Please welcome Chief Financial Officer, Keith Taylor.
Well, welcome everybody. Thanks to all of you for coming here and visiting with us today, whether you're live or whether you're online, it's just, it's great to be here on stage with you for Equinix's 2023 Analyst Day. As you saw by that video. I love that video, by the way. As you saw by that video, this is the eve of our 25th anniversary. Tomorrow is 25 years operating as a company, and you know, it's been five years since we've been able to stand up on stage in front of you, so we're excited to be here. Again, thank you. It's two years since we last had an Analyst Day. As many of you know, we're about to say some forward-looking statements. I think that's why many of you are here, I hope.
I do have a responsibility. Because we are going to be making some forward-looking statements, please refer to our SEC documents, our most recently filed 10-K, 10-Q and our 10-K for risk factors and uncertainties. If you have any questions today, please email, sorry, email invest@equinix.com. Send an email if you have any questions, and we'll try and get to them today. If we don't get them, to them in the presentations, we'll have Q&A at the end of the day. We have a very exciting program for you today. Charles is going to start us off with the opportunity ahead.
We have Nicole, who's going to interview a fireside chat with Jon Lin and Scott Crenshaw, our two General Managers, one for data centers, one for digital services. We're going to give you a nice break, coming back, you're going to get the benefit or actually, maybe not coming back, but you're going to hear from Mike Campbell. Mike Campbell is going to talk about our strategy, our multipronged strategy on how we go to market. I think that's going to be a very worthwhile segment of our presentation. We have the benefit of Tara Risser, who's going to speak to three of our customers in a customer panel. The customer panel's Nasdaq, NVIDIA, and Zscaler. I'm going to wrap it up today, I'm going to talk about durable value creation.
With that said, we have five core topics that we want to spend time talking to you today. It will be our track record of delivering the expanding market opportunity, managing through a dynamic and complex global environment. It will be about our balance sheet, it certainly will be about durable value creation. Again, I want to thank all of you for being here today. I think we're going to have a great show, I look forward to spending more time with you. Let's get started.
Please welcome President and Chief Executive Officer, Charles Meyers.
Good morning, everybody. It's fantastic. I feel like I've been saying this all of 2023, but it is great to be back in person with folks. We haven't had the chance to be back on stage in five years, so it's really great to be here. I want to extend my thank you added to Keith's for all of you, for investing the time to be with us here today. And on behalf of my 12,000+ colleagues around the world at Equinix, I welcome you to our Analyst Day. Whether you're here at Times Center or virtual, we're really appreciative that you've made the investment. I, the reality is, I mean, I think if you look, I think you'll see that the...
in the video, it talks about what an exciting time it is, I think, for our business and for our world. The reality is digital is changing everything. It's changing our lives, and increasingly it's changing how business gets done. It's fundamentally reshaping the competitive dynamics in industries around the world. Quite possibly, digital is the most transformational set of technologies our world has ever experienced, and it's setting us up for digital to be the primary economic growth driver and driver of social progress that we will see for the coming decade and beyond. That's accelerating innovation, enabling ecosystems and positioning us, you know, to really take advantage of those opportunities ahead of us.
It's also elevating the standard of living for billions of people around the world. This revolution is fueling demand for digital infrastructure, and not just any digital infrastructure, but digital infrastructure that's more distributed, more cloud connected, more ecosystem-enabled, more on-demand, and more sustainable than ever before. Today, you're going to learn more about this revolution, and you're going to hear about the unique role that Equinix plays in making it possible. As Keith talked about, we're going to talk, yeah, I'm going to kick things off today. Keith is going to come back to bat cleanup or whatever it is that hockey players, I guess, do in that sports analogy. In between, you're going to hear from what I'm confident is the best team in our industry.
Importantly, from several of our customers that we get the privilege to serve every day. They're going to talk to you about, these are customers that are really shaping the digital revolution, and making it all possible, and customers that have selected Equinix as their partner of choice, and they're going to talk to you about why that is. Our content is really going to be shaped around these five, our track record of delivery, or as they say in the agile world, our say-do ratio, we talk about a little bit about the robust market, demand and, demand backdrop that we continue to see, and how that's translating to an ever-increasing and expanding market opportunity.
Talk a little bit about the complex and dynamic environment that we face, and how we're managing through that, and how we're bringing our advantages to really de-risk the path forward for the business. Talk about what those durable advantages are, and how they, and in particular, Keith will talk in depth about our balance sheet and how that translates to value creation. First and foremost, value creation for our customers, because they are at the center of it all. But by serving those customers exceptionally well, we believe that we're confident we can continue to deliver sustained value creation for you, our investors. You know, to add some credibility, hopefully, to that bold statement.
and, you know, one of the things that I was talking about as we came into this is I really believe that Equinix, from an investment thesis standpoint, is one of those rare opportunities that is what I refer to as high floor, high ceiling. I think, you know, this is a company that provides predictable, proven, demonstrated growth, but also enormous upside potential. As I said, I hope that this slide, adds a little credibility to that. Many of you have probably seen versions of this chart over the years, and it's easy to understand why our teams are so proud to show it. Since 2010, as you can see, is sort of this inflection point in the business. We have dramatically scaled the business, both organically and through M&A.
You see all the M&A activity that we've done on that, on that upper line. It highlights what I think is consistent and disciplined execution that we're very proud of, but it also highlights the incredible strength of our business model, of our highly differentiated business model, and it features two major distinctions that really separate Equinix from the pack. Our interconnection strength, shown on the top of this chart, and our expansive global reach, as demonstrated in terms of our metro reach, which now exceeds 70 markets around the world. These things continue to position us as the partner of choice, for customers and as a critical point of nexus in those customers' digital transformation journey.
Since we were together two years ago, we've continued to execute on the business, and as I said, do what we said we were going to do. Keith's going to talk about the fact that we have continued to meet and exceed the financial targets that we've laid out, and we've done that by continuing to invest in our business and invest in our people. On the left-hand side of this, you see, you know, what we've done in terms of continuing to invest in the business, adding 8 new metros since we were last together, continuing to deploy our digital services portfolio, now in 24 metros, allowing low latency access to the vast majority of the global population, and investing the capital from our healthy balance sheet to fuel 28,000 new retail cabinets and 100+ MW of xScale capacity.
On the right-hand side, continuing to invest in our people. Putting forward a $50 million investment in the Equinix Foundation, to support digital inclusion. Continuing to pursue our aggressive sustainability and ESG goals with a 23% reduction in operational emissions from our 2019 baseline. The formation of a transformation office, as Keith said, you're going to hear from Nicole Collins, our terrific CTRO, who's going to talk a little bit about how we're driving forward to a platform vision that I'm going to talk about here a little bit in my later in my presentation.
We're very proud and humbled to have continued to receive accolades from a variety of external sources around our culture and our cultural commitment, continuing to build on the magic of Equinix and attract, inspire, and develop the absolute best talent in the industry. I want to talk a little bit about the setup that has occurred over our 25-year history, and how this series of catalysts have created a cumulative and reinforcing set of effects that now position, I think, us in a situation where we are seeing the greatest underlying drivers of digital demand and demand for digital infrastructure than we've ever seen before.
If we go back to sort of the turn of the millennium, in the 2000s, really, the 2000s, that first decade, was probably a more of a consumer-led decade, where web, social, mobile was really orienting us around an increasingly digital world. Also around this 2020 time frame is when the groundwork started to be laid for enterprise transformation. 2020 happened to be the year that Marc Benioff and team put out the little buttons, the no software buttons. Remember those? Well, in sort of the typical crazy, like a fox way that Salesforce, the reality is this sort of no software, you know, gave rise to an environment where software is more important than it ever has been and more pervasive and higher volume than it ever has been.
It's delivered through a fundamentally different delivery model that really started to set the stage for enterprise transformation. Fast forward to 2010, and that is really, in many respects, although not the beginning of it happening, but the beginning of a really accelerating cloud transformation. In 2010, AWS was a $500 million business. That almost seems unbelievable today. Yet that sort of ignited what I think we are now seeing, still in the somewhat early innings, to build on my earlier metaphor, of what I believe is a multi-decade transformation of enterprise IT and the sort of the emergence of hyperscalers and even the term hyperscalers because of the hypergrowth that has been, you know, sort of demonstrated from those companies over the course of that decade.
Then came COVID, which was, you know, candidly, a huge pain in the you know what in many respects. You know, it was also an incredible opportunity and a learning opportunity for us, probably as individuals, as companies, and as a global society. I know one thing I learned as an individual is replacing airplane time with time on my bike made me a much healthier person. I'm challenged to sustain that now as we're back on the road. That's probably less relevant to this group. What is really relevant is, I think one of the key things we learned was that those that were prepared for a digital world are outperforming those that were less prepared.
That reality really came to bear during the course of the pandemic, and I think really fanned the flames of digital transformation over the last several years. Now we find ourselves here in 2023, probably at the beginning stages of another wave of transformation and a catalyst that has been there a while, yet has now emerged into the public consciousness and is beginning to be adopted at absolutely unprecedented levels, and really is gasoline on the fire to transform both business and society. You're going to hear more about all of these things and about their mutually reinforcing effects of these various catalysts on our business over time.
Collectively, these things have created an environment that I think despite a series of challenges and macro pressures, including a pandemic, a war, energy disruption, and a macro environment that is as complex and as fast-changing as we've seen in a very long time, is creating an incredibly durable environment for the demand for Digital Transformation. The reality is that we're seeing our customers have a deep commitment to Digital Transformation. A commitment that's driving a continued migration from owned data centers to hybrid infrastructure that delivers superior performance, greater agility, and a credible path to people achieving their sustainability goals. All that is translating to an incredible growth rate, 8x. IDC is estimating that Digital Transformation is growing at 8x the rate of the broader digital economy.
