FierceTelecom: Speaking of coverage, Equinix recently established a carrier neutral Ethernet exchange. What drove the development of that and how do you see the evolution of Ethernet Network to Network Interconnection (E-NNI)?
Appleby: It really builds on the Internet and content community to create a foundation. We won a bid 7-8 years ago in North America to build these peering exchanges and they evolved to support with IP transit traffic. We have ridden that Internet wave for quite a while and it continues to be good for us. What we then did is apply to verticals--including the financial and trading communities--and support network neutrality in the trading platforms.
And what the network guys were saying--and I was an evangelist around Ethernet for the past 4-5 years--is that this NNI process can take 9-12 months per carrier and there weren't any standards available to build this platform or to accelerate that interconnection piece. It's really been slow in the market. A couple of things have really come into play recently. One is the Metro Ethernet Forum (MEF) has been working on standards. I came from Reliance and we bought Yipes and so I understood the power of Ethernet, but it's traditionally been a localized strategy because of this challenge of interconnection. Some of the biggest partners we talked to said 'this is strategic to me but I can only interconnect with three partners worldwide this year.' We came to the community and said we think we have a solution. Now we have some technology trial partners and we have selected Alcatel-Lucent and an initial group of founding partners that are leaders in this space. We said we can solve this problem with a one-to-many solution that can allow you do to it once and get standards and templates that allow you to get that interconnect.
FierceTelecom: It appears that Equinix continues to grow, not only in the U.S., but also in Asia-Pacific and Europe. What's driving that growth?
Appleby: Because of the success and the supply/demand imbalance, you have seen our network builds in DC, LA, Singapore and Zurich. There's a lot of new submarine cable builds in Asia and additional build outs in new markets to get more capacity. We interconnect in those sites to enable this global interconnection space. Even though we were challenged last year and cut our capital build a little bit, others really cut their capital build. We made a commitment to not go dark. In 2009, the challenge was: would we still have access to capital? So we self-funded quite a bit of our development. We were able to raise a bit more money and between the cash and the money we raised we can avoid going dark in these critical markets around the world.
FierceTelecom: Part of your expansion includes greater emphasis on Asia-Pacific and Europe. Are there specific trends there that are driving Equinix to expand in those regions?
Appleby: Just the growth of the raw Internet. Second, is the growth of video. Folks are moving toward distributed architectures. Most of the Internet was really interconnected in the U.S. up till a few years ago, but now it's distributed around the world. A lot of the cable outages in South from the earthquake show you that the world was tethered into the U.S. for Internet content so people have moved toward a distributed model. This means that they need to interconnect at major hubs around the world. Also, the growth of video has been extraordinary, so we're riding that wave.
Links:
[1] http://www.fiercetelecom.com/story/fierce-telecom-leaders-jarrett-appleby-cmo-equinix/2009-12-15