,” says Poole. “We see that as another burgeoning market, another explosion in demand. Almost every device that we own now has the ability – or will have the ability – to connect. That requires network connectivity, requires the collection and management of all the data flows and then the derivation of value from that data,” he adds.
“So at the moment, we see no end to the scope for growth on consumer-based activity, whether that is accessing content via a mobile network or whether it is a fridge contacting Ocado to order some milk.”
More data centres
That new data will need a home and a sizeable chunk will end up under Equinix’s roof. Weeks after opening a sixth unit at its Slough campus, Equinix is already mulling new capacity.
“We have a continuous programme of development,” says Poole. “The cycle for a data centre from an idea on a piece of paper to operational is about 2.5 years. We have a constant process of evaluating available inventory against demand velocity and making sure we are always ahead of that.”
At the Slough campus, units 4, 5 and 6 are yards away from each other. “In effect, they are the same data centre from a network perspective,” says Poole. “So it doesn’t matter which data centre a service is provided in – they can be accessed by a customer in any of the three. And that is something we would seek to develop.”
Think small, get big
The company is acutely aware of the need to remain agile despite its expanding girth. Poole says agility and innovation keeps threats at bay. With “plenty of us in the business” who have been around since Equinix’s inception, Poole believes the company can remain agile “by not forgetting what it was like when we were a start-up.”
But there is no escaping the growth conundrum.
“The challenge for Equinix is managing the pace of growth,” he says. “We are expanding very rapidly and are mindful of maintaining the company culture and how that has to evolve as we scale. We do not want to lose [our culture] as we get bigger. Especially as we contemplate the Telecity transaction, which will dramatically increase the scale of the European business.”
Fridge magnates
For the broader industry, Poole says the challenge is to stand out and avoid becoming just another cold room provider.
“The key for many players is differentiation. Without a really strong story on differentiation it just becomes who’s got the cheapest, shiniest, big cold room,” he says. “Equinix is definitely not in that business and that is why we are thriving despite the plethora of companies entering the market over the last few years.”
Poole cites Cloud Exchange as an example of giving customers what they want while staying ahead of market shifts and threats.
“There are always new competitors popping up. The market for data centres is no different to any other. There are periods of imbalance between supply and demand and the market generally corrects for that over a period of time,” says Poole.
“We see cloud computing as an opportunity. Naturally that changes in some cases the demand profiles – some customers will choose entirely cloud-based service rather than take services from a data centre provider as they may have done in the past.”
Above the clouds
But that is not something Equinix has to worry about, says Poole, because cloud providers are also Equinix customers.
“So the innovation piece comes from defining the IT market trends and how we can make it easy for our customers to take advantage of them.”
He cites Performance Hub as another example of customer-centricity.
“Customers have told us what their issues are and we have gone away and invested to meet that requirement. So agility comes from the culture within the company and by focusing on what our customers want.”
Crucially, says Poole, it comes from “never stopping asking those questions”.
Customers and Cloud Exchange
Equinix’s customer segments are broadly categorised as supply-side and buy-side. On the former are network operators and cloud providers; on the latter content and digital media, financial services and enterprise.
“Enterprise is, to an extent, everybody else,” says Poole, “but that is where we are seeing the highest level of new growth.”
Naturally there is a strong correlation between enterprise and cloud, he adds.
“Enterprise and cloud are really matching each other [for growth]. As enterprises migrate more stuff to cloud, and more cloud providers pop up, or need to expand, they need somewhere to get together, an interconnection point. And that is effectively what we provide.”
Cloud Exchange, claims Poole, takes that one step further.
“The consistent feedback we were getting from CIOs was: ‘We know we are going to migrate to cloud, but we are not quite sure exactly what yet, or when. So we want the flexibility to be able to do that as and when and with whomever’.”
Cloud Exchange is a solution to that uncertainty, says Poole. It’s effectively a switch fabric onto which the firm connects all major cloud providers so that enterprise customers can, via virtual private lines, connect to multiple clouds through a single port of access.
“That is a compelling proposition. It gives flexibility, it is a low cost way of connecting, it is also highly secure,” says Poole.
“A lot of the reservations around cloud are the access mechanism being the internet – which is inherently insecure and has performance issues – or by fixed line connections, which take a long time to be delivered and are expensive,” he adds.
“Also, if it happens to be the same place where you can put the stuff that you want to keep within the fold – and have a hybrid solution which is what most of our customers are doing now – then even better.”
Bringing enterprise into the hub
Equinix’s Performance Hub is part of its strategy to bring more mid-tier enterprise customers into the fold. The hub “allows customers to extend their own wide area network into our DCs and then access the network providers and cloud providers that are based in there,” explains Poole.
That means users can put some kit inside and Equinix DC, simplify their network set-up and get better response times because they can connect directly to any cloud provider.
Poole says it basically makes everything faster and less wasteful and from an enterprise perspective. Equinix also touts a network optimisation component as part of the hub package. That is, to strip out the fat within customer’s systems architecture.
“Very often there will be all manner of legacy stuff lurking in networks that are a) driving a lot of cost and b) not really resulting in great performance,” says Poole.
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