A huge economic opportunity, which I think candidly, is significantly underestimated from this 2006 estimate of $100 trillion up for grabs, an emerging reality that companies, particularly large global companies, really must embrace digital or be left behind. Interestingly, I think important for us, at the heart of this digital wave is an irreversible movement to as-a-service, as the primary consumption model, service providers are really leading the way. On the left panel of this slide, you'll see sort of a breakdown of the Forbes Global 2000 market cap. Actually, this is just the top 200 of the Forbes Global 2000, which represent about half of the total market cap of the Forbes Global 2000. It shows a breakdown between service providers and enterprises.
In 2012, you'll see that the combined market cap of the top 200 companies was about $17 trillion. About $3 trillion of that in the hands of service providers and about $14 trillion in the hands of traditional enterprise verticals. Fast-forward 10 years, and you're now at what is that? $36 trillion collectively. Again, about half of the total G2000 market cap, 200 companies, $25 trillion of those, service providers, 175 of them, traditional enterprise. The market cap is now $11 trillion in the hands of those $ 25 trillion service providers and $25 trillion in the hands of the other enterprises.
I think that if you fast forward another 10 years, I think you are probably going to see an inversion of the ratio. Service providers continue to command more and more of the value capture or enterprises who are forced to behave like service providers. Why is that relevant for Equinix? The reality is, Equinix's bread and butter has been and will continue to be service providers. We have built our business on the backs of providing the foundational infrastructure that makes it possible for global service providers to scale. You can see here, we are, we have the privilege and pleasure of serving all of the hyperscalers, 100% penetration of those in the G 2000.
96% of the network providers in the Forbes Global 2000, one in Russia and one in China that are not on the list. 80% of the other 2 sort of service provider-centric verticals, content and digital media and cloud and IT. Our position, as I said, has always been to serve these customers, and really has been the bread and butter of Equinix, and I believe that dynamic is going to continue to serve us very well in terms of our future-looking growth. This is really not an accident. This was the genesis and the intent of the business and our founding vision from its very start. We set out to create a platform company.
Perhaps it wasn't called that, at the time, but we always knew that it would be fueled by ecosystems. At its core, we started to create a peering fabric, and an ecosystem of peering partners, that we knew would fuel an ecosystem effect. What we probably didn't really fully appreciate and realize is that original peering ecosystem rapidly, on the sort of backs of the increasing returns phenomenon that are central to ecosystems, rapidly created Equinix as the de facto standard for network interconnection around the world, and created a base of now 2,000 plus network service providers that form the foundation of that ecosystem.
That, it's that ecosystem, in many respects, that has been the catalyst for all other ecosystems to follow: financial trading, you know, media, digital advertising, smart vehicle, more, in more, recent years. Powerfully, it also was the catalyst and the gravitational pull, for the hyperscalers and for scaled service providers who came here to interconnect to networks and have now created their own gravitational pull that is creating a broader ecosystem as broad-based service providers and global 5,000, 10,000, 20,000 enterprises are implementing hybrid and multi-cloud as the architecture of choice. Those sort of center, ecosystems, tend to be still more colo-centric, more, consuming our data center services portfolio.
As you move to the outer markets, you see a more hybrid approach, with people consuming some level of colo and private infrastructure and then using our digital services to integrate that into hybrid multi-tiered architectures. Now digital services also opening up a broader and more expansive opportunity for us to reach influencers and new personas who are shaping IT architectures around the world. That's application owners, application developers, application architects, etc.. So all of this together is creating a huge and rapidly expanding market opportunity for the firm, all stitched together by a market-leading interconnection platform that makes value delivery and value creation more frictionless and more powerful than ever before.
Let's talk a little bit about the market opportunity. In 2018, when I was up here on stage, we estimated that the 2023, the current day TAM, would be $32 billion for colo, which, by the way, was significantly undershot when you look at the total market. We naively sized the incremental enterprise opportunity at $10 billion. Since then, a number of things have happened. Hyperscale demand has accelerated in an almost unimaginable way. We've added 20 new markets and significantly expanded geographic reach of our platform. We've expanded our DS portfolio, both in terms of offerings and reach. We've captured 41% of the Global 2000, meaning that we've made significant strides but have a lot of addressable market left to be had.
AI has rapidly gone from experimentation to a full-scale phenomenon. Every day, we're seeing more and more of the market move from this giant gray bubble, which is not to size and is $5.8 trillion of spend, and moving into the blue bubble and becoming digital infrastructure markets. You can see in there, that includes, sort of core data center infrastructure, a large amount of as-a-service infrastructure that supports the as-a-service, the X as-a-service broad, market opportunity, and now the early stages of a massive opportunity around AI. We believe that that translates to roughly, by 2026, a $140 billion market opportunity. Much of that in sort of our traditional sweet spot of data centers and colocation.
Some of that in the form of advancing our cloud fabric and other things into a richer set of services and opportunities around cloud networking. Beginning to have deeper penetration into the hybrid cloud infrastructure, both with our data center and digital services portfolio, and then beginning to tap into the AI opportunity. This is actually our serviceable addressable market, which will continue to increase as we expand our geographic reach even further. Whether our real TAM or SAM is $140 billion or $100 billion or $200 billion, I'm not that sure, because there's always some elements of false precision in these things, right?
You know, what I can tell you is, the market opportunity, the market is there for us to drive continued very attractive growth in our business. I would say that a perfectly acceptable answer for how big is the TAM is big enough, and in this case, it is a very large and we think significantly expanding, addressable market opportunity. We think that, by the way, we are moving to the market, and the market is moving to us. What does that mean? Let me talk a little bit about that.
If you overlay the $140 billion of market opportunity that we see in 2026 against how the market lays out today, we believe about a relatively smaller portion of that, about $30 billion, are in the hands of digital leaders. Companies that have the skills, the experience, the need, the motivation to really accelerate digital transformation, and who are investing and who typically are using our platform and the capabilities of that platform in a rich and a very complete way. We think about $40 billion of that would be in the hands of people that are currently sort of in that digital follower category and about $70 billion in the hands or the wallets, more accurately, of digital starters, companies who are just getting going in their digital transformation journey.
As these companies advance from left to right on this chart, as we expand both the reach and the capability of our platform, the SAM and our ability to capture it will continue to increase. Digital transformation is increasingly dictated by a data and application-centric world. Those, the need for data and applications and the performance requirements that underpin them is driving very different demands on digital infrastructure, as I said earlier. Customers are demanding that it be more distributed, more cloud-connected, more ecosystem-enabled, more on-demand, and more sustainable than ever before. Fortunately, these requirements map beautifully to our distinctive advantages, and they continue to position Equinix as the partner of choice, and you're going to hear that, I think, from our customers today in a powerful way.
Let's talk briefly about each of these evolving customer needs and how we're responding to them. We'll start with the customer need being more distributed. I always say to our teams around the world, our selling teams, that the map continues to be one of their largest, you know, sort of selling tools, and most powerful selling tools. If you look at it, almost all of our growth in terms of deployments over the last three years has come in the form of distributed infrastructure deployments. In fact, single metro deployments actually declined over a couple of years.
They've come back a little bit, probably on the backs of our aperture, increasing a little bit with digital services, but almost all of our deployment growth has come in the form of truly distributed deployments, with 3 region deployments continuing to lead the way, people who are doing business with us across all 3 regions. To put that into a little bit of sharper focus in the middle panel of this slide, this shows the average sort of composition of deployments for our top 200 customers, our top 100 service providers on the left of that panel and our top 100 enterprise customers on the right of that panel. 83%, 80% on a blended basis of our customers around the world are doing business, these top 200 are doing business with us in all 3 regions of the world.
That means that they, you know, multi-metro deployments are now or, you know, 2/3 of our total revenue. On average, service providers are deployed in 12 countries and 21 metros, with enterprises sort of rapidly growing towards that, in an average of 7 countries and 10 metros around the world. By the way, the more distributed the deployment is, the more sticky it is, the lower churn rates, higher customer lifetime value, and these customers represent 60% of our total recurring revenue. It's a really powerful, you know, sort of articulation of how people are using Platform Equinix today. On the right-hand side, you can see how we're continuing to invest behind that. We're now at 6 continents. We are running out of continents, I'll grant you that.
We have plenty of room left on countries and even more on metros, right? There are 200 countries out there. We're in 32. We do believe that we continue to be the best manifestation of the digital edge, and we are going to continue to be selective about where that expansion needs to occur, but it will continue to need to occur. I think you'll continue to see us invest behind the expansion of our platform, and I'll talk more about that a little bit later as well. Secondly, customers really are demanding and needing that their infrastructure be more cloud connected. Cloud is transformational, and I have talked about it many times and characterize Equinix as, in many respects, the trusted center of a cloud, an increasingly cloud-first world.
Our interconnection performance continues to show up in that way. Interconnections to hyperscalers are the single fastest growing element of our interconnection portfolio, growing at 16% CAGR, and now at 64,000, or about 15% of the total interconnections, built over the course of our history. Again, I think that's going to continue to overindex in that regard. If you look at provision capacity on Equinix Fabric, which is really the primary means by which people are interconnecting to these clouds, it is growing at a 42% CAGR, given the significant increases that are occurring in average connection size and bandwidth. Now 178,000 gigabits per second, again, growing at 42%.
