The Internet’s Most Connected Company

Equinix Chief Stephen Smith on the advantages of being a digital middle-man.

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SAN FRANCISCO — Equinix‘s business is straightforward. The company owns more places, where more networks meet, than any other. That’s what brings new customers to its data centers. Each new customer ultimately makes this business more valuable. That’s because in the Internet era it’s the number, and quality, of your connections that count, whether you’re a high-speed fiber optic network operator looking for a place to connect with your customers and competitors, a Web company such as Google or Facebook, or a wireless carrier looking for a place to anchor a wireless network to the wired world. Forbes’ Brian Caulfield spoke with Equinix Chief Executive Officer Stephen Smith about the importance of connections, and connectivity, in the Internet age.

Forbes: Ideas like the cloud and infrastructure as a service are all very abstract. But for you, they’re extremely concrete. You literally build the bricks and mortar around these transactions. Tell me about that.

Stephen Smith: The cloud as you mentioned is made up of lots of different fancy offerings. It’s software, it’s infrastructures, platforms all sold as a service. The cloud computing model is evolving around the world today. There are billions of dollars going into it. In our data centers around the world, we are experiencing many public cloud deployments and private cloud deployments coming from enterprises that are putting their infrastructure, servers, storage arrays, and networking gear, which is the guts of what makes up a cloud offering.

Whether it’s sold as software off those boxes or you’re selling the cycle time of the actual platform or the infrastructure, that’s all it is underneath. And clouds sit inside of data centers. Our play in the cloud business is to attract as many of these managed and dedicated hosting companies that are selling the cloud offerings to put their cloud infrastructure into our data centers. When a customer looks inside of one of these data centers, no matter what market it is in the world, they can look in and see how many networks are sitting inside of that data center.

They can say, “I need to put my company’s infrastructure in there, because then I can just buy a cross-connect or a port and connect directly to these and avoid huge network costs.”

For you, the cloud is not a bubble on a PowerPoint slide, it’s a data center with networks coming in, with servers on top of those networks, with business moving information from one network to another. We’re talking about things that your employees can literally touch and feel.

We’re a data center business, but all data centers are not the same. We have 87 of these data centers around the world, in 35 cities and 11 or 12 countries. These data centers have more network connectivity into them than any other data centers in the world.

The reason people get attracted to Equinix‘s ( EQIX news people ) data center business is they either don’t want to build data centers or they can’t go upstairs to the CEO and CFO to get capital to build a data center. Therefore, they have to go source it. They could go to the big outsourcing guys and say, “Just outsource my I.T. Take my people, my assets, and run it for me. IBM Global Services, HP, E.D.S.” Or they could go down and just host this stuff with a hosting company that’s in the middle of the stack. Or they could go to where we play, which is called data center co-location. They own their servers and they co-locate them in our data centers.

The reason they do that is they get access to all this network density. They can move applications very quickly. They can get them to the Internet very quickly. They can get really reliable throughput on these networks.

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