Equinix CEO Lobs Muted Enthusiasm at the Edge

Equinix CEO Charles Meyers shared some muted enthusiasm for edge computing during an interview at an investor conference this week. “I think it’s going to play out over a longer period of time than people currently anticipate,” he said. Equinix CEO Charles Meyers shared some muted enthusiasm for edge computing during an interview at an investor conference this week. “I think it’s going to play out over a longer period of time than people currently anticipate,” he said. The interconnection infrastructure provider, which recently expanded its fabric and network edge platforms with a broader group of partners and new capabilities, is experiencing early phases of growth on edge computing but “we’re still a ways away from that in terms of materially relative growth,” Meyers said at the Citi 2021 Global TMT West Conference. Equinix’s edge strategy, prodded by that view and its experience in the space thus far, calls for a largely partner-driven approach wherein other companies provide “far edge real estate” that will require and benefit from interconnection and access back into Equinix’s services, according to Meyers. “We’re going to continue to build our more macro edge strategy with the current digital edge being the primary place where people interconnect,” he said. “Then, as those far edge use cases begin to adapt, we’ll look to extend the reach of our fabric and our platform out into that far edge, either via our own facilities or through partners.” Tower companies and other potential partners have assets that could bolster Equinix’s positioning on edge computing, and Meyers said the company is considering how to best craft deals aimed at delivering that outcome, but it doesn’t appear to be an immediate focus.  Some of Equinix’s near-term hesitation on edge opportunities revolves around the disparate and still developing use cases. While there are use cases that will be more contained, where devices interact with a far edge location and don’t go back to a core location, “I think that’s going to be more exceptional, more unique,” Meyers said. “I think it’s much more common for it to be accretive, meaning that there are some things that get done locally, but some things that need to go back to and interact with the broader ecosystem,” he said. “I think that is going to be the case most of the time, and therefore I view it as complementary and additive to the overall position.” While Meyers isn’t looking to the edge for meaningful growth soon, he is confident that a confluence of trends, including a broadening use of interconnect, will remain strong. “We’re seeing diversity in terms of enterprise to cloud, enterprise to network, and even enterprise to enterprise,” he said.  “Within the cloud landscape it was really dominated by a small number of players, and still is to some degree, but we’re seeing a much larger diversity of cloud interconnects. In fact, our average customers are now connecting to three, four, five, sometimes even 10 different cloud destinations,” Meyers added. He also framed Equinix strategy in the hyperscale space as one pinned around serving targeted strategic partners versus an all-out push to claim greater market share. “We, today, enjoy about a 40% market share of cloud ramps around the world and I think being able to meet the hyperscale needs is an important part of us continuing to extend those relationships,” Meyers said. Finally, Meyers said he’s optimistic that the worst of the pandemic’s impact on Equinix is over. “We haven’t really seen any meaningful shifts in customer behavior, or any retrenchment back to some of the more acute phases of the pandemic that we saw in the March-April time frame of last year,” he said. Other trends that grew during the COVID-19 crisis, including a greater shift to remote work and how Equinix sells its services to customers, will be durable after the pandemic ends, Meyers said. Companies that are well positioned and making investments to embrace a digitally-driven architecture are outperforming businesses that haven’t, and those investments are benefiting and will continue to benefit Equinix’s business, according to Meyers. “Digital demand is accelerating. The pandemic has reinforced that. I think data is being created, moved, manipulated, and stored at levels that are unprecedented in human history and I think that is going to continue and even accelerate.”