Equinix has been leveraging its position at the top of the data center service provider market to expand into new areas, such as data center infrastructure for next-gen mobile applications, subsea-cable landing stations, and hyperscale facilities.
On the latest episode of The Data Center Podcast, we interview Jim Poole, VP of business development at Equinix, about these initiatives, as well as its strategy around expanding in emerging markets, reaching data center sustainability, and more.
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TRANSCRIPT
Jim Poole, VP of Business Development, Equinix, On The Data Center Podcast
Yevgeniy Sverdlik, DCK:
Hi, everybody. Welcome to the Data Center Podcast. This is Yevgeniy, editor in chief of Data Center Knowledge we have with us today, Jim Poole, he's VP of business development at Equinix. Jim, thank you so much for taking the time today.
Jim Poole, Equinix:
Thanks for having me.
Yevgeniy Sverdlik, DCK:
You have this little tagline on LinkedIn, responsible for the investigation and seeding of new digital ecosystems. What does that mean?
Jim Poole, Equinix:
Yes.
Yevgeniy Sverdlik, DCK:
What these new digital ecosystems and how do you see them?
Jim Poole, Equinix:
Yeah, no, that's a good question. So, I don't think it's lost on anybody that the secret sauce of Equinix is the ecosystem idea, right? We've essentially got a whole bunch of people who buy and sell to each other in the same building, right? That's what makes Equinix different than say a wholesale data center provider who gives you a lease and it gives you the keys and you walk away kind of thing. So our whole things is buy sell dynamics. So historically there is an inherent value proposition around something like peering, right? Peering was one network needs to do business with another network and they needed a commonplace to do it. So they came to our sites and the content guy showed up, right. Eventually that extended out of networking and content and went into financial, right?
Jim Poole, Equinix:
Because it became a low latency game. So if you go to Secaucus with us, or if you go to Tokyo or London we've got a whole bunch of algorithmic traders, all sitting right on top of each other. The most efficient way for one digital entity to talk to another digital entity, so say your IT infrastructure to talk to the cloud or one network to talk to another network is to do that through a cross-connect of some sort. That could be physical, could be just fiber that connects your cage to the other guy's cage. That's like the low latency trading environment. There's just a piece of cable between the two sites. Peering is usually more everybody's on the same router, and they're all talking to each other over the same router, because you're sharing routes, right? That's how the internet functions the network of networks because everybody shares everybody else's routes. And then, recently, it's more around automated private interconnection between say a network or an enterprise who sits in our facility in a cloud provider.
Jim Poole, Equinix:
So, now nobody wants to wait for some guy to go plug a cable in from one side to the other side, they want to do it automagically. SDN. Right? Everything's needs to be fast. So when we say digital ecosystems and I kind of gave you those examples, the last one being cloud, everybody wants to connect to cloud. Now those are really big headline, like everybody's conceptually, I think, gets that is, "Okay, yeah, I can see why AI needs to talk to B", but if you were to say, okay, well, how does the satellite business work in the context of that? Or how does the mobile network work in that environment? Or does subsea cables work in that environment? That's what I do. My job is to basically go look at this from a, how do I keep adding value to the ecosystem that is Equinix by making it easier for people who may not necessarily normally interact with somebody like us to help them see that, hey, there's a real value in being a customer of Equinix. And so that's what I work on basically.
Yevgeniy Sverdlik, DCK:
So maybe let's drill down into those few examples. So mobile. Have you been able to seed a mobile [crosstalk 00:03:36]
Jim Poole, Equinix:
Yeah. So, I would say that I would call that the in-process project. So, and the way to think about that is that mobile networks up until 5G are consumer constructs, right? 99.9% of the usage is for a cell phone. So it's just voice and people doing their thing. 5G as a network is intended as a business venture, right? It's to attract business usage onto the network because you could do a bunch of things that you couldn't do, like quality of service and very high throughput and very low latency, right? Stuff that the current mobile network, the 4G network doesn't support. However, Telecom Infrastructure in the existing mobile networks all sits inside of their buildings. And they back haul the traffic to places like us because latency wasn't ever a design consideration. The fact that it's 40 to 50 milliseconds doesn't bother any consumer on a cell phone.
