The power of connecting the data centre to the cloud: Equinix and CRN roundtable

The world is speeding toward a new form of value creation: building virtual trading blocs within secure and fast, hyperscale and interconnected data centres.

As e-commerce approaches 10 percent of global trade in physical goods and services, the ability to shift information in bulk and at speed between points of interconnect could become the new basis of all commerce.

CRN and Equinix held a roundtable with leading Victorian resellers to explore what interconnection means for the channel and how trusted partners can help their customers transform for the digital economy.

CRN
What’s the business case for data centres when public clouds promise to do everything effortlessly?

Jeremy Deutsch, Equinix
Being a data centre company, you might think cloud is a threat, but it’s complementary. Those building cloud footprints — hyperscalers, resellers or private cloud — must interconnect or plug into each other. With more hybrid cloud environments, you need an environment to interconnect securely and at high speeds. Equinix’s proposition for cloud service providers was to create an on‑ramp – we’re a data centre company, but the connections inside those facilities are what differentiate us.

CRN
How does French infrastructure provider OVH partner with Equinix and its own partners?

Emmanuel Goutallier, OVH
What we deliver to [a global] market is just infrastructure. We don’t do management, and we deliver a bare metal cloud server to the MSP in two minutes. We have a strong partnership with VMware, so we can provision a private cloud in 15 minutes. And there is no minimum commit: we promise full elasticity up and down and very short prov­isioning time. We bring the attributes of [public] cloud to private [cloud providers]. Australia is one of the early adopters of cloud — maybe number one — so we want to be part of the ecosystem and the interconnections between cloud providers.

CRN
How do other partners manage their cloud and networking?

Haydn Corbett, Broadband Solutions
We’re being dragged into the Asia-Pacific region and doing more work in New Zealand. Until now, the data centre was somewhere to park our equipment. We don’t do business with Equinix, but your point about being a connector is very interesting to us. We’re talking to public cloud providers, but [interconnection] is something we haven’t thought about before. Plus, the presence of OVH in Asia-Pacific is of real interest to us. We have an IP PABX product built in-house that we want to take global, and we’re looking at ways to do that. It’s a big drive for Sam [Bashiry, Broadband Solutions founder]. We’re looking at where to put it, who to put it with, how to protect it, and how quickly we can turn it on.

Doug Woodford, Redbear IT
Although we don’t get involved in the networking side of our clients’ architectures, we do make recommendations. So how does Equinix provision those interconnection points? Particularly if we want to swap easily, because many of my guys would rather write a script than talk to a human.

Jeremy Deutsch
At the base level, we have infrastructure services, which is a building. On the next level up, we have interconnections, like fibre between you and the other party – a cross-connect. Going up a level, we have an aggregated, global software-defined cloud interconnection fabric that is automated and API-driven; you can turn it up and tear it down. It’s built for core enterprises that are building foundational platforms for full production.

Rachel Markus, Combo
Where does the network design component sit, and what’s the value proposition when compared with Telstra’s provider network?

Jeremy Deutsch
Telstra said it would [join] the Equinix data centre we built in Port Melbourne a few years ago. With our locations in Sydney, Singapore, London, New York and so forth, Telstra said: “If you’re going to Melbourne, you will be the key on our network maps.” We now have 50 network providers in Melbourne with their full suite of services, and they’re all highly connected.

Heath Ragg, Fusion5
Connectivity is probably better with Equinix than where we are today, but we don’t suffer with what we have. With all their expertise, Equinix sees what’s happening on a larger scale. We’re all so busy in our businesses that it’s hard to get above water to see what others are doing well. Data centre experts see what’s happening globally and locally. They can look at our business, see where we need to advance and introduce us to people.

Toby Alcock, CNI
We’re a Microsoft Azure partner. We rely on it heavily, so we’re held to ransom by the incumbent provider to give us public cloud connectivity before we can do anything. That takes months, and being able to deliver options would help, but I see a can of worms in 50 providers. We would need a skill set in-house to manage, implement and deploy that. I haven’t seen an answer in the market – even legacy network providers aren’t up to speed with cloud connectivity. That’s a challenge: how could we connect faster without going to market for 50 connection points?

Michael Pascoe, Olikka
We’re having the same delays for connectivity as Toby. An opportunity for us is to help customers, as we dissect their infrastructure to distribute it. To recognise that there’s a model to have Equinix as a connection point – I haven’t thought about that before, and I don’t think I’ve heard anyone in my business talk about it either. I certainly haven’t ever given that advice to customers. We’ve stayed out of that [before]; it was the customer’s area.

Matthew Reid, Cube Networks
We consult on infrastructure, and we hear customers questioning why they need a data centre or infrastructure? Everyone’s mindset is in IaaS, SaaS, PaaS, and so forth. Customers move to public cloud and they whip out their credit card. But they have interconnect issues with long lead times – some are getting smart around hybrid and embracing SD-WAN. We have many big retailers who did that, which drives down the price of connectivity. So there’s a massive opportunity to consolidate disparate data centres in their branch office or head office.

