 Live from Santa Clara, California, it's theCUBE. Covering Open Networking Summit 2017. Brought to you by the Linux Foundation. Hey, welcome back everybody. Jeff Frick here with theCUBE. We're in Santa Clara at the Open Networking Summit 2017. We haven't been here for a couple of years. Obviously, open is everywhere. It's in hardware, it's in compute, it's in store. And it's certainly in networking as well. And we're excited to be joined. First off by Scott Rainovich. He'll be co-hosting for the next couple of days. Good to see you again, Scott. And our next guest is Ehab Tarazi. He's the EVP and CTO of Equinix. Last time we saw Ehab was at Open Compute Project last year, so great to see you again. Yeah, thank you very much, Jeff. Good to be here. I always, I really enjoyed the interview last year. Oh, good, good, good. Thanks for having me again. Well, now you said the Thai bars, so hopefully we can pull it off again. We can do it. So first off, for folks that aren't familiar with Equinix, give them kind of an overview. You don't have quite the profile of Amazon and Google and some of the other cloud providers, but you're a pretty important piece of the infrastructure. Yeah, absolutely. While we don't, no work close to the size of those players, in our, the place we play in the universe is very significant. We are the edge of the cloud, I would say. We enable all these players. They're all our biggest customers, as well as all the networks are our biggest customers. We have over 2,000 clouds in our data centers and over 1,400 networks. We have one of the largest global data center networks. We have 150 data centers and 40 markets around the world. And that number is going to get a little bigger now. We announced the acquisition of Verizon data center assets, so we'll have more data centers and few more markets. That's what I heard about the Verizon acquisition. So congratulations, just adding more infrastructure, but let's unpack it a little bit. Two things I want to dig into. One, as you said, you have clouds in your data centers. So what do you mean by that? Yeah, the way the cloud architecture is deployed is that the big cloud providers will have these big data centers where they build them themselves and it hosts the applications. And then they would put an edge for the cloud, either a caching edge or a compute edge or even a network edge in data centers like ours where they connect to all the enterprise customers and all the networks. So we have a significant number of edges. We have 21 markets so around the world where we have just about all the big list of names, edges that you can connect to automatically. From AWS, Google, Microsoft, Salesforce.com, Oracle, anybody else you think of. So this is kind of an extension of what we heard back a long time ago with you guys and like Amazon specifically on this direct neck. So you are the edge between somebody else's data center and these giant cloud providers. Absolutely, and since the last time we talked, we've added a lot more density, more edge nodes and more markets and more new cloud providers everywhere from the SaaS to the infrastructure as a service provider. And why should customers care? What's the benefit to your customers for them? Yeah, the benefit is really significant. These guys want direct access to the cloud for high performance and security. So everybody wants to build a hybrid cloud. Now it's very clear the hybrid cloud is the architecture of choice. You want to build a hybrid cloud, then you want to deploy in a data center and connect to the cloud. And the second thing that's happening, nobody's using just one cloud. Everybody's doing a multi-cloud. So if you want 40, 50 clouds like most companies do, most CIOs, then you're going to want to be in a data center that has as many as possible. If you're going to go global, connect to multi-cloud and have that proximity, you're going to have a hard time finding somebody like Equinex out there. Yeah, but I got a question. There was a trend, you mentioned the Verizon deal. There was a trend for a while where all these big service providers were buying data centers. And including ATT, CenturyLink. And now the trend appears to have reversed. Now they're selling the data centers that they bought. I love your insight on that. Why, that just wasn't their core competency. Why are they selling them back to people like Equinex? Yeah, that's a good question. What's happened over time as the cloud materialized is the data centers are much more valuable if they're neutral. If you can come in and connect to all the clouds and all the networks, customers are much more likely to come in. And therefore, if a data center is owned by a single network, customers are not as likely to want to use it because they want to use all the networks and all the clouds. And our model of neutrality and how we set up exchanges and how we provide interconnection and the whole way we do customer service is the kind of things people are looking for. So you're like, you're the Switzerland of the cloud. Yeah, and so the same assets become much more valuable in this new model. Right. And I don't know if people understand quite how much kind of direct connection and peer to peer and how much of that's going on, especially in the business context to provide a much better experience versus the wild woolly internet back in days of old where you're hopping all over the place, Lord knows how many hops you're taking. A lot of that's really been locked down. Yeah, I think the most important step people can think about is by 2020, 90% of all the internet, at least 80 to 90 will be home to the top 10 clouds. Therefore, the days of the wild internet while that continues to be significant, the cloud access and interconnection is very critical and continues to be even bigger. So, good. Yeah, so tell us what the logistics are of managing the growth, like you opening how many data centers a year and how much equipment are you moving into these data centers? Yeah, we manage, we spend over a billion dollars a year on upgrading, adding capacity and building new data centers. We usually announce five, six new ones a year. We usually have 20 plus projects if not more active at any time. So, we have a very focused process and people across the globe who manage this thing. We don't want to go dark in any of our key metros like Washington, D.C., the D.C. market or let's say San Jose, Silicon Valley, et cetera, because customers want to come in and continue to add and continue to bring people. And that means not only expanding the existing data centers but buying land and building more data centers beside it and continue to expand what we need to. And then every year or so, we go into one or two more emerging markets, you know, like going, we went into Dubai a while ago and we continue to develop it and those kind, those become long-term investments to continue to build our global infrastructure. The last few years, we made massive acquisitions between Tele City in Europe, Bit Island Japan and now the Verizon assets that expanded our footprint significantly into new markets, Eastern Europe, give us bigger market share in places like Tokyo, which helped us get to where we are today. Right. One of the themes in networking and cloud in general is that the speed of light's just too damn slow. Yeah. You know, at the end of the