Jim Poole, Equinix:
Netflix works just fine. Right? Everybody's happy. However, if I wanted to do something that say had much lower latency, or I didn't want to transport traffic huge, huge distances, hundreds of miles, then I would need to start breaking traffic out more locally. And I would need to do it at a place where the applications that want to have access to that traffic live well that's a place like Equinix. And that's not, like I said, as much as everybody would think, oh, every network already knows how to get into every data center, that's not actually how it works.A lot of networks, wireline networks show up in places like Equinix and they connect. However, the mobile networks never did that. And so what we do now is we're looking at various different paths that says, "Okay, how do you make it possible to deliver a 5G service to an application that sits inside of an Equinix data center?"
Jim Poole, Equinix:
So that's one big area that I work on as an example. The second I think that I mentioned to you was subsea cables, right? And I've read a couple of your articles, you did nice job. And in the subsea cable business, the thing that's changed in the last say decade is that it used to be 99% of all cables were run by consortium's or big individual telcos. They would go build a cable under the ocean for hundreds of millions of dollars, and then they'd go wholesale it out to a whole bunch of different people. Now just fast forward to 2021, 60% plus of the cables are invested by the hyperscale companies. And they have a very different view of what they want to do with that capacity than say a telco who's trying to monetize it by selling it there. They're doing it for traffic engineering purposes, right.
Jim Poole, Equinix:
They're trying to do it to cater to the fact that their business needs a big giant network. So what they like to do is invest, say with a telco they co-invest, and then they want to bring all that capacity into a place where it's easy to break it out to all the various different people who own it together. And then they don't have to deal with each other after that makes it a lot easier. So the aquaponics environment, which is a multitenant environment lends itself much better to that dynamic. And the fact that most of the wired line terrestrial networks already sit inside of Equinix facilities.
Jim Poole, Equinix:
So if I'm just trying to connect, say a brand new cable that comes in from Europe and connects in Virginia Beach, what they'll do is they'll put the power feed equipment in Virginia Beach, but they put the laser that powers that in Ashburn. And because Ashburn is where they meet all of their partners. And so we do that to the tune of, I think, we've done 40 different cable projects in the last five years. We did 10, just this last year as an example, under various different types of scenarios, but at the highest [crosstalk 00:07:25]
Yevgeniy Sverdlik, DCK:
...by cable projects, you mean projects related to a cable landing?
Jim Poole, Equinix:
To a cable landing in a particular Metro because...
Yevgeniy Sverdlik, DCK:
Enabling that connection from the opposite shore to the terrestrial networks on the shore that you're on.
Jim Poole, Equinix:
And the fancy thing we just did to make it even more fun was we had a customer who was landing in a place that didn't have existing cables landing there. So there was no existing asset to sweat. And so this was Bordeaux, France. So we deployed a brand new data center of Bordeaux France, except this is not a quote unquote, stick-built like we go and pour a slab and build walls and do all the normal things you do to build a big giant data center. This was actually a modular data center design. So it's built in a factory. That's one of the use cases we look at in our business because our businesses is really driven by interconnection.
Jim Poole, Equinix:
So the thing we're trying to do is say, well, cables, subsea cables draw a lot of interconnection, right? People want access to the cable to put their traffic across whatever body of water that they're trying to get across, plan at 70% water. Right? So, when you don't necessarily have a place where you have an existing data center and you have a short time you want to deliver, then modular facilities make a lot of sense because you can do it a lot faster. In this particular case, that was the desire. The company that we were dealing with wanted to be there quick. And so we were able to do that.
Yevgeniy Sverdlik, DCK:
And this was the first time Equinix deployed in this kind of prefabricated modular fashion. And others have done it over the years. This is a first for Equinix. In a way, this is kind of Equinix's response to the network operators wanting a more distributed edge to have these interconnection points in more locations than kind of the traditional metros, right?