Rachel Markus
I’m interested in Toby’s comment about who does the network design. Telstra’s advantage is that you can access design engineers, but you’re committed to its network. Our guys can do some design, but if it’s a little complicated in multiple locations, we’re out of our depth. We don’t have the design resources that would let us go, “Hey, this is what our client looks like,” and Telstra does that for us. I haven’t heard [Equinix] say how they can do that for us.

Jeremy Deutsch
We have an interconnection manager who talks to Telstra, Optus, Pipe, Vocus and other telcos to learn about their networks, solutions, architectures and how to plug in so we can advise you. We don’t offer full architecture services, but we give you context and grease the wheels on your network choice.

Heath Ragg
When I talk to the larger enterprises, they want to own that point of interconnection and have someone else to help. While I’m holding that conversation, I’m suddenly off to the side because the commercial [aspects] are no longer directly linked to our organisation. Our direct sphere of influence starts to reduce unless we get quite pushy and the client reengages or pushes us back into that relationship. How does Equinix manage that multi-tiered relationship?

Doug Oates, Equinix
In the last two years, we realised that the best way to get to commercial customers is through [partners]. So now we have a very strong partner program that keeps you as the engagement model with the customer. We don’t want to take over the customer, because you know them much better and we’re a tiny part of the solution. Unless they are the likes of OVH or a Google, then it makes no sense for us to deal directly with them.

Rob Ironmonger, Equinix
There is a mechanism to protect partners that refer deals to Equinix. I recognise some customers choose to procure that relationship directly, but we have a mechanism there to reward the partner. And we’re working with Amazon, NetApp, Microsoft, OVH and Pure Storage, which all of you are working with to put solutions together.

Jeremy Deutsch
We recently ran an event on payment ecosystems. We’re also developing partner markets in insurance, legal, healthcare and the Victorian government. It’s not just you bringing opportunities to us – we’re growing entire industries and educating people in a neutral way. Our architects consult to end customers at no charge, and they advise which systems integrators are best to deliver a solution. And that’s where we give you opportunity.

Rachel Markus
Does that mean you don’t sell direct? You only sell through partners?

Jeremy Deutsch
It’s a balance. The likes of OVH will have a direct relationship with us, but will every law firm sign with Equinix? No. And we have the business maturity to know that we need you guys as long-term partners. For example, a Sydney systems integrator has a very strong proposition for accounting firms. They built bespoke accounting software and we support them in events they run; they closed three or four times more accounting firms as a result.

Mark Sakajiou, Perfekt
Where I see the gap is a lot of guys similar to you not realising the value that partners bring — we all have different skill sets.
I’m sure you’re doing 50 to 70 percent of business direct today, and you’re trying to stretch this with partners to grow this market, which is smart. The density, efficiency and technology that partners bring — and are able to productise — helps you to win more business.

Jeremy Deutsch
We’d like to understand your business better. We also invested in a team to support you, and we hired in advance – we don’t have enough partners for them to work with. On the direct front, we’re more heavily slanted towards channel than you might suspect.
Our sales people – whether someone involved directly or supporting you – share exactly the same out of the pot, regardless of how it’s signed. My direct guys won’t sign up against you; we pay twice for internal costs.

Mark Eckert, Enspire
I have two businesses – one’s in cloud services and the other is in data centres. I’m keen to understand the future for someone like myself who runs a product data centre that’s competing with a behemoth organisation like Equinix. I’m lucky enough to have a niche business in the CBD, so I don’t compete directly, but where’s the price heading for the co-location space?

Jeremy Deutsch
The price swings depending on market dynamics. But when you compare your proposition in the Melbourne CBD versus a generic white space building in the middle of nowhere – with no network connectivity and no interconnection – you have a very different proposition.

CRN
Mark, are you approaching a decision point such as a capital event that might shift your direction?

Mark Eckert
We have a very long-term lease and capital investment. Many clients want infrastructure in the CBD. My other business, hybrid cloud and private cloud, capitalises on our infrastructure service (and platform service with the hybrid cloud) that takes a client through our data centres. We have racks in Equinix in Sydney and Melbourne, but it’s how we further that role. Of course, we’d prefer it if customers kept everything with us.

Doug Oates
Prices have fallen over the past 10 years, but they’re at the bottom now. If you think about the cost of the data centre, you have four elements: capex to build it, or your rent, staff costs and power – and they’re all going up. Why did the price fall? Margins were squeezed, forcing us to be more efficient. Australia is becoming an expensive place for power, and as we add more green power, the cost goes up. Real estate is not getting cheaper, so prices have to rise.

Fernando Schiavone, Cube Networks
We’re in the business of providing customers with guidance, and too often we’re asked what choices are out there. The key takeaway for me is to be better informed, and I’d like to understand more about how you partner and engage. What that actually looks like, and how we maximise that opportunity.

Jeremy Deutsch
We invested in making you guys successful, and we have the right people to support your businesses. It will be a different discussion with each partner as to how we can best assist. The key point is that we’re very open to it.