day, stuff's got to travel and it actually takes longer than you would think. Yeah. So does having all these increased presence, increased geos, increased physical locations help you address some of that? Because you've got so many more points kind of in into this private network, if you will. Oh yeah, absolutely. The content has become more and more localized by market and the more you have things like IoT and devices pulling in more data, not all the data needs to go all over the globe and also there is now jurisdiction and laws that require some of the content to stay. So the market approach that we have is becoming the center of mass for where the data resides and once the data gets into our data center, the value of the data is how you exchange it with other pieces of information and increasingly how you make immediate decisions on it with automation and machine learning. So when you go to that environment, you need massive capacity, very low latency, to many data warehouses or data lakes and you want to connect that to the software that can make decisions. So that's how we see the world is evolving now. One thing we see though is that complementing that will be a new edge that will form. A lot of people in this conference were talking about that. A lot of the discussion about the open networks here is how we support the 5G, all the explosion of devices and what we see that connecting to that dense market approach that we have where the data is housed. Yeah, yeah, that's interesting. You just mentioned all the devices which was going to be my next question. So the internet of things, how will this change the edge of the data center edge as you refer to it? Yeah, that's the biggest question in the industry, especially for networks. And the same discussion happened at Mobile World Congress here a little while ago. People now believe that there'll be this compute edge, that the network will be a compute edge because you want to be able to put compute, keep pushing it out all the way to the edge. And that edge needs to support today's technologies, but also all the open wireless spectrum, all the low-powered networks, OpenR, which is one of the frequencies for the millimeter frequencies, and also the 5G as you know. So when you add all that up, you're going to need this edge that supports all these different wireless options plus have some amount of compute. And that problem is very hard to solve without an open source model, which is where a lot of people are here looking for solutions. It's interesting because your definition of the edge feels like it's kind of closer to the cloud, where there's a lot of conversation we do about what's up with GE about the edge, which is right out there on the device in the sensor. Because as you said, depending on the application, depending on the optimization, depending on what you're trying to do, the device is some level of compute and score is going to be done locally, and some of it will go upstream and get processed and come downstream. But you're talking about a different edge, or you kind of see you guys extending all the way down to that edge when you think of the world. We don't see ourselves extending at this time, but definitely it's something we're spending a lot of time analyzing to see what happens. I would say a couple of big stats is that today our edge is maybe 100 milliseconds from devices in a market, or a lot less in some cases. The new technology will make that even shorter. So with the new technology, like you said, you can't beat the speed of light, but with more direct connections, you'll get to 40, 50 milliseconds, which is fantastic for the vast majority of applications people want. There'll be very few applications that need much lower latency all the way down to the sub 10 millisecond. For those, somebody like a network would need to put compute at the edge to do some of it. So that world of both types will continue, but even the ones that use, that need the very low latency for some of the data, it still needs to compare it to other sources of data and connect to clouds and networks where some of the data will still come back to our data centers. So I think this is how we see the world evolving, but it's early days, and a lot of brain power will be spent on that. Yeah. So as you look forward to 2017, what are some of the big items on your plate that you're trying to take down for this calendar year? Yeah, the biggest thing on our list is that we have an explosion of software model. Everybody who was a hardware is now has a software platform. When we were at OCP, for example, you saw NetApp issued the software as an open source. Every single company from security, storage, even networking are now creating that platform available as a software. Well, those platforms have no place to go today. They have no deployment model. So one of the things that we are working on is how we create a deployment model for this as a service model. And most of them is open source. So it needs a decoupling of software and hardware. So we are really actively working with all these players to create an open source software and just software in general ecosystem plus this whole open source hardware. So do you guys have a pretty aggressive software division inside of Equidex, especially in these open source projects, or how do you interact with them? No, no, our model is to enable the industry. So we have some of our tools, but mostly for enabling customers and customer service as well as some of the basic interconnection we do. The vast majority of all the stuff is our partners. And these are our customers. So our model is to enable them and to connect them to everybody else they need in the ecosystem to succeed and help them set up as a service model. And as the enterprise customers come to our data center, how do they connect to them? So I would say that's one of the most sought after missions when we go to conferences like this is everybody who announced today is talking to us about how they enable the announcements they make. And given our place in the universe, we would be a very key player in enabling that ecosystem. Do you have like a special lab where you test these new technologies or how do you do that? Yeah, that's the plan. And we connect this effort to also what we're doing with OCP and Telecom Infrastructure Project where we have a leadership position and highly engaged. We are creating a lab environment where people can come in and test not only the hardware from TIP and OCP but also the software from Open Network but many other open source software in general under the Linux Foundation or others. And in our situation not only can they test it against each other but they can test the performance against the entire world. How does this work with the internet, with the cloud and that's leading us to deployment and go to market models that people are looking for. All right, sounds pretty exciting. Equinix, a company that probably handles more of your internet traffic than you ever thought. That's very true. All right, well thanks again for stopping by. We'll look for you at our next open source show. Thank you very much, Jeff. All right, thank you very much. Thank you. Hey, I'm Tarazzi from Equinix. He's Scott Ranovich. I'm Jeff Frick. You're watching theCUBE from Open Networking Summit 2017. See you next time after the short break.