Jim Poole, Equinix:
Yeah. Well, it's another interesting example of how take the subsidy example, how it's changed in the sense that it used to be because the application was predominantly voice. It was very much driven by big population centered to big population center. So if you looked at all the trans Atlantic cables, they went from London to New York. Why? Because there's lots of people in both places and they wanted to talk to each other right? Now, well, what's the biggest internet exchange point on the east coast? It's not New York, it's Ashburn, it's Virginia, right? And there are other interconnect points along the coast.
Jim Poole, Equinix:
And so what's happening now is these new cables don't go from just New York to London. They go from Virginia to Bordeaux or from multiple places, Boca Raton, down to Fortaleza Brazil, right. Things that hadn't been done before. So a lot of these interconnections are now more direct, straight shots because the technology allows for it now. There's been improvements in how the cables get built. And so that means there's an interest in diversity. Not everybody wants to all be necessarily in one place. There's some advantage to doing that. But at some point you want to get to other big cities, right. France is a big place.
Yevgeniy Sverdlik, DCK:
So the connection to Bordeaux is interesting because of Bordeaux, not because of some other element or some other city nearby, or... Tell me why Bordeaux? Why is this cable landing in Bordeaux?
Jim Poole, Equinix:
Well, there's access to... It's an alternative route, right? It's not any one of the existing sort of well-used routes. So it's a net new landing. There's also an interest in our part of we have customers who very much pursue a land and expand behavior with us. They are our customers. And then when they go to new markets, they go to markets that we exist in, because it's where the path of least resistance if they want to keep expanding. So, for a long time, France just happens to be a country in which we only operated in Paris, even though we would constantly be asked about other large cities in France. And so the nice coincidence of, hey, a hyperscaler investing in a subsea cable who wants a net new landing place and Equinix who has got customer demand to be in a brand new Metro in a place like France. So nice coincidence. We can go ahead and solve that problem by deploying the modular facilities, and that's basically what happened in that case.
Yevgeniy Sverdlik, DCK:
And modular, for you guys, is a way to reduce risk exposure or maybe right sized capacity for that market, because maybe Bordeaux is in a huge market, right? But in case it turns out to be huge, or bigger than this particular deployment, you can add [crosstalk 00:12:09]
Jim Poole, Equinix:
...more flexibility in terms of the normal data center operator behavior, as you build a shell, that's capable of say supporting 10, 20 megawatts of capacity. Then you spend years filling it up in stages. But you still have to build that big shell, right? In this particular case, like you said, Bordeaux is a smaller market the use cases for that cable or transport in some amount of caching infrastructure, but it's not necessarily going to be like Paris, right. It's not going to [crosstalk 00:12:40]
Yevgeniy Sverdlik, DCK:
Unless all the wineries have a massive digital transformation.
Jim Poole, Equinix:
There you go. That could happen. Then we'd have to go to the south of France too, I guess I'll have to take that down as a [crosstalk 00:12:51]
Yevgeniy Sverdlik, DCK:
What a terrible perspective. I wanted to ask you about the X scale, which is kind of the hyperscale initiative. So Equinix has built an extremely successful business on this laser-focused strategy of retail co-location and interconnection. A few years ago Equinix got into this hyperscale business leasing by megawatts, plural at low costs, relatively low, to what you guys are used to leasing space for. And then and you've had some success there most recently, pre-leasing huge buildings in their entirety to hyperscalers in Dublin and London. Can you just explain why Equinix is in this cutthroat low margin, high upfront investment business of building data centers for hyperscale platforms when it's been so thriving in the interconnection retail colomarket?