We're continuing to invest in ensuring that we are that trusted center of the cloud-first world. It starts really with our investment that we've made, and we set out a number of years ago to try to be the center of that cloud ecosystem and said, "We have to go win network nodes and on-ramps for all the major hyperscalers." We've been enormously successful in that pursuit. Let me show you a little bit what that looks like graphically. I know this is hard to see from out there, but I'll orient you around it, and you'll see it in the online version of the materials that are posted. This is our map of locations around the world. This shows roughly the top 50 or so markets that are out there.
All the markets in which we have some level of native cloud connectivity. Each of the bars shows essentially the number of clouds that we have connectivity to, and if they're a solid color, that means we have a native cloud on-ramp to that cloud provider. What you see is all these sort of large bars that are there means that we have deep multi-cloud connectivity in all of these markets. We have 210 cloud on-ramps, have added 35 since our last Analyst Day, you know, together.
We have, you know, anybody who has decided that hybrid and multi-cloud is their architecture of choice, by selecting Equinix as their partner, they can immediately access, as you'll see here, 25 markets around the world, where the top 3 cloud providers are simultaneously available, and 12 markets around the world, where 5 or more of the cloud providers are available. No other provider in the world can sport more than 5 in more than 1 location, and we have it in 12. We continue to be really the dominant force in cloud on-ramps and cloud connectivity through the combination of our coverage and cloud fabric.
Customers also are continuing to invest in ensuring that their digital infrastructure is ecosystem enabled. We've done a phenomenal job of attracting the magnets that fuel these ecosystems. Essentially, all of the top providers in all the major sectors that are really driving, you know, ecosystem growth and increasing returns phenomenons. Top 10 of 10 cloud providers, 10 of 10 media companies, 10 of 10 largest telecoms. That, by the way, 10 of 10 on telecom goes to probably 100 of 100 or 200 of 200. Virtually everybody is popped into our facilities around the world. nine of the 10 largest banks, and 85% of the Forbes 100 Digital Companies.
Equinix continues to be the place, really a critical point of nexus for digital transformation strategies around the world. You've seen these charts probably over the years in terms of the health and the diversity of our ecosystems. All of our ecosystems continue to have an increasing level of diversity, which is what this chart shows, which again, 16% growth in unique A to Z relationships in the cloud ecosystem, which actually matches the volume growth as well. I showed 16% on an earlier slide, which is a different 16%, and that's volume growth. At the same time, we're seeing 16% growth in the diversity of A to Z relationships, and so incredibly healthy ecosystems being facilitated as customers need their infrastructure to be more ecosystem enabled.
Next is more on-demand, an area that is newer and more challenging for us as we continue to extend our capabilities. People want to interact with our platform in different ways, more programmatically, more API driven, and we're seeing that begin to be the case in terms of how people interact with our platform. In the center, you see that we're investing in our digital services portfolio, which is shown on the right, Equinix Fabric, Equinix Metal, and Network Edge, really the three cloudy-type services that are really on-demand, have on-demand availability for our customers. Those are growing at a 44% CAGR, double the rate, I'm sorry, triple the rate of our broader business.
While we're going to continue to invest in those on-demand services and improving the customer experience and making it more, you know, the sort of demand capture ability of our data center services footprint also continue to evolve in those same ways. Finally, customers are demanding that our digital infrastructure be more sustainable. This, I think, we're an area where we're distinctively advantaged. Gartner's recent survey finds that 75% of companies are going to increase their spend with IT vendors who have a demonstrable and committed timeline and goals on sustainability. Vice versa, they're going to decrease the spend for those who do not. We've been able to really establish ourselves as the partner of choice for customers that are looking to meet their sustainability goals.
We've done that by continuing to invest. We believe made, we have had 96% renewable energy coverage in 2022, with a commitment to getting to 100%. We've, as I said, we've made a 23% reduction in operational emissions against our 2019 baseline and have been recognized by a number of external parties for our commitment to sustainability, including an A rating on the CDP Climate Change report. That ability for us to meet those evolving and changing needs of our customers is what fuels our ability to powerfully and passionately pursue our purpose every day. That purpose as a company is to be the platform where the world comes together, enabling the innovations that enrich our work, our life, and our planet.
I say this one a lot, you know, it's something that I continue to believe gets our teams around the world to spring out of bed and to serve our customers every day and to be excited about the positive impact they're having on our world. To fulfill that purpose, we aspire to a bold future vision for our platform. Continuing to build on the most differentiated and extensive physical footprint that we have, we often refer to ourselves, again, as the best manifestation of the digital edge, with 248 data centers across 71 markets in 30 country, 30+ countries around the world. We're going to continue to have that foundation, something that is exceptionally difficult to duplicate, particularly in an environment where the capital to do that is harder and more expensive to come by.
On top of that physical footprint advantage, we're going to continue to build the most comprehensive portfolio of foundational infrastructure services to meet the needs of our customers, both those who want to consume the more traditional interconnected colo, and related services, and those who want to consume more on-demand, software-enabled digital services, and then the most comprehensive interconnection portfolio to really stitch all those together. Importantly, we want to package all of those and leverage the physical footprint on which they're built to build a fully modernized, software-enabled platform that allows our customers to architect and assemble hybrid infrastructure where they need it, when they need it, from a rich ecosystem of partners. That is going to require us to build and extend our capabilities in various ways.
This sort of vertical text here, labeled as ecosystem enablement, represents a substantial investment on our part to continue to make the ability make it easier for other technology providers, ecosystem partners, to bring their value to Platform Equinix faster and easier to solve customer problems. The vast majority of the time, the customer solves its problem by combining our value with other technology partners, and we need to continue to reduce the friction required to make that possible. On the left-hand side, you know, sort of the other side of the two-sided marketplace, continue to increase our ability to reach a broader set of customers, a broader set of personas, and give them the customer experience that they want.
That includes a traditional enterprise selling motion, as well as channel and other go-to-market digital go-to-markets, including product-led growth. Underneath that, we're going to continue to invest in and prioritize the objectives and priorities that map to that platform vision. You've heard many of these already. We talked about our four Ps, really continue to ensure that the business performs, sustaining and building on our bookings momentum. Mike's going to talk about that. Driving operating leverage, which is unequivocally a priority for the business, maintaining a fortress balance sheet, which Keith is going to take us through, and not only delivering on, but expanding the scope of our xScale aspirations.
Pressing our advantage in the interconnected colo business, extending both the capacity and the reach to serve our customers. It's just really productizing our sustainability value proposition and tapping into a huge AI opportunity, which we'll talk more about. Enabling the capabilities that are going to allow this vision of the platform, starting with product-led growth and the ability for our customers to self-serve our value proposition, really investing in that platform enablement to allow customers to deliver their value on our platform, partners to deliver their value on our platform, and evolving the go-to-market, which, again, Mike is going to talk about in depth.
All of that done future, done people first, investing in the future of work, where, why, and how people work, investing in, you know, creating a culture where every person, every day, can say, "I'm safe, I belong, and I matter." The center, the centerpiece of our diversity, inclusion, and belonging efforts, and continuing to evolve our talent to ensure we have the best people to execute on the vision. I'm going to just touch on a few, a few of these, underlying pieces and then wrap and hand this off to Nicole and the team to talk a little bit more and start to get you a little bit of exposure to how our customers feel about all of this as well.
On the xScale side, when we were here, five years ago and laid out this early vision, it was not nearly this aggressive. We have found huge market opportunity. I think we really were the leader in, you know, taking an approach that has now been frequently mimicked or attempted to. I think we're in an incredible position to continue to expand our aspirations on xScale with 800+ MW of planned capacity on the horizon. By the way, this isn't wishes and dreams. This is 800 MW that are fully committed by some of the biggest balance sheets in the world.
The way we went about this is by attracting some of the most powerful players, the deepest pockets in private capital, these 800 MW are going to come to bear. They, by investing in xScale, we've been able to extend our relationship with hyperscalers, which now represent 550 MW sold across both our xScale and retail footprint. The retail business on the bottom there continues to grow, as we, have network nodes and other, elements of the architecture that continue to support the hyperscalers. We do some level of on-balance sheet, larger footprint, particularly for cloud on-ramps, you're seeing the dark blue bar continue to scale out, as xScale grows quickly.
Altogether, resulting in about a billion and a half, both on-balance sheet and off. We don't consolidate all of that revenue, but that's the extent of our relationship with the hyperscalers, which again, is growing at about 1.6 times the broader business. Extending our reach, I won't talk about this in depth. Jon Lin will probably cover some of this in the Q&A, I mean, in the panel session. You know, this is going to continue to be an area of focus for us.
We believe there's incremental expansion for opportunities for us in the ASEAN markets, in Africa, in the Middle East, in portions of LatAm, and we're going to take a hard look at whether, how, and when we might expand our aspirations in xScale in U.S., which I think is very relevant to the AI topic. Speaking of AI is a clear demand catalyst, and we think one that is really well aligned to the Equinix advantages. Proximity and control, we think, are going to increasingly shape buying decisions, and even more so as we move through what is probably a bit of a sort of a pig in the python relative to training requirements for AI. As we move to more inference, and the demand for inference, and deployments, it continues to accelerate.
Customers are really demanding proximity to a variety of data sources, to clouds, but more latency, more automation. I think our platform and the breadth of our platform, retail data centers, xScale data centers, digital services, and Fabric represent a powerful sort of value proposition for AI as an opportunity to scale the business. This, I think, is going to be a major driver in our next quarter century as we look ahead. With that, I'll finish where we always start, and that's with people. Artificial intelligence will continue to be fueled by human intelligence, we're going to continue to invest in our people.
We're going to continue to try to be the best, most compelling place for people to, you know, to pursue their own vision, their own aspirations, and do something that they believe is important. We're very proud of what we built there in terms of the magic of Equinix and a culture that is widely recognized as a place to attract, inspire, and develop the best talent in the world. With that, I'll wrap. I think I'm a little bit over my time. Sorry, guys. I think Equinix is uniquely positioned to capture an enormous opportunity ahead.
