No interconnect autumn for Equinix

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US data centre provider Equinix is talking up services it claims will help drive peering and provide alternatives to Australia's near-monopoly by the Gang of Four.

US data centre provider Equinix is talking up services it claims will help drive peering and provide alternatives to Australia's near-monopoly by the Gang of Four.

Phil Koen, the Singapore-based president and chief operating officer at Equinix Asia-Pacific, said the Australian division was pushing new managed services that should attract more customers to the company's Sydney-based internet business exchange (IBX).

Equinix' IBX allows customers to interconnect - or 'peer' - with different network partners. Peering in Australia has been largely restricted to the 'gang of four' - Telstra, Optus, MCI Worldcom/OzEmail and AAPT/ - created by ACCC ruling in 1998.

Industry players - such as Pacific Internet and PIPE networks -- have argued that increased access to the network for all ISPs would bring prices down and lift network performance for end-users.

'The value of a network is exponentially driven by the number of users. And all networks ... have to interconnect at some point, because that's the way we drive maximum value, maximum users,' Koen said. 'And, to the extent that we are able to have great content, I think we'll start to make in-roads into the peering community.'

As a service offering around its data centre, Equinix is launching an around-the-clock monitoring and notification service, dubbed Equinix Command Center, in the Asia-Pacific. The company will monitor customers' servers, IP ports, IP addresses and so forth and notify them when things go wrong, he said.

'This is different from what the larger system integrators that provide fully managed services do,' he said.

Other managed services would be developed, he said.

Koen said companies wanted to retain more control over their internet infrastructure than many large integrators were offering. Equinix wasn't offering pure-play managed services, so wasn't competing with the likes of IBM or EDS and that was part of its advantage, he said.

'We are a network-neutral player. We are not in the network business [and] not in the telco business. We are delivering data centre services with value-added services around that,' he said.

Equinix launched its Australian operation a year ago. Last year was 'fantastic' for the company globally, Koen said, with the NASDAQ share price rising from US$3 to US$30.

'We did a lot of things and had our business all integrated together, and got all our old SLAs integrated,' he said. 'We started from scratch. A data centre has very high initial costs in setting it all up.'

The five-year-old firm - after suffering what Koen calls a 'near-death experience' in 2000 when market capitalisation fell to US$16 million -- has 14 IBXes in 11 nations.

The company today has US$800 million invested in property around the world, and customers including MSN, Yahoo, and Google. 'We have over 150 different networks worldwide and also some of the world's largest system integrators - people like IBM, EDS and CSC,' Koen added.

In 2003, Equinix added 21 customers, he said, some of whom needed 100 square metres of data centre space. 'We finished 2003 with revenue of US$118 million, and we are free cash-flow positive,' he said.

Equinix grew 10 percent globally by revenue last year, and wanted to double that growth in the fourth quarter, Koen said. Demand for the 15 percent of its business in the Asia-Pacific was expected to grow faster than in the US, especially as broadband penetration ramped up, he added.

'We think our revenue should be in the range of up to US$162 million,' Koen said. 'The best way to think of us is we have gone and built airports in eight major countries. The airlines are like networks and we are creating an environment for them to come to our airports.'

Doug Oates, director and general manager at Equinix Australia, said the company was consolidating in Sydney but would seek to open data centres elsewhere in Australia.  While serving Melbourne from Sydney was technically possible, he said he did not believe the market was mature enough to accept it.

 'A lot of people have in their minds that their critical IT infrastructure should be in the same city where they are located,' Oates said.

Equinix -- which dubs itself 'the home of the internet' -- provides services including data centre space and services such as Gigabit exchange, IP connectivity and tape management.


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