Jim Poole, Equinix:
Sure. Yeah. Yeah, no, that's a good question. So, fundamentally the focus of the company has not changed, right. We still make the majority of our revenue and spend the majority of our time on the retail co-location business. We sell by the rack, right? Not by multi megawatts. However, if you think about just the growth of cloud market, any individual cloud company, although this is starting to change outside of the US was not necessarily anywhere near as big as what they would build in the US. And so they've been customers of ours for a very long time, not just like in the US they're their customers for gateway infrastructure and caching infrastructure, but their AZs sit in their own facilities next to hydroelectric dams where power super cheap, right? That's their normal. And wholesalers built that for them, and we haven't.
Jim Poole, Equinix:
And so what was happening was we had some regular server capacity in a lot of our overseas, and they would come to us and say, "Hey, I'm ready to go big. I want more. And I love the Equinix footprint", right? One throat to choke in all of these various different countries. I don't want to have to go to local company ABC because and although it's starting to change, we're still the biggest multi-country international player. And so the question was, for us, how could we satisfy the customer, but not necessarily completely change focus of the company. And so the way we did that is basically through this JV structure. So the reason we call it X scale is to call out the fact that it is different than the rest of the business. And so when we do this, what's happening is we own 20% of the JV and we have an 80% investment partner, in the case of the, the one that we've got set up right now is GIC, which is Singaporean sovereign wealth fund, basically.
Jim Poole, Equinix:
And so we get a fee for managing the facility. We have operational control of the facility. So we get paid fees for that, for managing that, but it sits off balance sheet because it's a JV and only our percentage of the profits from whatever the JV generates comes onto balance sheet. So it doesn't dilute, right? It doesn't drag down the margin profile of the core business, because it's essentially, it's a financial way of solving, and for us just strategically, it means that in a lot of these overseas markets where we want to maybe extend, or maybe even go into a new market at some point. We have a way of doing that in conjunction with say a big hyperscale customer who will go there with us, right? And that makes it attractive. So it's primarily a financial thing, but we can do it and we can do it in a way that it like, say it doesn't fundamentally change. It's actually run as a separate business unit.
Yevgeniy Sverdlik, DCK:
Another piece of recent news is Equinix's partnership with Dell around Apex, which is Dell's new on-demand subscription-based hardware as a service offering. This particular deal is focused on storage. Dell is basically offering storage as a service in an Equinix facility of their choice to a customer, whichever Equinix facility a customer chooses, they can use Dell storage. How does this work from your side? Did Dell lease or reserve a bunch of capacity in a bunch of Equinix data centers? Are they deploying storage hardware before customers subscribed to the service?
Jim Poole, Equinix:
I mean, basically it's like many people who do business out of Equinix, they buy space from us. They've got a roadmap for places they want to go. And then they use our fabric interconnection services to then reach the counter parties, because what they're trying to cater to from a use case perspective, and this was in their press releases. And we see this a lot, right. Is this idea of private storage, public compute, right? People don't want the data to sit in the public cloud. They want to maintain ownership of that. But buying independent storage that is not part of a hyperscale cloud offering has not been something easy to do at scale.
Jim Poole, Equinix:
So essentially the sort of enhanced level of cooperation between us is the fact that they're customer who's on fabric, who is actively selling this for this particular use case. We have lots of customers who will set up inside of Equinix to do business and not necessarily come on fabric and not necessarily even talk to us about going to market together and that kind of thing. So there's more collaboration because we both see a tremendous amount of value in this for the enterprise customer, but the relationship is a relatively standard relationship.
Yevgeniy Sverdlik, DCK:
So this is basically Dell acting as a cloud service provider and using Equinix data centers.
Jim Poole, Equinix:
Correct. Yep.
Yevgeniy Sverdlik, DCK:
Yeah. These Apex services overall, the way they're marketing them is you can deploy any Dell infrastructure in any location. It could be your own data center. It could be a colo of your choice in this case, they're actually proactively taking down space and building out this infrastructure, which they're then offering as a basic, like a cloud service.
