451 Research: Equinix interconnects its global datacenters into one unified platform
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Equinix has launched the ECX Fabric, allowing on-demand metro and cross-metro private connections for enterprise and cloud services, enhancing global connectivity and scalability. The platform enables customers to provision virtual private interconnections quickly between various datacenters and offers a pay-as-you-go billing model. As Equinix expands its ECX locations globally, it faces competition from traditional telcos and other service aggregators while aiming to provide customers with greater control over their network connectivity and performance.
451 Research: Equinix interconnects its global datacenters into one unified platform
- 1. REPORT REPRINT Equinix interconnects its global datacenters into one unified platform PENNY JONES, ERIC HANSELMAN, KELLY MORGAN 2 JAN 2018 The company has launched the Equinix Cloud Exchange Fabric – on-demand metro and cross-metro private connec- tions to scale, secure and optimize traffic flows between enterprise ecosystems and cloud services. THIS REPORT, LICENSED TO EQUINIX, DEVELOPED AND AS PROVIDED BY 451 RESEARCH, LLC, WAS PUBLISHED AS PART OF OUR SYNDICATED MARKET INSIGHT SUBSCRIPTION SERVICE. IT SHALL BE OWNED IN ITS ENTIRETY BY 451 RESEARCH, LLC. THIS REPORT IS SOLELY INTEND- ED FOR USE BY THE RECIPIENT AND MAY NOT BE REPRODUCED OR RE-POSTED, IN WHOLE OR IN PART, BY THE RECIPIENT WITHOUT EXPRESS PERMISSION FROM 451 RESEARCH. ©2018 451 Research, LLC | W W W. 4 5 1 R E S E A R C H . C O M
- 2. Equinix has announced the next step in its platform evolution – it is allowing customers to provision vir- tual private interconnections on-demand to any partners, suppliers or service providers on its platform, even if they are in different datacenters in different metropolitan markets. Customers can now provision remote connections between metros more quickly. They can also more easily use a single provider for global network configuration and for cloud-neutral digital edge asset deployments (the modern use of colocation). Expanding on its Equinix Cloud Exchange (ECX) platform, which provides customers with a way to connect to the cloud and other services using virtual cross-connects, the company has renamed the platform ECX Fabric with these new capabilities. Customers can also provision access to their own deployments in Equinix at 17 of 24 ECX locations in North America and Europe. It plans ECX expansions into seven new metros by the end of Q1 2018. Over the course of 2018, it expects to connect all of its ECX locations globally. The company is billing the service using a pay-as-you-go model, with prices rising along with bandwidth requirements (a tipping point will exist where it will be cheaper for a customer to set up their own pri- vate-line connection directly with telcos). About 25 customers are beta testing the service today. THE 451 TAKE By adding metro-to-metro connections and a new API-driven software fabric for interconnections with each International Business Exchange (which includes cloud service-provider on-ramps), Equinix is enabling virtual cloud connections to be easily and quickly provisioned through its ECX user portal across metros. It is also ex- panding the options for hybrid cloud delivery and enabling customers to add connections between their own distributed points of presence. Previously, enterprises and service providers would have relied on a telco to offer these connections – now the company claims they can have greater control over latency and scalability, as well as faster time to market for services. The flipside is that while telcos are some of the earliest custom- ers of the ECX Fabric – leveraging it to extend network reach and speed – some could feel that the company is encroaching on their turf. CO NTEXT Equinix is a real estate investment trust with over 190 datacenters covering 48 metros around the world. It has 9,500-plus customers, many of which leverage more than one Equinix location. It delivers over 240,000 cross-connects and says this rate is growing organically, with customers regularly seeking to connect with new partners in the ecosystem of service providers and enterprises on its platform. The company is continually expanding in key metros and new locations, cur- rently with roughly 20 active build projects and a‘hot list’of 10 new markets earmarked for entry. In recent years, Equinix has focused heavily on connectivity, with a ‘reach everywhere, interconnect everyone and inte- grate everything’approach, where it standardizes space and power products and focuses on interconnection as its unique selling point. Interconnection at the company began in the early days of the internet with simple cross-connects and internet exchange points inside the datacenter. It then fostered interconnection use across its expanding set of locations, enabling vertical ecosystems such as financial services, content and digital media, and cloud exchanges. 451 RESEARCH REPRINT
