From an Idea to an Innovation Center: An Australian Story

Jeremy Deutsch

If you build it, they will come, people have told me. In our case, the first “it” was a new subsea cable. Australia has always been a key market for Equinix and in 2001, we set up our first SY1 data center in South Sydney specifically because of the new Southern Cross cable just down the road. This cable represented a cornerstone of the internet for Australia, providing large scale connectivity to the US, and we knew it was fundamental to provide smooth and fast connectivity for the digital transformation of the Australian market.

Seventeen years, seven Sydney-based International Business ExchangeTM (IBX®) centers, and 45,000 square meters later, we’re preparing for the launch of our eighth data center in Sydney, named SY5 – a US$160 million (approximately A$224 million) investment for Equinix. It’s worth reflecting on how we got here and how things have changed thanks to our interconnection-led growth strategy.

Our growth story parallels how businesses and governments in Australia and around the world have transformed. They’ve found new ways to collaborate for the benefit of customers through the power of interconnection, leveraging digital ecosystems to create new business value and growth.

So much so that something magical has happened – inside Equinix. Many of the Australia’s and the world’s leading companies have followed us to our Mascot/Alexandria campus because they want to be a part of the high-tech cluster we’ve created here.

After all, what is Silicon Valley famous for? It’s an innovation hub, where the world’s brightest and most technologically advanced work alongside each other to achieve more than they could alone. It’s a network effect, through proximity with each other. We call it the power of interconnection.

In 2018, we spread this network effect further across Australia, increasing the number of Equinix facilities in the country from five to 15. We also brought our operations to four new markets including Perth, Canberra, Adelaide and Brisbane. Today, we’re doing it again – with SY5.

Evolution of interconnection

Our next phase of growth at Equinix – a big part of why we’re building SY5 – is being driven by the enterprise transformers. We’re seeing an ever-wider variety of organizations looking to move into the neighborhood to directly connect with each other and global partners to drive their digital transformation. This new wave includes all sorts of companies; including retailers, manufacturers, legal firms and logistics providers.

The Equinix ecosystem is set to become even richer and the network effect even stronger, helping these companies to scale their digital business. The healthcare industry, sensing the opportunities to enhance patient care through digital service delivery and data analytics, is increasingly looking to tap into this digital interconnection. Government, seeking service improvements and cost-efficiencies, is seeking interconnection too.

So how did we get here? When I look back to the year we showed up in South Sydney, it was the networks who knocked on our door first. They were looking to directly connect to other networks to peer and exchange data traffic, to solve for regional proximity and effectively scale the internet.

Next came the content companies. The content and e-commerce platforms were looking to directly connect to networks so they could privately exchange data and content traffic, place copies of website and content inside exchange points, and improve user experience of the web.

Next came the financial services companies. Again, not surprising – they’re often among the first to jump when it comes to new technology. Buy-side and sell-side exchange platforms were looking to directly connect to each other, to privately exchange market data and trade traffic, to place trading engines inside the exchange points, and to scale the electronic trading ecosystem.

The cloud access points arrived in the data center a bit later: Alibaba, Amazon Direct Connect, Microsoft ExpressRoute, Oracle, Google Cloud, SAP Cloud, SoftLayer and many others. Each of them wanted to plug into the digital economy and allow the digital economy to plug into them. This meant enabling direct connection that would help networks and enterprises to directly benefit from cloud services. By doing this they have paved the way for access proximity and scaling the cloud-enabled enterprise.

Along the way we expanded to meet growing demand. SY1 was joined by SY2, SY3 and SY4, and, later, SY6, SY7 and SY8 as a result of our recent acquisition. We now have over 265 cloud service providers, 75 financial enterprises and 55 content and digital media businesses living in 15,000 square meters of colocation space in South Sydney where hundreds of enterprise customers can directly connect to this rich ecosystem. They’re there because they want to be in proximity to each other. To interconnect and do more than they could alone.

It’s a growth story that reflects what’s happening with Equinix worldwide. In 2018, we continued to grow in leaps and bounds, with our global footprint reaching 200 IBX data centers. In Asia-Pacific, we expanded our footprint by more than 30%, increasing the number of IBX data centers from 30 to 40.

It’s all because of our commitment to underpinning digital transformation – an opportunity forecast to be worth A$315 billion (approximately US$223) to the Australian economy during the next decade. Inside the cabinets within our Sydney data centers, businesses are finding the connections they need to make the most of the hybrid multicloud to power their innovations.

In the end, it all ties back to interconnection, a fact that was little known 17 years ago, but which a rapidly growing number of businesses are coming to appreciate.

Or to put it another way: what once started as a ‘build it and they will come’ idea, is today the place to drive your digital innovation. I can’t wait to see what the next 17 years will bring for Equinix and our interconnected customers.

Jeremy Deutsch
Jeremy Deutsch President - Asia Pacific at Equinix