Jim Poole, Equinix:
Yeah. It's recognition of the fact that like say on that continuum of private data center, co-location facility, public cloud, there's a great movement toward co-location public cloud. All the corporate data centers are closing down. So, yes, obviously they'll continue to do what they've always done, which is ship stuff, wherever you'd like it to go. However, it's not lost on anybody that since we have the biggest base of enterprise customers, that we're a really good place to do that business because we also have all the networks and all the cloud gateways sitting in our facility. So if you're building a hybrid cloud scenario, which is what most of our enterprise customers do, then Equinix is kind of the place to do it at. And so Dell certainly recognizes that that's the value of being in an Equinix facility.
Yevgeniy Sverdlik, DCK:
Is there any kind of flexibility in this partnership with Dell in terms of capacity? I imagine they don't have great amount of visibility into what demand is going to be like for the service, because it's brand new or where it's going to be. Is there any kind of freedom they have to, I don't know, scale up and down in different markets as they kind of get rolling [crosstalk 00:20:19].
Jim Poole, Equinix:
...that part, I'm not, I couldn't say I haven't been the guy who's been dealing with the details of it. So I don't know how they're thinking about how they're doing capacity planning against all the various markets. I know that they have a rollout schedule on multiple markets on our side, but I don't know the details of how they're thinking about it. It is a new service, I assume, that we'll all learn that along the way.
Yevgeniy Sverdlik, DCK:
Okay. Fair enough. And so they're not the only big hardware that's doing this, and HPE has their GreenLake service trying to also sell everything as a service. Everything is a subscription. Does Equinix have similar deals with any of these other vendors? Or do you expect this trend to drive a lot of revenue for Equinix?
Jim Poole, Equinix:
Oh, there's a ton. I mean, well, I guess the way I would say if I had to characterize how the market has changed, let's think of it that way, is historically the folks that came into our facilities that were doing sort of managed compute infrastructure were sort of what you would think of as a traditional MSP, managed service provider. Right? So, a systems integrator, somebody like that would come in and do deployments for customers and they'd buy space for that customer to do that deployment. And then they'd manage it on their behalf. That's been a part of our business since the day we opened the doors. That's very traditional. What has changed a lot now is that a lot of the traditional appliance, and software licensing companies are looking for different business models, right. They're trying to figure out how they do MRR, right. They want OPEX solutions for their customers because that's what cloud did, right. Cloud gave everybody an OPEX answer. So yes, we are increasingly seeing companies come to us and say, "I need to figure out how to deliver what I do as a service." So that's always an interesting dynamic.
Jim Poole, Equinix:
And that is new. That is, I can think of companies I might've talked to 10 years ago said, "Oh, well, why don't you proactively put a bunch of stuff in our facilities?" And they would've said no, by default. Now a lot of companies are, are thinking about it. And we have other products that kind of take advantage of that dynamic. So for example, we have a service called Network Edge, which is an NFPI platform. And essentially that allows an enterprise customer to bring their own license. They can deploy a VNF from a curated set of it's all the common guys like Cisco and Vilo and CloudGenix and Palo Alto and so on and so forth. But nobody wants to own the box anymore. They just want to deploy the VNF on infrastructure. That's sitting in the place that they need it. And so we've accommodated that kind of emotion. So, yes, everybody, there is a huge amount of interest in as a service [crosstalk 00:23:21]
Yevgeniy Sverdlik, DCK:
Right. So Cisco is also moving in this direction. Right. And then Juniper. And so I guess they're also deploying hardware in all these colo's, and then they want to become software as a service companies.
Jim Poole, Equinix:
Yeah. I mean, every, I'm trying to think of good examples, like if you see Zoom, right? Or if you see all the UC companies, right? Same thing. Used to be companies bought MCUs right. The old mixers, nobody does that anymore. Everybody buys these types of services and these types of services that have a huge dependency on networking tend to land in our facilities because we have so many networks in an individual facility.
Yevgeniy Sverdlik, DCK:
Okay. So you're saying this Dell deal is basically part of a trend that's been going on for awhile across the industry?