- 3. 451 RESEARCH REPRINT Equinix’s approach has not happened overnight. It has been spending time considering network pain points for service-provider and enterprise customers delivering or consuming hybrid cloud. How do they scale globally with private connectivity, while at the same time managing additional requirements for services and growing amounts of data? In particular, how do they do this when setting up connectivity to services outside of the datacenter can be time-consuming and complex, while much-needed network skills are no longer in-house and are difficult to find? With ECX Fabric, the company is hoping to answer some of these questions by offering a facility-to-facility, metro- to-metro approach that can be controlled from the same portal as cloud service access. Furthermore, this ap- proach is underpinned by Equinix’s Interconnection Oriented Architecture, an implementation guide released by the company that promotes a new way of architecting services and infrastructure deployments by leveraging core and edge datacenter sites for rapid scaling, better performance and lower latency. ECX Fabric now offers custom- ers a way they can more easily implement this. A GLO BA L BACKBONE American multinational GE, which leveraged the concept of the Industrial Internet for its own efficiency and growth, provided Equinix with inspiration for its ECX Fabric. GE had created a global backbone connecting to its main datacenter in San Francisco with aggregation points for mobile networks, internet traffic, security and data- collection points. Equinix mimicked this, enabling customers to take central datacenter locations and expand to metro layer edges for intelligence and then mobile networks and internet systems for engagement with clients or to cater to new technologies such as the Internet of Things. Additional network capabilities then allow for these metro networks to span geographies, with network integration and management capabilities being placed in the hand of the customer. This means that a client in Amsterdam, for example, could gather data or services from Norway and Poland, and then bring them back to the main compute point in Amsterdam through direct, private network connections. Equinix invested heavily in SDN to enable instant virtual connections via its portal and revised its own API architec- ture to allow services to be turned up fast, with customers able to replicate environments in new locations within minutes. It also increased network connectivity across its estate and to the service providers that directly connect with Equinix, prior to launching its ECX Fabric offering. A financial trading firm in London that wants to replicate its service in Paris, for example, could write its own virtual circuit over the ECX Fabric to connect the client computer system in Paris to a trader based in London. With ECX Fabric, customers can build and manage their own network functions – for example, an SI could create its own SDN-enabled network. Equinix is also launching a range of products on the back of an API-first policy it adopted as it rolled out SDN, the first being SmartKey for clients seek- ing to store and encrypt services they require with different security parameters. EXPA NDI NG CONNECTIVITY Customers can access the ECX Fabric wherever Equinix Cloud Exchange is present – Amsterdam, Atlanta, Chicago, Dallas, Dublin, Frankfurt, London, Los Angeles, Manchester, New York Paris, Seattle, Silicon Valley, Stockholm, To- ronto, Washington DC and Zurich. In Q4 2017 and Q1 2018, ECX Fabric will be rolled out to seven new metros – Denver, Düsseldorf, Geneva, Helsinki, Miami, Milan and Munich. Equinix will extend connectivity to São Paulo within the Americas region, and between ECX Fabric metro locations in APAC (Hong Kong, Melbourne, Osaka, Singapore, Sydney and Tokyo) in 2018. Alongside its ECX announcement, Equinix plans to expand the reach of its internet exchange into nine new met- ros in Q4 2017 and Q1 2018 – Amsterdam, Denver, Dublin, Frankfurt, Houston, London, Manchester, Milan and Stockholm.The company’s private internet exchanges already carry over 7,500Gbps of traffic at peak load. Equinix has internet exchanges in 11 metros, including Atlanta, Chicago, Dallas, Los Angeles, Miami, New York, Sao Paulo, Seattle, Silicon Valley, Toronto, Washington DC, Geneva, Helsinki, Paris, Warsaw, Zurich, Hong Kong, Melbourne, Osaka, Singapore Sydney and Tokyo. It also partners with AMS-IX, LINX, DE-CIX, TorIX and JPNAP.
- 4. CO MPETITION This could be considered the next step toward Equinix moving further up the stack, or competing with some of its own telco and internet exchange partners. Many providers in the the retail colocation space such as NTT Communications, KDDI Telehouse, Digital Realty and Interxion in Europe are focusing heavily on interconnection capabilities.With this latest announcement, Equinix will increasingly compete with service aggregators like Mega- port, Epsilon and PacketFabric that may have lower performance linking Equinix facilities together but can take customers to locations that Equinix can’t (namely, non-Equinix facilities). SWOT ANALYSIS 451 RESEARCH REPRINT STRENGTHS Equinix already had the infrastructure, and it has carried out research on SDN for sev- eral years and is entering this market with a ready-made ecosystem. This gives it a con- siderable advantage in this connectivity-fo- cused arena. WEAKNESSES The company will need to be careful how it plays its cards as it offers enhanced connec- tivity services beyond its traditional internet exchange points and cross-connects. It will need to work out careful partnership models for existing customers, some of them valu- able members of its ecosystem environments that won’t want to see their provider moving up the stack to compete. OPPORTUNITIES Equinix can see a real opportunity with cus- tomers that no longer have network manage- ment functions in-house that require simple ways to connect to the cloud, while ensuring that they are protected and have on-ramps to multiple cloud options. THREATS Taking control over the network adds another layer of performance-based SLAs that Equi- nix will need to be careful to meet. The net- work is becoming a key area of concern for businesses as they push more to the cloud, for both resiliency and security.