With that, I'm going to leave you with a video that, you know, it gives you a little insight at a personal level into how people think about the magic of Equinix that gives us this opportunity.
What I really love about Equinix is the people. Everybody carries the Equinix culture. My team certainly gets along really well, and I'm so glad to see everybody from all around the world. There is really this idea of put we before me, and I really haven't seen any other companies that really have that strong corporate culture like we do at Equinix.
Equinix has truly empowered me to help. You have the opportunity to make a difference. I didn't start out wanting to manage teams. Equinix presented me with the tools to be able to do that and to be better each day.
The culture at Equinix is so unique. It's inclusive, it's compassionate, and it's unlike any other company.
When I got my job offer from Equinix, I was so excited. It was a dream come true. I'm going to join a family, not a company. I became a part of Equinix family. Equinix gave me courage. Equinix gave me a confidence. That's the main reason that I'm sitting here.
Equinix makes a tremendous effort to develop a diverse team where everyone feels included, no matter how different we are from other, I think it's fantastic. The people for me, it's the most important thing. I want to be here!
I am Quincy Liao.
I'm Andrea Mallory.
I'm Ehsan Assadi.
I'm Nuria Yagüe, and I am.
And I-
And I'm-
I am Equinix.
Please welcome Chief Transformation Officer, Nicole Collins; Executive Vice President and General Manager, Digital Services, Scott Crenshaw; and Executive Vice President and General Manager, Data Center Services, Jon Lin.
All right. Well, hello, everyone. It's great to be here. Thank all of you for being here. My name is Nicole Collins. I'm the Chief Transformation Officer here at Equinix. I'm super excited to be joined by my friends and colleagues, Mr. Jon Lin, the leader of our data center services organization, and Mr. Scott Crenshaw, the leader of our digital services organization. We feel like for the next 30 or 4 minutes, what could be incredibly valuable for us to go a little bit deeper into the vision that Charles shared. To talk about our organizations and how we'll help drive scale, growth, and execution towards that vision. We'll also dive into some strategic topics around data placement, AI, and sustainability. With that, if you're ready and you two are ready, we'll dive in.
Let's do it.
All right. Jon, is hot off the plane from the HPE Discover conference, actually with HPE. Maybe we start there. How did it go? You were great on stage yesterday.
Yeah, no, thanks.
You were great, yeah.
It's, I mean, great energy and just super exciting to think about how we've been able to work with our partner ecosystem and just position ourselves with incredible brands.
Yeah.
You know, being on the main stage with AWS, VMware, HPE, and just talking about the future of hybrid cloud and the role that we can play in it to make it easier for customers and land all of that activity is just an incredible opportunity.
Yeah.
Super fun.
Well, great job, and it was, it was great to see the partnership on stage, right? Actually, Jon, I'll start with you because you talked a lot yesterday as well about just our competitive advantage, which is our physical footprint, our IBXs. I'd love for you to just go a little deeper, maybe for a few minutes, on, you know, what is firing you up about that strategy, and where do you see tremendous value in the future?
Yeah. I mean, when you think about our platform strategy as a whole, just building on the differentiation that we've built 25 years now in the market around our global reach, around the interconnection services that we provide that are unparalleled, that are out there. The ecosystem of customers and partners that we've been able to build and the curation that we've done around that customer base. The trust that we've built, both in terms of our operational reliability, but also our business model, also our business ethic. Like, how are we going to be performing there and being the neutral place for everyone to land? Also our entire focus around sustainability. When you start with that as the core, it's just an incredible mode to be able to build on top of.
We think about, all right, well, that's amazing.
Yeah.
It's an amazing business that we've built there. How do we layer on top of that? The data center portion of that is only part of the solution. We've heard that loud and clear from our customers. They're looking for easier ways to interact with us, easier ways to interact with our solutions there and consume that value. I think of that in two ways. It becomes really exciting because, one, there's obviously revenue growth opportunity inside of those buckets. Two, when you start building that relationship and integration into how the customer relationship and integration into how the customers are using us, it becomes stickier, right?
That's right.
Once you start building that and become entrenched into the workflows, it becomes a greater relationship, and the switching cost becomes higher.
Yes.
We know that. We've seen that. It's, you know, digital services is not new to us. We've been building this for a while now, and the track record that we've seen with Fabric and other service offerings, for customers that take both data center services and digital services, they spend 6 x more on the colocation and data center services with us than customers that are just taking data center services.
Yeah.
That gives you an idea of just how powerful that is for the portfolio.
Yeah, totally. We know that customers are looking for those new capabilities and ways of doing business, right? Scott, which leads me to you, right? When we think about digital services, what thoughts come to mind when you start to think about our customers' evolving IT needs and how we can meet those?
It's really, you know, profound changes happening in the market because customers are increasingly consuming their infrastructure in new ways. They want to consume infrastructure via software on demand. What we're doing with digital services is delivering the core value proposition of Equinix, the core differentiation of Platform Equinix, but we're doing so on demand-
Yeah.
-so they can consume it via software. As enterprises increasingly move to hybrid multi-cloud architectures as their standard for IT, they find that they need a place to have, host some of their workloads and data that aren't in the hyperscalers but are adjacent to the hyperscalers. That is the fundamental demand driver, that we're satisfying. They're asking us to deliver the value of Platform Equinix on demand as a service-
Yeah.
delivered via APIs and infrastructure as code. You know, as Charles said, the world of applications and data become more distributed, so they need to connect applications that are running in one cloud service provider to another, perhaps running in HPE GreenLake or Dell APEX, or to applications that are running inside an app, one of the colo facilities.
Yeah.
What we're doing with digital services is we're building an inventory of services that allow them to assemble solutions from our capabilities and our ecosystem partners' capabilities. I mean, fundamentally, with digital services, what we're doing is we're following our customers' evolution, and as their needs evolve, we're expanding our offering set to conform to those needs. You know, as we do so, our position as the trusted, neutral partner in this complex world becomes so much more important.
Yeah. No question, the acceleration of that hybrid cloud will mean we have to provide offerings that allow our customers to take better advantage of that opportunity, right? Which will be very critical for us. Maybe we click down there a little, Jon, when we say, like, data center services, what do we mean?
Yeah, it's... I mean, everything physical related with the business. You think about the real estate that we need to acquire, the construction work that we need to do, the data centers that we operate.
Yeah.
colocation services that we're offering our customers, our xScale portfolio, how we can leverage that, our supply chain work that we're doing every day to make sure we're staying in front of that, and our physical interconnection, making sure that we're as efficient and scalable and secure as possible to help these customers go ahead and drive and run their business and infrastructure together. Again, all through a lens of: How can we make sure we're doing right by the planet on a sustainable basis going forward?
Yeah, we're definitely going to come back to sustainability, right? Scott, our digital offerings, they build on the strength of that data center services foundation, right? Would you share some of the details around our digital offerings and more, and more.
Yeah. As Charles showed on one of his charts, the set of infrastructure services we're providing right now on demand as a service, accessible via software, includes our bare metals, compute service, Equinix Metal, software-defined interconnection, which is the Fabric, and via our ecosystem partners, storage. It's the basic collection of IT services that enterprises need. We make these accessible to our customers in the same way that they're used to consuming cloud services, and that's via software. It's a really good fit for many of our customers' high performant or highly cloud-connected workloads and data.
The other part of the family, so we have Metal, Fabric, and we have Network Edge, which is our virtual network functions as a service product. It's a way to
Yeah
network components that are available on demand, in a virtual rather than the physical format. If we look at Metal, for instance, what Metal allows customers to do is, consume a complete server that they don't have to share, and they can consume it as a service. Contrast this with cloud virtual machines. When you get a cloud virtual machine, you're sharing a server. By having the full capabilities of that server dedicated to you, not share with anyone else, you get to have control over it in ways that allow you to make it more performant and arguably more secure. One of our customers, the big telco company, Orange, is using Metal as the basis for their international next-generation network. They're delivering 5G, SD-WAN, CDN, and voice services-
They can around the world, and they can spin these up very rapidly because they can provision these servers almost instantly, on demand via software. That's in huge contrast to the need to buy and ship and configure and provision those physical servers around the world themselves. It allows them to respond to demand changes faster. It allows them to be more agile, and it just gives them a great deal of flexibility. As we've offered these services, our customers, well, they've responded very enthusiastically, and we've used that feedback to drive an expansion of our roadmap and expansion of our ecosystem capabilities. One great example of this is that earlier in the year, we announced a partnership with VMware to provide VMware Cloud on top of Equinix Metal.
This is a joint offering that will be an ideal home for many enterprises as they move their applications out of their own facilities, when they want to move them into a cloud-like environment, but with high performance or with, you know, very favorable economics. For these so-called lift and shift workloads, we think this is going to be a really big hit for a portion of the enterprise workload portfolio. You know, another example of this is our Network Edge offering, right?
Customers with Network Edge can set up points of presence around the world in minutes. That lets them accelerate their time to market with new offerings, address new markets quickly, have the flexibility to spin up and spin down capacity in new markets in a way that's just game-changing compared to what it was like when they had to do this with physical network equipment. One customer of ours, a major airline, is using Network Edge to rapidly spin up entry into new markets and save themselves months, sometimes quarters, in their pace at which they can respond to new demand. You know, fundamentally, we view digital services as an accelerant to our business.
It gives us the opportunity to expand our value to the customers, capture new workloads and data, and ultimately, capture more of our customers' wallet share. In doing so, we're exposing the core differentiation of Equinix to new users inside these customers and in new ways. We think that's really powerful and provides us with a lot of upside.