Jim Poole, Equinix:
Yeah, yeah. Yes, yes. I mean certainly the bigger guys are now I think more interested in it as evidenced by what Dell's doing, but it's been happening for a while. And I imagine that it will continue to accelerate, like we'll have I give you another good example of a public, another public customer, would be Nokia, right? So, Nokia, everybody knows Nokia as a company that builds routers, right? Optical equipment, radio equipment...
Yevgeniy Sverdlik, DCK:
Cell phones.
Jim Poole, Equinix:
Cell phones. I mean, they've built lots of, lots of different things, but they built the componentry to go do these things. And so a couple of years ago, what they did with us was they announced a service called Wing and Wing is essentially an IOT grid as a service. So the idea is that they'll do all the data collection off of all of the devices across their own network that is highly distributed around the world so that they can take care of say, IOT business for a geographically bound operator who has devices that go everywhere. Right? You always hear these cases in telecom of somebody launching an IOT service in Sweden and then turn it on, and they start getting telemetry from 75 countries. And so the question is, well, how do I collect all that data? That's a real pain in the ass.
Jim Poole, Equinix:
And so normally the way the technology vendors dealt with that was they would go sell the operators a bunch of boxes and a bunch of software and say, "Hey, I'll integrate all this for you by operator and build, build each operator, its own snowflake", right? Everybody gets their own thing. Now they've taken a bunch of those piece, part components that they normally would have sold on an independent basis. And they pulled it together as a global, as a service offer. It is an IOT management offer that exists in a whole bunch of Equinix facilities all around the world. And they sell that basically to operators who want that sort of global comprehensive offering and don't want to go build it. That would be another example.
Yevgeniy Sverdlik, DCK:
And I want to go back to this modular deployment in Bordeaux, just briefly. So this was the first one. How big of a business do you think this type of deployments will become for Equinix?
Jim Poole, Equinix:
It's really we're taking it as we see it. There is another project that we're working on in Europe that is likely to, and in fact, I think, actually, yeah, we did announce it, it's in Genoa. It's a similar situation. And so these do come up like say we're tracking, I guess the way to think about it is we're probably tracking an incremental 60 subsea cable projects over the next two to three years. So we are in the very, very sort of top of a building boom, that's been going on for the last few years and it's going to continue to go on for the next few years. So in part we developed the solution to be able to react to those, but subsea cable projects are interesting. They take years to develop. An individual project will take two, three years. So at the point at which the project is conceived, they don't even necessarily know where it's going to land. They figure that out as they go along, because there's a whole lot of regulatory and environmental and other things that they have to [crosstalk 00:27:38]
Yevgeniy Sverdlik, DCK:
...they know the general [crosstalk 00:27:40] ...region, they just don't have a specific location.
Jim Poole, Equinix:
Yeah. And so so we are reacting to a situation that says, "Hey, I can be flexible within my business model." And I want a business model, like I said, that it's a nice coincidence of sort of our normal multi-tenant retail demand and this subsea cable. We're not in the business of just building subsea landing stations for the sake of building Atlantic station. That's not very exciting. However, we are interested in markets, we do acquisitions, we grow, we do it organically. So it's just another tool, basically.
Yevgeniy Sverdlik, DCK:
In case of lending stations, especially in new markets, if you are kind of the first facility where that lending station or where that new cable connects to you kind of become the gateway to that market. And so then anybody else that comes in is almost going to have to come and take space [crosstalk 00:28:34]
Jim Poole, Equinix:
This certainly would be an argument for path of least resistance. And that would be something we would consider as part of the attractiveness of a project or not. So, yeah.
Yevgeniy Sverdlik, DCK:
Kind of what interaction did in Marseille?
Jim Poole, Equinix:
Right. Yeah, no, I mean, that was the classic example was probably one of the first points that developed around that sort of, hey, the guy who runs the landing station is an independent operator he's not one of the participants in the system, right? So it used to be... Like, I used to work at cable and wireless years ago. So we deployed subsea cables as a big part of our business. And we owned the landing station usually with another telco. And so it was a game because I could basically charge whatever I could get to take you from the landing station to wherever the closest pop was. And that's what the hyperscalers, and the new market demand doesn't want to deal with. Nobody wants to be beholden to one or two people who can charge you whatever they want to get you from the landing station back to the city pop. If essentially, if the interconnect point is the landing station, then that solves that problem. I can take capacity and do what I'm going to going to do, so.
