With 2019 just around the corner, I wanted to reflect on what a very special year 2018 has been for Equinix. The company reached a significant milestone in 2018 as we celebrated 20 years of protecting, connecting and powering the digital world, and we continued to see a strong demand for Platform Equinix® – a colocation and interconnection platform, posting our 63rd consecutive quarter of revenue growth for the third quarter of 2018.
On a personal level, it was my 18th year of service here and I’m proud of how Equinix has contributed to the digital economy, and feel grateful to have played a part in it. Looking back on 2018, in Asia-Pacific, our role in accelerating interconnection to help companies succeed in their digital journeys has propelled us to become one of the top colocation and interconnection providers in the region.
Here are some of the highlights from this year and our outlook for the next.
In 2018, Equinix has continued to grow in leaps and bounds with our global footprint of 200 International Business Exchange (IBX) data centers. For Asia-Pacific, we expanded our footprint by more than 30%, increasing the number of IBX data centers from 30 to 40, regional footprint from eight to 12 metros, thanks to our acquisition of Metronode completed earlier this year.
This most recent acquisition in Australia strategically took us to the next level of development in the Asia-Pacific region as we already held a market-leading position in both the Hong Kong and Singapore markets. The acquisition not only boosted our position in Australia significantly, increasing the number of Equinix facilities in the country from five to 15, but also brought our operations to four new markets including Perth, Canberra, Adelaide and Brisbane. In doing so, we’re well positioned to help more customers reach everywhere, interconnect everyone, and integrate everything with our national footprint in Australia and our robust ecosystems which are now home to more than 2,200 companies in the region.
Mainland China is another key market for our continuous growth. Off the back of our existing strategic partnership with China’s Datang Gaohong Information Technology Co. Ltd (DGIT), Equinix formed a joint venture with DGIT in September 2018. We’re excited about the potential this JV would create to better serve our local and multinational customers. With this stronger tie, Equinix will be able to tap further into DGIT’s market know-how, government relationships, and R&D capabilities.
Our operations expanded organically in Asia-Pacific too. Our expansion efforts in Australia, Japan and Singapore have helped cement our business in the region, so we could meet the growing demands for interconnection from our customers.
Beyond footprint expansion, we also focused a lot on expanding our interconnection portfolio.
Earlier this year, we rolled out inter-metro connectivity of Equinix Cloud Exchange Fabric™ (ECX Fabric™) in Asia-Pacific. Customers in the region can connect on demand to any other ECX Fabric customers across industries in Australia, Hong Kong, Japan and Singapore, allowing them to connect in near real-time to service providers, suppliers and other businesses on-demand, providing a new level of agility and flexibility.
As a testament to the value our customers have seen in the reach, reliability, security and network density we offer, our interconnection revenue in the region increased by 18% year-on-year to $33 million for the third quarter of 2018. Cross connects between customers also increased by 14% to 51,600 year-on-year in the same period.
It wasn’t just our customers that saw the value of our offerings in 2018. In Asia-Pacific, we have been recognized for our innovative approach and service by the industry, as manifested by the cloud and data center accolades from the BroadGroup, Frost & Sullivan and Networks Asia.
As Frost & Sullivan’s Nishchal Khorana put it: “Equinix’s extensive presence and interconnection platform is creating a compelling value proposition for enterprises and cloud services providers. The company’s effective growth strategy in the digital era has enabled it to achieve significant progress and success in the region.”
2019 promises to be a no less thrilling ride. Businesses across the world are evolving and executing their digital transformation journeys, in a race to disrupt or risk being disrupted. The ability to seamlessly connect with business partners and transfer data in real-time is becoming increasingly important. The second annual Global Interconnection Index (GXI), announced by Equinix, predicts that Asia-Pacific will grow at a 51% compound annual growth rate (CAGR), contributing more than 27% of interconnection bandwidth globally.
Broadening our vision, deepening our roots
Looking ahead to 2019, we’re excited about broadening our vision and deepening our roots in Asia-Pacific. While we are always on the lookout for new markets in the region, we will continue to expand our footprint in existing markets to address the rising interconnection demands from customers. We’ve already announced new builds and expansions in the coming year, including Australia, Mainland China, Hong Kong, and Tokyo. In addition, we’re working closely with our customers to see how our growing product and service portfolio can better support and extend their transformation agendas.
Innovating access and security
One of the feedback we always hear from our customers is the increasing need for global interconnection. We strive to enhance our interconnection values across the globe, so Platform Equinix will serve as a massive multiplier for our customers. With ECX Fabric’s global connection in the roadmap, customers will be able connect in near real-time to any other ECX Fabric customers, service providers or suppliers, anywhere in the world. These include AWS, Google, Microsoft Azure and more.
SmartKey is another exciting innovation. This cloud-agnostic, HSM-as-a-service offering boosts data security by offering unified key management, encryption and tokenization-as-a-service. We recognize that the advantages of data sharing can be offset by the increased data vulnerability and the complexity of key management. SmartKey simply simplifies security and reduces the headaches associated with provisioning, storage and control of encryption keys. You will surely hear more from us on these innovations among others next year.
Heading into 2019, all we do will continue to be designed with our customers at the core – by listening to them and learning from them. We will keep expanding in locations most demanded by our customers, introduce further innovations around our data center infrastructure, connectivity services, security, apps infrastructure and support service delivery at the edge. We are also placing focus on ensuring our procedures are honed to allow customers everywhere to have a consistent Equinix experience.
It’s our incredible team, who have allowed us to achieve the wonderful successes in 2018, that will lead the charge. A great company isn’t built by a single leader but a team of great people. I’m proud of our folks at Equinix and the “Magic of Equinix” we’ve created in our culture. I have every confidence in our amazing team’s ability to set us and our customers up for further growth in 2019!
And of course, a huge thank you to all our customers and partners. I wish you a safe and prosperous new year!