Transforming Your Costly Data Center Infrastructure into a Revenue Center (part 1)

Jim Poole

By Jim Poole (Part 1 in a 3-part series)

Data centers are typically viewed solely as facilities to house and protect servers. Whether you build your own or rent space, they seem to sit there as a necessary but painful expense with power, cooling, and security costs all contributing to a unidirectional flow of funds.

But there’s a completely different way to think about your data center, and by doing so, you can increase agility, reduce time-to-market, leverage new economies of scale, and find new customers – all while reducing cost and risk. In this two-part blog post, we explore how you can transform your data center into a revenue generator.

First, some facts. According to the latest Cisco Visual Networking Index:

  • Mobile data is predicted to double every year through 2014
  • Internet video alone will exceed 57 percent of all consumer internet traffic, and will be nearly two thirds of all mobile traffic by 2014
  • Overall, all forms of global IP traffic will quadruple

At the same time, Gartner predicts a threefold increase in the size of the cloud services market, from $50 billion to $150 billion, increasing traffic for business IP and private networks.

This is all great news if your IT infrastructure is prepared to grow, but according to the Telecom Industry Association, the overall network CAPEX spend is forecast to grow at a meager two percent per year between now and 2014.

Organizations that can’t build out fast enough to keep pace with demand will suffer. As a result, organizations must make sure their limited CAPEX spend is targeted where it will do the most good: on increased performance and greater interconnection.

The Need for Performance

With the explosion of connected devices and advent of new services in entertainment, gaming and even financial trading on Wall Street, the data center today is increasingly being seen as a means to gain a business performance edge.

The growth discussed above in mobile broadband data services and in virtualization and cloud computing all require an unprecedented level of data networking efficiency, reliability and scalability in order to ensure quality of service for customers, partners and end users in destinations around the world.

The Need for Interconnection

Across the globe, organizations want to remove geographic boundaries and tap global markets.

Carriers looking to expand quickly and compete on a global scale have understood the need for interconnecting their networks, but at Equinix, we’ve taken the interconnection value proposition to a new level.

It’s not just about network-to-network connections. We cater to five major ecosystems: networking and mobile, content and digital media, cloud and IT services, financial services and enterprise services.

What this means is that carriers are not just interconnecting to one another. Now there’s a huge opportunity to interconnect to growing traffic sectors including mobile network operators (MNOs), smartphone platforms, cloud providers, financial firms and video sites.

It also means that any company with its data center hosted in one of our carrier-neutral facilities is now able to directly connect to a global value-chain of partners for improved speed and performance, along with lower costs and new revenue opportunities.

In all, Platform Equinix, which comprises nearly 100 network-neutral data centers in 12 countries, includes:

  • 500+ cloud and IT service providers
  • 550+ financial services companies
  • 425+ content and digital media companies
  • 10 of the top 10 video platforms
  • 5 of the top 5 social networking sites
  • 8 of the top 10 advertising networks

And think about this for a moment. Equinix has a total of more than 4,000 network-centric businesses, and the interconnections between these businesses grew by an amazing 27 percent last year. We recently calculated that our customers are spending somewhere between $5.5 billion and $6 billion annually on the telecommunications services that run over cross connects to network services providers in our sites. This is just the tip of the iceberg in terms of their total spend on services from the other ecosystems.

Our services-neutral environment also provides an aggregation point for customers for virtualization and cloud services, communications services such as HD video conferencing and telepresence, and anything else that’s part of a services portfolio.

In part 2 of our 3-part series, we’ll take a look at the data center as revenue center message in customer presentations at the ITW conference in Washington, DC (May, 2011). There we took the guesswork out of capex deployments and delineated the vertical view of connectivity growth across Platform Equinix’s 84,000+ interconnections.

Later in part 3, we’ll look at how one company has successfully leveraged Platform Equinix for revenue generation.