Yevgeniy Sverdlik, DCK:
Okay. So, this modular solution was developed specifically for this landing station use case?
Jim Poole, Equinix:
Well, it was designed to be able to satisfy that kind of use case, right? So that use case where you needed less scaled down capacity, right? Not scale up. We're really good at building multi megawatt facilities. We know how to do that [crosstalk 00:30:10]
Yevgeniy Sverdlik, DCK:
It's scaled down because these cables tend to land in [crosstalk 00:30:13]
Jim Poole, Equinix:
...they tend to be smaller, [crosstalk 00:30:15] but we could go into smaller scenarios as they develop if more developed. But right now what we see is cable landing station. So that's what we're working on.
Yevgeniy Sverdlik, DCK:
Another new thing for Equinix are green bonds. The company priced one point $35 billion in green bonds last year. Another 1.1 billion euros earlier this year. And from what I understand, this is basically a way to borrow capital, which you commit to using to fund sustainability projects, renewable energy, energy efficiency improvements in data centers. There is now a lot more appetite from investors in this sort of offering, give us an overview of how Equinix is spending this money. What sorts of projects is it going towards specifically? And then also whether anything has materialized already from that first green bond offering last year.
Jim Poole, Equinix:
Yeah. I mean, we've got various different projects that we're working on at any given time. So how do we become more efficient in our use of water? How do we become more efficient in our procurement of building materials? How do we procure building materials that have a lower carbon footprint than traditional building materials? Where do we source our power from? How do we do power delivery, right? You don't always have to necessarily buy it from a power grid. So all of those types of projects require some level of capital. And so what we've committed to basically do, and we recently did this, we've had an objective for a long time internally to be carbon neutral by 2030. And so recently we joined one of the European groups that basically have the same objective [crosstalk 00:32:09]
Yevgeniy Sverdlik, DCK:
...The EU green [crosstalk 00:32:10] pact?
Jim Poole, Equinix:
Yes, yes, exactly. And so essentially the green bonds are a way to invest in what we have to do to all of our physical infrastructure to go ahead and get to that goal. And good news for us is this has been a project, although it's obviously something people are paying more attention to now, this has been something we've been working on for a long time. So we're already at 91% green and so from our perspective this is what our customers want, right?
Yevgeniy Sverdlik, DCK:
91% green meaning there's an equivalent number of carbon [crosstalk 00:32:49].
Jim Poole, Equinix:
...yeah. It's a combination. Yes. Yeah. So there's obviously the case where you can buy direct a supplier. There's the case where you're buying directly a rec, right. And then there's a VPP piece, where it's getting bundled up because you're investing in other parts of the grid to get to gain that. And so generally in big developed markets like Europe and the US North America, it's easy to do. And we very aggressively do that. In other parts of the world, it's a bit harder. So we we're not at a hundred percent, but that is obviously the objective.
Yevgeniy Sverdlik, DCK:
And it sounds like now that Google is kind of aggressively pursuing this green energy around the clock goal saying that just buying recs that are an unbundled from actual energy, isn't that effective. And so they really want to figure this out.
Jim Poole, Equinix:
Yeah. You've seen it. There's more of an interest in like, say the virtual power purchase agreements because in the virtual power purchase agreement scenario, you're adding capacity, green capacity, to the system. Right? And so the idea is that if you've got all these very large consumers of power like us or hyperscaler doing that, then essentially what you're doing is making it cheaper and cheaper and cheaper to buy green energy on a global basis. Even though there will be locations parts of the country where like wind isn't available everywhere, certain parts of even the United States are predominantly, still fossil fuel based systems. And people are making investments and figuring out the ways to do it, but it's not available today, so.
