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Summary

The co-location and interconnection market is witnessing rapid growth, driven by the shift from fat core and thin edge computing to fat edge and thin core computing. To understand this shift we must look back five years when only the financial trading markets were really latency-sensitive, while today everything is latency-sensitive.

Latency is the enemy in cloud computing

Equinix is addressing this market shift through its investment strategy, which five years ago recognized the importance of cloud computing. Its heritage in network interconnectivity is fundamental to how it viewed the cloud opportunity. Over the past 17 years it has invested $13bn in building out its capability and it now has 145 data centers on five continents, with 176,000 cross-connects. Ovum research (global service provider survey 2014/15 n=700) shows that relationships and trust were the biggest factor in end customers selecting a supplier. However, the reputation and scale of the supplier were a close second. Equinix has a 14% share of the co-location market, twice as much as its nearest competitor.

The shift to edge computing is a central tenet of the leading technological advances we are witnessing today. IoT and the whole concept of interconnected devices will not work without intelligent local computing. A smart city cannot wait for seconds just for data to be uploaded before changing a traffic light based on traffic congestion, and only milliseconds will suffice. This think-local act-global mindset requires the three rings of computing (a central core, regional, and local) to be adopted. The glue that holds these together, and is a core differentiator for Equinix, is the network built on interconnection.

The old traditional hub and spoke network architecture is the problem that is acting as a brake or exposing performance bottlenecks, frustrating organizations looking to expand rapidly. Equinix with its interconnection-oriented architecture supports a grid-like approach and reduces performance pinch points by distributing resources.

Appendix

Author

Roy Illsley, Principal Analyst, Infrastructure Solutions

roy.illsley@ovum.com

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