Yeah, absolutely. It's Physical and virtual isn't either/or anymore, right? It's both and/and.
Yeah.
I think something powerful that we also have, obviously, as an advantage is our interconnection strategy. I think it'd be good for both of you to chat about this for a second, but, you know, that across both sides is incredibly compelling. Jon, maybe I'll start with you, right? Just interconnection at its basic level, what is it, but also, why is it so important?
Yeah, I mean, we've been talking about interconnection for so long, for the folks that have been tracking our story, and just as our secret sauce, that probably isn't so secret anymore. The intent and focus behind what we do there is: How do we help our customers scale and drive their traffic in a private, secure, on-demand way? That started with the genesis of the company, helping the internet scale at large. By doing that, in thinking through with intent all along the way, what other use cases can we solve then with that capacity?
Yeah.
How can we be looking out there? I've had the benefit of being at Equinix now, like, 1four years, and every conversation that we have on far-reaching strategy ends up at some point with: Well, does it make more bits come to our sites? The answer is yes, like, let's invest behind that. Let's figure that out. And that's proven, like, incredibly powerful for us all along the path. You look at our investments in pursuit of subsea stations. You know, 5, 10 years ago, we were like: Why are we doing this? Like, well, it'll probably drive more bits back into our site.
Yeah
... the cloud on-ramps, our conversations on how can we pivot them from just using the internet to doing private interconnection, that's going to be a plus. Let's do that. You know, we drove that in ways that no other provider could help them envision because it didn't even exist as a solution in the market. That's really powerful.
Yeah.
Again, that position of trust we have, they know that at the end of the day, we're trying to help them find new ways to use us and expand their market opportunity across the board with all the providers, and that's why we have the track record we do with the service provider community. That's continued to grow and scale. I think, you know, our internet exchange is now delivering over 30 TB per second of capacity, and that's the public exchanges. We know private traffic is growing even faster than that. In our 2023 Global Interconnection Index report , we said, "Hey, it's over 35% CAGR of overall bandwidth, and the private side is growing 50% faster with 15 times the volume." That trajectory continues to accelerate.
Yeah, the scale is crazy that we're seeing, right? Exciting to think about that and how that will help our customers achieve their goals. Scott, I'd love your perspective on it as well. Where do you see significant value?
Well, I mean, as customers are building distributed applications, as they're using multi-cloud and hybrid cloud as their core infrastructure, by definition, that requires a great deal of connectivity.
Yeah
... between the clouds, among the clouds, with their ecosystems. For some of this, they can use the public internet, but they increasingly find that they need performance, they need reliability, and they need security, so they come to Equinix for that. With digital services, what we're doing is we're making the capabilities of that interconnection available in new ways, enabled via software and on demand. This is just sort of the core evolution of our offering set...
Yeah
The core value proposition of Equinix being exposed to more and more users and more and more applications than our customers.
Really, whether it's rack, stack, click, and configure, it's all about simplicity, right? Making sure that we give the optionality to our customers and our partners. Scott, I'll stay with you for a second, right? When you think about next step on market permission around digital services, and is it competitive with our cloud providers, I'd love to know your thoughts there.
Yeah. I mean, first of all, we have market permission to extend into digital services, no, it's not competitive with the hyperscalers. Quite the opposite. When you think about what we're doing with digital services, we are taking the core value proposition of Equinix and extending it to different use cases and different users. We're following the evolution of what our customers are asking for. It's an extension of the core capabilities, the core value pillars of Equinix: location and reach, interconnection, and ecosystem. You know, in some cases, the people consuming this are the folks inside our customers, the personas inside our customers, that we already have relationships with. In some cases, we actually have to forge new relationships and expose our capabilities to different people. They...
We're moving, you know, away from, you know, primary focus around people who run networks and network operations and infrastructure, and starting to talk to people who are application owners or line of business owners, or what we call the practitioner community. These are people who build applications or run applications or optimize applications or architect applications.
Yeah.
We're reaching these new people through both our full service motion, our traditional full service motion, but also through an emerging capability we call product-led growth. While our product-led growth initiatives are early, the results are really encouraging. When we say product-led growth, what we really mean is the ability to give a wonderful, easy self-service experience so that users can try, can learn about, try, evaluate, consume, and then grow their consumption of our on-demand offerings.
Yeah
... without intervention from us. It's, you know, it's, Although very early stages, the results are really encouraging. We have had, well, in the first quarter, I think we had 300% increase in traffic to our main PLG site, deploy.equinix.com. Would encourage everybody to go try it out. Buy a server. We value your revenue. You know, at the tail end of that pipeline, we're, we've seen over a 400% growth in the users who convert to 12-month server reservations. Again, early days, but very, very encouraging, and I think that is. That provides clear proof that we have market permission to extend into the on-demand, as-a-service world, and customers are quite enthusiastic about it. When we speak about hyperscalers, what we're doing is not competitive with hyperscalers.
It's a big compliment and enabler for them. We're accelerating enterprise cloud adoption by making digital transformation faster and more successful. We're not trying to change customers' minds about where their workloads or data should go.
Yep.
We're just giving them options so they can find the optimal place and make their transformation work. That's a win, win for our customers, for our partners like the hyperscalers, and also for Equinix. You know, and as we're doing so, we're seeing our ecosystem expand in new ways. I mean, I think one of the key examples of the hyperscaler support for this is the announcement we made on Monday with Google. Google has chosen our new capabilities as the basis for a lot of what they do in connecting their customers to other clouds. That's a really powerful relationship.
I think they're showing very clearly that they value us, and I think we'll, you know, we believe that, you know, the ecosystem that we are developing, the services we're providing with our hyperscalers, will continue to grow and deliver unique value for customers. We're also seeing the ecosystem develop in other ways, too. For example, there's a new emergent group of software vendors that are providing multi-cloud networking software, and these are virtual machines that make it easy for someone building an application in Google to find their application in AWS and connect them. They can do this over the public internet, but as they start to sell to enterprise customers, those customers increasingly want them to use Fabric because they want better performance, better security, better reliability.
In many cases, these vendors are building their solutions on top of Equinix Metal or on top of Network Edge. I'd throw HPE and also Dell into the mix, too. We're seeing an expansion in the depth and breadth of our portfolio of partners as we expand the depth and breadth of our portfolio of products. You know, fundamentally, what we're doing here is we're meeting customers where they want to be met. You know, customers have a wide portfolio of applications in different stages of the digital transformation journey, and in some cases, what they need is colo to help them with that, but in other cases, it's an on-demand digital service. You know, we're meeting the customers increasingly where they need to be met.
Where they need to be met.
That adds a lot of value.
I think it's a combination of where they need to be met and who they want to meet, knowing that it's not just those providers for today, but again, our commitment and what they've seen for us is we're always going to be talking to every technology provider that matters in the industry, and they're going to be available at Equinix. Every single one, like, full stop.
Yeah.
When you talk to an enterprise, and they're like, "Well, I have a requirement now, but we can help you future-proof that requirement and deployment for the next 5, 10, 15, however long your life cycle is of whatever your digital transformation is going to look like," they know that they can trust that those people will be at our sites.
That's right.
Yes.
Yeah. It's incredibly powerful, right? Scott Crenshaw, I know I speak on behalf of the whole team in thanking you for the leadership in this area since you've joined, right? Really appreciative of that. One thing you both brought up was scale and reach, right? I know the three of us are thinking about that a lot, right, when we look at that platform evolution and how we want to pace towards that. I think we should touch on that for a second. When you think about the scale and reach elements that our platform vision now offers customers, what excites you the most when you think about your respective areas? Jon Lin, maybe you want to jump in first?
Yeah. I mean, scale, first off, I love building stuff, and all credit to Ralph and our design and construction teams around the world. We've got 50 major projects around the world.
Yeah.
25 countries right now, which is incredible.
Incredible.
We're going to continue to deliver that. That is challenging. I think the environment is tough. We've talked about supply chain and how ahead of the curve we are there in making sure we're leaning in, about using xScale and using other people's money to be able to help deliver incremental capacity into the market, which is incredibly powerful. Being able to continue to drive the scale of the business in as we continue to see market trends and secular drivers on growth of data centers. Scale also means how can we keep making it easier for customers and easier for our employees? How do we drive additional operating leverage? How can we use automation and technology to reduce the amount of work and kind of-
That's right.
-chain for all of our customers, so that we can continue to offer our world-class customer support, but do it more efficiently and effectively in the years ahead? On the reach side, as Charles mentioned, you know, obviously 248 data centers in 71 metros in 32 countries, and we're not done. We've talked about our expansion opportunities and done recent announcements in ASEAN, and we are still not done. Jeremy's in the crowd here, and he's continuing to advocate, and our customers, more importantly, are advocating on, Hey, where are we going next?
Yeah.
Not just in ASEAN, but also in Middle East, in Africa, in the rest of Latin America. You'll continue to hear us, again, be customer-led on that demand. Digital transformation is continuing to accelerate around the world, and that just creates opportunities for us to go ahead and deliver there.
Yeah. Scott, how about you?
Well, I mean, when we think about our on-demand services, you know, we're enabling customers to rapidly scale up, rapidly expand. As we think about the need for cloud adjacency for workloads and data, we think that's a, you know, key dimension. Capturing even a portion of those workloads gives us the chance to scale substantially, really expand what we've been doing and provide a new level of flexibility and growth. I think that as we think about digital services, it's going to be a significant growth driver for us. We're pretty early in the investment curve here, but we're already seeing, you know, very encouraging, positive momentum here.
