Equinix, which has for some time been engaged in an impressive push to purchase strategic data center assets as it seeks to significantly expand a global footprint no competitor could as yet dream of matching, has unveiled some key hiatuses which it will consider adding to its wish list in the near future.
Speaking to Telecom Times on the sidelines of Mobile World Congress in Barcelona, Equinix Business Development VP Jim Poole said that while the firm would never pinpoint exactly where we it might next direct its expansion focus, “I can almost guarantee that, at some point over the course of the next 12 months, we will end up in some new market that we currently aren’t in.”
“So I wouldn’t say this – that the activity is over – but stay tuned, we’ll see where we end up next,” said Poole who went on to say that in the Australian context, the company’s acquisition of Metronode had also allowed it to expand beyond the major metros of Sydney and Melbourne.
Specifically, Poole noted that a core driver of this acquisition was a trend which had seen “the hyper-scalers become big investors in the cable projects.”
“They can say, ‘Okay, you can meet me in the West of the country in one of your data centers. I have two or three other telecoms providers who are partners of mine on the build. However, I want my six, eight, 10, whatever number of pairs of fibre that you own on the system piped directly into my cage’, he explained. “We call that the open cable model, which has become very, very, very popular.”
“For us, part of the Metronode [purchase] was that we had plenty of exposure to, obviously, the Eastern cable landings, but not to the Western cable landings. So that kind of fulfils that,” Poole said. “Because most of the big telecoms operators, and especially the hyper-scalers who are investing in the new builds,… any time they can get this model now, that’s the way they want to do it.”
“They want to bring it straight to the data center; to get instant access to the buyers, or to an environment that allows them to stage the caching infrastructure that accesses the cable,” he explained.
Poole highlighted several outstanding omissions in terms of Equinix’s global footprint. “There are some notable holes, I suppose you could say. And we are well aware of those. We’re not in South Africa, for example,” he said, adding that the reason Equinix did not have a presence in this region related solely to the size and scale of the market.
“You know people often ask: ‘Well, why didn’t you full bore and go into every single market that you could?’ And I say: Well, you know, realistically, it is a business and the reality is – the joke that we would tell is, that for every dollar that we put into, even our developed markets – for every dollar that we put into New York and for every dollar that we put into Ashburn, say for example – Northern Virginia, outside DC – we would get a guaranteed return of multiple dollars,” Poole said.
“When you look at that and go: Okay, speculatively you could go into a Tier 2, or Tier 3 market in a developing country with half the growth rate, you have to question: Well why would you put in the dollar?”
“We do have shareholders, and they do like returns on capital,” said Poole. “It’s not that it’s not important, but for us it’s more [because] every year… there’s a certain amount of discretionary capital that you might spend on footprint expansion. And so South Africa, South Korea, India.”
“We’re in Shanghai and Hong Kong, but we’re not in Beijing for example,” said Poole. “And that comes up quite a bit.”