Equinix has announced that it has extended its global interconnections with two additional connects to AWS in Dallas (DA2) and the London International Business Exchange™ (IBX®) (LD5 in Slough). This brings the number of interconnects with AWS to ten globally. Equinix now has four connections in North America to AWS (Dallas, Seattle, Silicon Valley and Washington, D.C./Northern Virginia.) 4 in APAC (Osaka, Singapore, Sydney and Tokyo) and now two in Europe (Frankfurt and London).
So what difference will these make.
For UK customers of Equinix this is good news. The previous connection to AWS was using a tether in London to AWS Dublin. This new connection will not only reduce latency for customers using AWS services in the UK but also delivers a low latency redundancy for users currently utilizing the Frankfurt connection. There is a similar story in the US where the Dallas connection gives lower latency and therefore faster data throughput rates for customers that connect into the Dallas data centre.
While these additional low latency options will be welcomed by customers it is not the only strategy that Equinix could have pursued.
Is interconnection the right strategy
CenturyLink has been chasing both additional interconnections. While not as fast as Equinix it did add several Cyrus One data centres to its network. However it is aiming to deliver SDN as quickly as possible, announcing that it will have virtualized its whole data centre estate by the end of 2018. CenturyLink are not alone in this chase for SDN over interconnections with Megaport, an Australian company announcing that it is seeking to take its data centre connections from 34 to 79 as soon as possible.
While Equinix has been announcing these interconnections has it ignored SDN? The answer is no. EPN, Equinix Programmable Network, is the Equinix SDN solution, and it has probably had less attention than interconnections because they have already rolled it out and it is at the core of Cloud Exchange.
CenturyLink are playing catch up but Megaport is likely to become a threat in the near future. As a virtual cloud company they don’t own the data centres, merely connect them together offering services to multiple CSP’s that only companies such as Equinix have the deep pockets to provide themselves. Megaport has interconnections to AWS already, though it is not clear how many there are of these or where the interconnections are located.
However it can add additional locations quickly and by linking together smaller CSP’s is fast creating a network that could challenge the traditional operations of companies like Equinix and CenturyLink. It will be interesting to see who Megaport is actually connecting to though and whether they connect into a larger company soon, or perhaps, following their recently announced IPO, become the target of one.
Equinix is continuing a strategy that it believes IT leaders want to follow. That being the connection of their enterprise systems into a network of cloud providers to so that their physical and virtual infrastructure can be located in a wide choice of locations and possibly providers. This view was backed by a recent study, Enterprise of the Future, that found 84% of IT Leaders would be following this strategy by 2017.
Ryan Mallory, vice president, technology, Equinix commented: “At Equinix, we are seeing significant growth in enterprise customers looking to connect to AWS in a secure and high-performance manner. Our goal is to provide these customers with the ability to realize the full benefits of the cloud – without worrying about application latency or cost issues.
“AWS Direct Connect makes it easy for companies to establish a dedicated network connection from Equinix to AWS, which ultimately reduces network costs, increases throughput, and provides a more consistent network experience than Internet-based connections.”
Coupled with EPN the large interconnected cloud that Equinix is now able to offer is getting to be comprehensive. The only question will be whether the customers flock to use Equinix hosting as well as the interconnectivity that they are offering.
In connecting so many providers Equinix are able to offer the hyperscale computing facility, alongside their private hosting facility but there is a balance where Equinix need to also offer services that delivers them the profit margins their shareholders expect. With born in the cloud virtualized cloud companies like Megaport in the wings Equinix need to understand and leverage what they have created.
In summary, Equinix appears to be winning the interconnectivity race and is doing well in the SDN race but needs to be aware of the challengers. It’s recent acquisitions of Telecity is still to be completed and Bit-Isle will drain its war chest. Despite the recent note issue, it may not be capable of acquiring Megaport before someone else does or its size makes it expensive.