I think that, it's a high revenue opportunity, and, you know, as we grow scale, the unit economics are going to be, you know, likely be as attractive, maybe even more attractive than what we have in data center services. There's a real scale opportunity there.
Yeah.
When we think about reach, you know, what we're doing is we're targeting new personas and new use cases and new workloads and new data inside our customers. That just expands the value that we can provide to more and more people, more and more parts of the budget, the wallet that our existing customers have, and that's a wonderful expansion opportunity.
Yeah.
I know when we think about scale and reach, there's a lot of implications for how the company adapts to capitalize on this opportunity and to do so with efficiency. That is the key focus of the transformation office.
Yeah.
-we built, Nicole. How do you think about it?
Yeah, I do wake up every day thinking about simplification and efficiency, right? We stood the team up over about a year ago, I guess now, and couldn't be more proud of the team we've built, and really, we did it on, you know, three big pillars. One was deliver efficiencies, two was fuel growth, and the third was really just the acceleration into this new platform vision, and how do we orchestrate and organize around that. I think there are critical areas that I put on my shoulders to own for the team, right? One is we've got to have a very healthy operating model internally, and how do we think about acting like a connective tissue across our functional areas, not just ours, but all of our other team members, right? Two is prioritization.
What becomes really important when it's easy to get distracted because there's so much going on, is keeping the most important stuff, the most important stuff, right? I think we've worked really hard as a team to lock on those priorities for the next 18, 24 months and really build execution plans around that. Lastly, Jon, you mentioned it, right? Focus on processors, processes, excuse me, and just customer experience, right? Making sure we keep customer centricity at the center of everything we do and decide, right? It should make it easier for customers and partners to do business with us. So, yeah.
Yeah.
It is a daily thought.
I would just give, like, a huge thanks to Nicole, you and the entire team. I think when you look at the impact that we're driving and the rate of change that has, you know, again, we accelerated quite a bit in the last year, just, you know, the connective tissue that your team provides on making sure that we're still orchestrating that well, not like stepping in or out of sync around all that alignment, helping us keep the pressure on, right? Keep the rate of change going is incredibly valuable.
Yeah. No, thank you, Jon.
Thank you for that.
Appreciate that. One team, one goal, right?
Yeah.
All right, with that, let's dive into some strategic topics that I know the audience is probably excited to hear from us on, right? Maybe we start with data. Charles talked a lot about it. It's at the center of everything right now. Data placement and workloads are becoming more critical decisions for our customers to make. Scott, I know you're thinking about this a lot, right? I'd love to start with you on just, you know, what's top of mind for you, what do you think is top of mind for customers, and share some of that with the team today.
Yeah, sure. Maybe two thoughts here. I mean, the first is that as customers move to cloud, they're discovering that workload and data placement really matter. Because what happens is they run into, surprises with respect to cost, with respect to performance, respect to reliability. I mean, cloud transformations can go very, very well. You know, best practice is typically you rearchitect, a portion, but a small portion of your enterprise workloads to be cloud native. And, and that generally yields really good advantages as they move to cloud. For, but that rearchitecture, it's expensive, it takes time, incurs some risk, and so another part of best practice, you typically don't rearchitect your whole portfolio, you rearchitect a small portion, and you do what's called lift and shifting.
You move workloads from on-prem into a cloud, using a virtual machine and relatively few changes to the application. That's a big area where these surprises happen. What we're discovering is that our enterprise customers are finding that they need for some portion of that workload portfolio, they need a place that's not in a hyperscaler for the application, but adjacent to the hyperscaler...
Mm-hmm.
for the application.
Yeah.
That can give them the economics they need, the performance reliability that they need. That's a big area of interest and opportunity. It's one of the drivers for that relationship with VMware. You know, another area of real interest is that customers are getting much more sophisticated about where data needs to be located, because if you have data that needs to be shared between different clouds or between clouds and other SaaS applications or with your colo or your on-prem apps. It can be very expensive, and you can also incur significant performance concerns and sometimes data sovereignty concerns if you're not careful about your data placement. We're seeing a lot of interest and demand for cloud-adjacent data placement.
By storing it in Equinix, either in colo or in our digital services offerings, customers can get many of the advantages of cloud, but with the neutrality and the ability to be very close in terms of latency to all of the third parties they need to share that data or use that data with. That's becoming, you know, an increasing driver for our growth.
Yeah. Jon, how about you?
Right. It's, and when you think about, for years now, we've been talking about, hey, the right workload or the right use case and the right location, and now it's also, and which platform do we want that running on, right? How do we help support our customer? Is it cloud? Is it, you know, is it colo? Is it something in between? Is it a digital service? Now we've got a full solution that we can talk to the customer about and meet them wherever they are in kind of that transition or technology transformation path, or candidly, on the buying journey, right?
Yeah.
We can engage right there whenever they need that. Those workloads can be different. Again, I think the work that Mike and the team have done on our sales transformation, educating, being able to be conversant in those discussions has been incredible and, again, a huge differentiator for us as we're talking with the enterprise. I think the other part that we're seeing on the workload, in addition to location now on kind of site proximity, on latency being in kind of, again, which metro do you want to be in based off of your end user. Also what we're seeing is these workloads need to come out of their enterprise data centers, because enterprise data centers are just hard, right?
I think the sustainability requirements that are driving the needs for all organizations, along with the technology advancements that are happening, the kind of densities that are increasing, the efficiencies that can be driven by going into a purpose-built, scaled facility such as ourselves, is huge. Being able to be the easy button then for a sustainable solution, saying like: Hey, you want your workload to actually be sustainable, we'll put it in Equinix, and here are the varieties of op-opportunities-
Right.
-to put that on in Equinix is immense.
Yeah. Still very much related to data is the topic of AI, right? Which is top of mind for everyone, the next era of technology. I know we're thinking about it daily. I know all of you are thinking about it daily.
Did you see all the laptops come out?
Exactly. Everyone getting ready.
AI came up.
We always, if we had ChatGPT in college, right? Life would have been so much easier. My niece and nephew have it made right now, right? I mean, Jon, this sits direct at the heart of your world right now. Would love for you to share some of your energy and excitement around this new technology with the team here.
Yeah, no, I mean, I think it's, obviously, the conversation and craze over the last, like, three months has been intense and amazing.
Yeah.
This is one of those areas where, again, we've been practicing and exploring and talking about this for years now with our customers. You know, in the previous analyst day, that was two years ago now, Jensen was with us talking about delivering and launching NVIDIA AI LaunchPad as a service at Equinix. So we've been on the forefront of these discussions, finding out where customers need this, how they can apply this, and actually deploy this around with Equinix and kind of across our footprint. You know, there's two different sets there, as we talked about.
I think both the training models, that need to happen there, and that training use case ends up being not particularly latency sensitive, but incredibly like data sensitive about the amount and quantity that needs to be loaded in there and increasingly needs to be secure. I think there's a lot of concerns about data leakage. You've seen that on the early days of ChatGPT around, hey, how is the enterprise going to handle that? How do we make sure that that data actually stays private and resident within a training model that can be controlled by the enterprise? A huge opportunity for us as we think about that as just another private cloud to some degree.
Once that training is done and the model is created, well, that model is only delivering value if it's being provided to the user as quickly as possible.
That's right.
You know, if you're doing ChatGPT, and it ends up taking 30 seconds to be able to generate that result or 100 milliseconds, well, that doesn't feel conversational. That doesn't feel like.
Yeah
an actual person having that talk with you. Being as close to the edge as possible, whether that's for end user purposes or closer towards the manufacturing floor or whatever the use case can be, that's why we have our footprint there. We've got a great solution for both. You know, those workloads on the training side can be large. I think for the enterprise, they're not, you know, hundreds of MW or tens of MW, even. They're MW, which we can go ahead and house in our facilities. On the inference side, those are footprints that actually fit extremely well within our retail footprint.
Yeah
... and inclusive of our Metal footprint, right? We've had A100 GPUs deployed on Metal for a year plus now. We can help support some of these workloads as they're coming. Again, we're certainly seeing a lot of interest and activity around that space, but I do think it's still early days.
Yeah.
I do think a lot of the work that our enterprises have been doing and using around machine learning and AI is going to get more investment in the near term and be able to create more business outcomes as everyone thinks about, well, how do I use generative AI in a different way, which maybe end up being the next wave of growth, as Charles said, for probably the next quarter century for us?
That's right. Yeah, Charles also mentioned our xScale strategy could really play a significant role here, potentially, right? You want to share some-.
Yeah.
-more?
I mean, when you look at really generation of large language models and, you know, kind of the size and scale that that ends up needing to be deployed against, it is the east-west traffic, kind of the inter-node traffic ends up being extremely important. They need huge amounts of cluster density-
Yeah
... in those use cases. Probably the number of providers that will be able to actually build that and afford to have that level of scale are the hyperscalers that are already our customers, that are used to deploying with us in our xScale facilities. We've been thinking very closely and working with them around, Well, what does that mean in terms of the design that we need to support for them? The densities for them could be higher around this. Kind of the scale of this from a campus perspective could be larger. How do we make sure we do that? xScale is an incredible tool for us there.
I mean, it's gonna be, it's gonna be fun to watch and be right at the center of all of this, right? So more great things to come, I'm sure. We've got a few minutes left, but I want to go back and touch on sustainability for a few minutes, right? I know this is very front and center for us as a team. I know it's critical to all the companies around the world right now. Jon, you and Keith's organization are really leading the charge here on our sustainability strategy. I know as leaders, we're all very proud of the progress we've already made and the progress we're going to make, right, in the near future. So it'd probably be great for you to share some updates with the team today.