Yevgeniy Sverdlik, DCK:
Is there ever a situation where, okay, I'm looking at this location and I am say a Google or another, or maybe a software company, and I'm looking at this data center here, but unfortunately there's not, there's not a way to get a bunch of wind power in that location. Has there been a situation where that's a deal breaker?
Jim Poole, Equinix:
I don't know if I've ever heard of somebody not going to a place where there was demand. Like I said, I think the industry is trying to build up, like I said, enough capacity and to drive down the cost of actually doing the builds in various different ways and different parts of the country. Like I said, if you're in the middle of the country, wind is great. If you're off the coast you always hear about now they're putting wind farms that are far enough out that you don't see them from the beach, but when you see wave generation, there's all sorts of things that are being invested in.
Jim Poole, Equinix:
So I don't think the industry's at a point where it's going to say, "Oh, I'm not going to build in a place specifically." But certainly there's a huge amount of interest on our part. And other companies like us to kind of lead in this space and convert to green energy. And so now I think there's more tools I mean, we didn't have green bonds several years ago now we do. So it's growing in importance, I think, not just to companies like us, but others, you see more and more companies now joining various different initiatives.
Yevgeniy Sverdlik, DCK:
And we talk a lot about emerging data center markets on DCK the US is pretty well saturated. And that's the story with data center infrastructure. And there is much faster growth happening in markets where there haven't been that many data centers before, such as Bordeaux. Equinix has been one of the companies driving this trend for a few years. Now, you guys are expanding in Latin America recently entered Mexico in Asia Equinix recently entered India. Can you, well first explain what was the rationale for entering Mexico when you did, and how do you expect things to progress in that market going forward?
Jim Poole, Equinix:
Yeah, so that's a really good question. So the thing about our customer base that I think people don't necessarily appreciate, I guess, it's in our materials, it's public information, but it's very important to how we think. And so if you thought about our customer base, 88% of our customers are in more than one Metro. 74% are in more than one region and the regions being the Americas, EMEA and APAC, right, so big regions, right? And then 62% of our customers are in all regions. Right? So, like I said, it goes back to that land and expand kind of a thing. We have a very high affinity for multinational companies, right. And multinational companies do business in big cities all over the planet, not just in the United States or Western Europe, or certain big cities in Asia. So we're always looking, obviously, I think the good example, like you said, would be Mexico, right? Mexico City is a big, big, big city, right? Mumbai is a big, big, big, [crosstalk 00:38:01]
Yevgeniy Sverdlik, DCK:
So, what drove you guys to Mexico? What was it there? Was it a customer? Was it a critical mass of customers that wanted to be there?
Jim Poole, Equinix:
It was just constant, we're always assessing demand. So, we'd already been asked about that and we finally were able to get a deal that we wanted to get done. We did, in that particular case, we went in organically and did a purchase, with Axtel to take over their facilities. It's not, say, it's that different than what we just did in Canada. We've been in Canada for a very long time, but just in Toronto. So, we were in one city, the biggest city, but just one city in the entire country. And like what's happened in other examples of telecom in North America. A lot of the operators have decided that being in the data center business and being a network operator are not the same thing. In the same way that we bought Verizon's data centers, so we bought Bell's data centers. So similar with Mexico. So, when you can... We've always got, given who our customers are, we've always got demand against these places that we're not, the question is can you find the right deal? So we're always looking.
Yevgeniy Sverdlik, DCK:
I see. And so same question about India. You also went in there through an acquisition and it was a similar deal, there's always demand, except now you guys found inappropriate deal to as a point of entry.
Jim Poole, Equinix:
Yeah. No. And we've, yeah, that was a good point of entry. And we've been very open about the fact that we're continuing to look at other large cities in India. So, it's not a secret that we probably will end up in more places over the next several years in India than we are today.
Yevgeniy Sverdlik, DCK:
Okay, Jim, that's all I have. Thank you so much.
Jim Poole, Equinix:
Well, thanks for having me. It's been fun.
