Storage & Data Center Solutions

Equinix CEO enjoys his long run at heart of the internet

Equinix CEO Steve Smith runs the company that is the 800-pound gorilla of datacentre co-location and connectivity. A West Point graduate who once served as aide de camp to the Commander in Chief of the US Army, he held senior posts at EDS and HP before joining Equinix in 2007. He has enjoyed that rarest of things in the technology sector: a long tenure in the top job. It’s over 10 years since he became boss and he has presided over a hot streak for a company that is the undoubted number-one in its sector, having outgunned, and in some cases acquired, the opposition.

After HP he was headhunted into Equinix but was no expert on the company or the sector in which it played. “I didn’t know much about it,” he says. “It was a $400m revenue company, the stock was about $40 and it had 30 or 40 datacentres.”

Jump to today and the picture is a little different – and bigger. Equinix runs 179 datacentres across five continents for almost 10,000 customers and has made 17 acquisitions to get there. It turned over $3.6bn in its last financial year and at time of writing this had a market cap of over $34bn, that 40 bucks stock having swollen to $440, nudging its 52-week high.

How has the sector changed during his stewardship, I ask.

“The pace of change has quickened,” he says. “Cloud has certainly accelerated it but most big companies are starting to take advantage [of co-location] – running datacentres is just not core competence to them anymore.”

Equinix effectively acts as a service and facilities provider to cloud companies and enterprises but it also increasingly acts as what Smith calls the “on and off ramps” to the internet and an “easy button to get access to all the networks and cloud”.

Smith says Equinix has been lucky to operate at the intersection of some big trends but perhaps the key to its rise has been a relentless pursuit of growth and capacity.

“Scale and reach does matter,” he insists. “The reason you can download a movie in 10 seconds from Netflix is because there’s a whole bunch of server infrastructure nearby for the latency.”

He wants to increase that scale further, going deeper into growth markets such as Africa, Asia and Latin America. Future IT developments such as self-driving cars and the Internet of Things should also need the help of Equinix in the same way as Netflix requiring that ultra-local access to the network edge and datacentres. Smith also sees opportunities to provide storage, networking and security extras to its current services. The world as he depicts it is full of opportunity and the only “scarce commodity will be human attention”, he predicts.

Unsurprisingly, Equinix’s growing shadow has already attracted the attention of regulators. When the company surprised many by stepping in to buy Telecity (just after that company had agreed to buy Interxion) the EU demanded the sale of eight European datacentres.

“They weighed in when we interloped,” Smith quips, but “in the grand scheme of things we’re a small company”.

Small? Maybe, when compared to an Amazon, Apple, Facebook or Microsoft but Equinix has become a quiet icon of the internet, the home page of our connected world’s infrastructure.

Smith gives short shrift to my suggestions that one of the internet giants could have the chutzpah to make aggressive moves in the sector, saying that the big clouds need Equinix to provide global connectivity. Similarly, he has no desire to tread on their feet: staying neutral and being the Switzerland of networks makes more sense.

The on-prem world is not going to go away anytime soon but the mixed picture and multiple clouds that we will see today will persist and as more cable is laid, Smith wants them to plug in to Equinix facilities. He says that his long run as a tech CEO makes him “an outlier” but he has no plans to quit yet. It has been a “fantastic run” but there’s plenty more to come, he says: the network isn’t done yet and it never will be.


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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