Yeah, I mean, sustainability it's been such a driver for us for such a long period of time that, you know, we were talking about it before it became a trend, before it became a requirement. You know, that gave us a head start, candidly, about, one, organizing and thinking through what does it really mean? How should we be approaching this?
Yeah.
How do we make sure what we're doing is real, right? I think that say-do ratio, as Charles mentioned, is like so front and center around that, because, you know, customers can tell what greenwashing looks like, right? The market can tell what greenwashing looks like.
Yeah.
It's been incredibly important for us to say, when we're making statements, when we're actually setting targets, when we're doing projects, these are very real, like, attestable items that we can deliver. That's important for our customers now. Increasingly, the reporting requirements that they're thinking about...
Yeah.
around their sustainability requirements are very challenging. Again, we can become an easy button for them that's not like hand waving, not estimates, like this is actually what your footprint looks like. This is how we're supporting it. This is how we're delivering that. So that's incredibly important for our customers. You know, the investment that we've been making in engagement with not just our customers, our technology providers, our supply chain, but also with the regulatory bodies.
Yeah.
being front and center there, working even with, in some cases, our competitors, to band together to think about what the future of our industry needs to look like is just incredibly powerful. We're very proud of leading in that regard. We've made statements about, you know, how we're thinking about moving our standards on our SLAs for environmentals and actually changing that to deliver a more sustainable future. Those are the areas. It's not just about what you're building, it's what you're operating. How can we make that more efficient every single day?
That's right.
Deliver that for our customers. More to come there. It's, you know, a huge area of investment, focus, and pride for all of us.
Totally.
What we're doing every day.
I mean, it's truly powerful. I think you say it well, right? The word pride comes to mind as leaders and just as humans, right, to know that we're part of something that's gonna hopefully leave the planet in a better place than where we found it, right? Listen, we're at time. I wanna thank both of you for being up here and sharing those perspectives with the team, right? We want to thank all of you, right? We recognize that you took time out of your day to come here and be part of our team for the day, and that really fuels us and drives us to continue to accelerate and move towards the platform vision that Charles shared today. A few quick logistics. We're actually gonna break for lunch.
There are kiosks downstairs where we have even more team members and leaders here, to chat with you and answer any further questions. We'll meet back in here at 1:00 for the continuation of Analyst Day and hear from Mike Campbell, Tara, and customers, and also from Charles and Keith, and wrap with an executive Q&A. All right. Thank you very much, team. Enjoy lunch.
Welcome back to Equinix Analyst Day 2023. Our programming will begin in one minute.
Equinix makes it easier for Wasabi to deliver our value as an object storage service provider. We can't deliver object storage without robust data center services in the right location, configured the way we want for us to be able to expand very rapidly. It actually helps us add additional ingredients to our solution. The fact that Equinix has global connectivity and the other digital services like compute, gives us an opportunity to really present more of a complete solution to our customers.
Equinix is one of the world's leading data infrastructure companies and is a real trusted partner by so many businesses. Part of our vision at OQC of putting quantum into the hands of humanity, means that we need to provide people access. To provide people access to this technology, I couldn't think of a better partner than Equinix. A quantum computer isn't just a smaller, better, faster computer. It represents a paradigm shift in terms of technology and processing. It really is the next generation of compute. This will enable Equinix's customers to set the pace for innovation and to make sure that they get first-mover advantage.
An airline is incredibly complex. We have many external partners, whether it's governments, where we have to communicate passenger info, flight information. Of course, we deal with passengers in 100+ countries, 180 airports. Keeping all of that running requires critical IT infrastructure that is just expected to work. What we call our digital backbone, Equinix, is a big piece of that effort to make sure that we have the proper connectivity, the proper access to any cloud provider we want, and we find more and more partners are meeting us in Equinix locations, which, of course, is easier for us, it's more secure for us, and frankly, we're quicker to market by doing that.
Please welcome President of the Americas, Tara Risser.
Thank you, everyone. Thank you. This morning you heard from Charles about our platform vision. You heard from Jon, Scott, and Nicole about the various ways that you can leverage Platform Equinix. I have the distinct honor and pleasure of really being here to talk about how it all comes together, to talk about our purpose, our customers. If you ask our customers and you think of the words they might say, they may say critical, infrastructure, digital. Yep, we all know that. You heard up there in that video that our customers are also talking about other words, really prominent words, actually: enable, access, innovation, easier, quicker. You heard vision, of course, you heard partner. Equinix is really a true partner.
We work to understand our customers' challenges, and we make sure that we can provide a platform to deliver on the promises that they've made to their own customers. That's what this is really about. It's why we're purpose-built to solve for any workload anywhere in the world and achieve at software speed. We thoughtfully selected a diverse group of customers to bring here today to really show you that global reach, interconnection, ecosystems, trust, and sustainability are fundamental in why they partner with us. That's really regardless of the industry, and I hope that really comes through today. To that end, we are pleased to host one of the top scaling service providers, a large and critical enterprise customer, and a trillion-dollar innovation customer. Really very exciting attendees here today.
We are so thankful for the time that they're willing to spend with us, and each of whom has been partnering with us for a number of years.... Today I'll be chatting with Misha Kuperman, Senior Vice President of Cloud Operations and Ecosystems at Zscaler, Lou Modano, Senior Vice President, Chief Information Security Officer, and Global Head of Corporate IT at Nasdaq. He's very busy. Matt Hull, VP of Global AI Platform Solutions at NVIDIA. First up, as the world's largest inline cloud security platform, Zscaler protects thousands of customers from cyberattacks and data loss. Without further ado, I'd love to welcome Misha Kuperman. Misha, come on up to the stage. Thank you, Misha.
Thank you.
Hey, I'm so excited to have you here. I know the audience is excited, we really appreciate you taking the time out. You are very familiar with Equinix.
Yeah.
have a long history with us, and so we were really hoping you could tell us a little bit about your background and what you've done with Equinix over the years. Let's start with that.
Yeah. I've been a customer for over 20 years, I think, right around there. I know you guys have your birthday coming up.
Yeah.
Um, your-
Are you sure it wasn't 2025? Okay.
I wish, although that would make me older. For the entirety of that 20 years, it was really around, you know, building global infrastructure for service providers, such as content delivery networks and, you know, now the last seven years, I think, basically building the world's largest cloud security company that supports over 50 million users and their workloads for the largest organizations. In fact, I think Equinix has almost the same, Global 2000 penetration as we do, so that, is really interesting.
Wow! Well, it's incredible, and thank you for your long partnership. We would like to continue it for the next 20. I mean, you know, if you want to keep going with us, we'd love it. We talk about Zscaler as a scaled service provider, and there's a lot more to know about what Zscaler does and what you provide your customers, and also what role Equinix plays in that. Do you mind just sharing a little bit about that?
Yeah. As I said before, we're the largest cloud security company. We're distributed in over 150 markets, you know, hundreds, if not thousands, of buildings. Really, if you look at our gross margins, they're very good and very important to us. Equinix really helps us operate at scale, in any market. It helps my team maintain sanity and consistency in how we procure data center and how we actually operate data centers, 'cause many people don't think beyond the sales order, right? The sales order is the easy part. Keeping that thing up and running and supporting, you know, the largest enterprises is really the challenge. More importantly, we also connect... You know, nobody wants to go to Zscaler. People go through us to get somewhere.
Our customers' workloads, our customers' employees are trying to get to places that are, for the most part, all present inside of Equinix facilities, so I don't have to, you know, try to run fiber across metropolitan area networks. I don't have to buy waves. I'm getting a little geeky here, but effectively, I can basically procure data center space almost anywhere and be connected to the things and places I need to be connected to.
Yeah. Well, we love your geekiness. Keep it going. It's okay. We know that Ralph here is in the front row and smiling when you were talking about the criticality of operations and not just getting the deal in the door. We can certainly appreciate that. You mentioned the number of markets that Zscaler is in around the globe. Could you talk a little more about that? I think you said 150.
Yeah.
We've got a ways to go. We can continue to grow our market position in order to keep up with you. Talk a little bit about how you kind of set up your markets around the globe and how we play into that?
Yeah, there's, you know, say 2 major areas. 1 is existing, and 1 is emerging. I'll talk about the emerging 1 in a second. The existing 1 is really, you know, we go to where the people are. We go to where the growth is. A lot of multinational enterprises, a lot of governments, a lot of educational systems, they're located in places where Equinix exists. This is, you know, how we leverage Equinix, is when we want to enter a market, if Equinix is there, it makes life a lot easier. You know, 1 thing I always tell my account team is: You guys aren't the cheapest, but you bring good value, right? It's not just about the dollar, but really about what happens after, just like with sales orders.
Then the emerging area, really, I'm really excited about the partnership that Zscaler and Equinix have. You know, we're leveraging some of the Metal offerings. We're leveraging Network Edge, and the reason that this is really interesting is because a lot of our customers are in Equinix. Again, as you think about Zscaler, you know, we started with securing the employees of these large enterprises and then eventually turned into securing workloads and machines and things that communicate with other things, and all of that generally is... Equinix is the heart of that. We see a lot of synergy in being able to run workloads in basically things like Metal and other places because they're close and approximate to our customers.
We can offer more aggressive SLAs, for example, and just good performance that you can't offer anywhere else, frankly.
Yeah. Yeah. I... Well, I appreciate continued geekiness there. We are, we've been really working with you on the digital services side, and I know that you are really looking at other ways that our global platform helps Zscaler. Do you want to expand a little bit more on kind of the digital service aspect of things? I know you briefly touched on metal.
Yeah. I mean, again, I would say, without getting too geeky, it's back to the workloads and also the special use cases. I mean, I'm sure you guys see where Amazon offers Outpost, and, you know, there's Azure on-prem and GCP. This hybrid world is here to stay, especially in the regulated and the government fronts, like people still need to have specialized workloads or what we call crown jewel workloads that are not destined for the cloud for whatever reason. There's some talk about repatriation of some of these workloads into basically data centers or having the redundancy. This is the area, I think, where the most, you know, cooperation around these digital digital services will be with Zscaler and Equinix.
Awesome. I know that last week, actually, there was some excitement around how Zscaler is actually partnering with Equinix, and we actually have Justin, who was on stage at last week at your Zenith Live event. Would you tell us a little bit more about what we're doing together?
Yeah. I think I've been plugging the partnership pretty hard here. You know, again, this is really around the existing demand that we see from our customers. Zscaler, many people don't know about this, but we run a certain percentage of our workloads as private workloads. That's this has been historically true. Again, if you think about government, federal, highly regulated industry, it's not, you know, it's not a monolithic, like, people have a vision to go to the cloud, but it's not monolithic. Like, yes, 95% of your workload go, but 5% stay. The partnership is really about providing and reducing friction for customers to go on their cloud journey, but also secure the workloads that have to stay in the data center.
What our customers tell us is that, "Look, we want you to do this as a service," right? Ultimately deploying private infrastructure, while we can do that for our customers, it's not our forte. We're a cloud provider, you know, we're security cloud. Partnering with Equinix really makes sense because we can now cover the entire enterprise, especially if there happened to be a joint customer, and there's a lot of overlap.
Yeah, you actually referenced that your customers want everything easier. They want to make it streamlined, and they want you all to deliver that. How do we partner together specifically on that ease of doing business? Do you see things that Equinix is doing that helps make your lives easier on the Zscaler side, so you can deliver that experience through to your customers?
Yeah, you know, right now I'm speaking as an operator, right? I'm a consumer of the service, and I can tell you, I can have a leaner team. It's much more consistent, experience, you know, under the brand. You know, there are other players out there that have a brand, but the experience underneath is still, you know, you're dealing with unique properties, and at our scale, it's very hard. I don't want to have to go to a different portal to place an order or to file a ticket. The consistency of smart hands is very important. And frankly, also dealing with issues, right? As an operations person, you know, I love it when my phone doesn't ring or when things are quiet, but, you know, we do something like 300 billion transactions per day.
There's rarely a day when something doesn't go wrong. Having a trusted partner that we can call and we know we can resolve the issues is really critical, and that's a big value that Equinix brings to Zscaler.
Yeah. Wow, 300 billion transactions a day. That's like a hard number to even fathom. Well, Misha, thank you so much. We appreciate you being part of this. We're going to bring out our next guest. Next up, we actually have a large enterprise customer that you all will be very familiar with, probably in this room. A leading global technology company, Nasdaq delivers a world-leading platform that improves liquidity, transparency, and integrity of the global economy. You know, it's just a small importance there. I'd like to welcome to the stage, Lou Modano. Thanks for being here, Lou. Come on out. I love it. Nice. Thank you. Thank you so much for joining us.
Good morning.
It's so great to have you here today.
I have to stop you for a second.
Yeah, do it.
So, uh-
I like it.
I mentioned to a few of you. Most of you have probably had this experience, right, in your careers when you're asked to participate on a panel discussion or invited to an event. When my account rep, who I think he's in the audience, Bob O'Connell, asked me, my immediate reaction was absolutely. I think most of you may have heard, we just announced a recent acquisition of ours. That was going on in the background. I was excited to be able to be here, but at the same time, I told Bob, "Bob, I have to check just to be sure." I just want to be very clear, I'm really excited to be here.
Yeah
is a great event, so thank you for-
Well.
for having me.
Exciting announcement also that just happened. We appreciate you taking the time and coming and joining us in the midst of, you know, anytime that there's an acquisition going on, we know how crazy it can get. As you saw earlier, we've gone through a number of those ourselves. We completely understand and really appreciate the fact that you're here. Maybe share a little bit about, you know, what doing business with Equinix, like, how is it that you've had such a long relationship with us? Why?
My relationship actually precedes my time at Nasdaq, but it's been about, I would say, about 1five years or so. Like every relationship that anyone has, there are certain ingredients that make it work, and then there are certain ingredients that make it work really well, right? The way I look at our relationship is the hardest thing to earn isn't money, it's really about trust. That's also the easiest thing to lose when you talk about trust. For us, the reason we've been a customer for a long time, and continue to be, is the trust factor. I think that's something that I think resonates with most of your clients. They all know they can trust Equinix at any point.
Yeah.
Aside from trust, you gotta deliver. Performance has to be there, and the excellence in the performance has to be there. Then you have to innovate, right? When we look at our vision at Nasdaq, when we talk about being the trusted fabric of the world's financial systems, well, we need partners that think the same way. That's so important to us. Tara, when we try to differentiate our services, we really worry about our customers. The voice of the customer here is paramount. I think if you, as an analyst, any day spent with your, with the companies that you're focused on, when you get to hear from their customers, I think it's so important because it gives you the transparency, the insight into really what goes on.
It's not always about pricing. It's not always about footprint. In Equinix's case, it is footprint, by the way, 'cause we love that. It's global. It's all over. Everywhere we want to expand to, we leverage Equinix when we can. It's a lot of those factors that you have the trust, you have the client-centric, and then you have the technology from an innovation standpoint. You put all that together, that's what we expect from a relationship.
Yeah. Well, I love the first part around trust. I know that we've built that trust over the years, working with you and your team, and I think we've innovated together and grown together, frankly. To have, you know, partners here on this stage that have done that with us is incredibly meaningful. You know, obviously, Nasdaq has many critical assets and certainly data being a big piece of that. Can you share a little bit about how Equinix will really help you address, data and critical assets over the next decade? What are you thinking about?
Sure, sure. I think I talked about Nasdaq's vision, right? You look at how we do our own strategic planning. We entered into this 10-year renewal with Equinix, that was not an easy decision. As much as we have a great trust for Equinix, you really have to plot long-term needs, what enablers will be, will come into the marketplace? How do you maintain your leading positions as a global financial service organization? You have to put all those factors in the background. Then you look at our strategy as like, how do we continue to innovate? How do we modernize all markets, not just those of our own, so those of our customers? How do we help that? How do we help foster greater liquidity with the use of the infrastructure?
How do we expand on that? There's so many factors that come into play, and I think when we, when you think of Equinix from our standpoint, you think of: Where are your customers? Where do they live? Where do they exist, right? The match or the crossover in our entire client base, if you ask them, you don't have to hear this from me, you can ask them directly or your other clients, it's probably in an Equinix data center. When we think of Equinix, and you think of our journey, which we announced, to bring markets to the cloud, of which last year we completed our first options market, you think of what a better way to do that's secure, that's scalable, that's trusted, right? Trusted, again, a big factor here.
You take the best of what our premium and preferred cloud operator is, which is AWS, and then you match that with the strength and the global reach of an Equinix, and you tie that with Nasdaq on top of that, and you talk about a global powerhouse, a truly trusted fabric of the world's financial system.
Yeah. I mean, that's an exciting picture that you're painting, and I know you know, this acquisition is another proof point to the fact that you're continuing to innovate in this space. Obviously, meeting the needs of your clients is your number 1 focus, as is ours. What do you really think about the role that Nasdaq's going to be playing in this, like, cloud-enabled capital markets world?
I think, a lot of what I said, forgive me if I repeat myself. I'm big on repeating messages because I am a CISO, right? That comes with the territory. You have to tell people more.
At least seven times, right?
You can't do that. Why not? Flexibility is really key, and I think Misha made a couple of really strong points about workloads and the different considerations you have to have of workloads. When you look at the different workloads, you also have to consider, again, your clients. The majority of our clients sit within our Equinix facilities. Obviously, the on-ramp for anything that we do naturally in the cloud, and of course, there are government regulatory hurdles involved when you, when you take those steps. This was a long process for us from watching our market systems to the cloud. Naturally for us, because of the significant overlap in our customer base, it made sense to build an outpost within the Equinix data centers. We do have plans to have further expansion of that globally.
That's awesome.
Yeah.
do you want to talk a little bit more, actually, about how you kind of envision leveraging the combined capabilities of AWS and Equinix, and how you see that expanding into this, like, hybrid multi-cloud architecture?
Yeah. Yeah.
Even beyond what you have right now.
Sure. I mentioned AWS as a preferred cloud provider, but we do listen to our customers, and we do have engagements with Azure for portions of our environment. It really is about leveraging multiple cloud providers. It's not just about one. You have to be engaged with all of them, especially when you're listening to your clients. Given that Equinix is vendor agnostic, again, it helps to provide the perfect on-ramp for use of those services.
Yeah. Yeah. Well, we're excited to be the partner.
I noticed you brought out all the heavyweights.
I know.
Placed them right in front of me here.
They're all staring you down.
Is it-
Don't be intimidated. you can say anything you would like. you know, we talked about operations a little bit earlier, you know, operations is critical to your success.
A little bit.
-obviously.
Little bit.
Just the small importance there, uptime. Could you really just talk about, I guess, the level of reliability and how that is important to you, and how we have demonstrated and ensured kind of smooth operations, frankly, of Nasdaq's mission-critical systems and services?
Absolutely. I have a phrase that I like to use when I talk about. Again, a lot of the stuff I do on the security side is it doesn't meet the pillow test. Meaning, when I put my head on a pillow, do I go to sleep, or am I up at night worrying about things? When you ask me about the service levels that we get from Equinix, I always think of a service level agreement as sort of the minimum that someone should be performing.
Mm-hmm.
I will say, you know, again, very transparently, that, when I think of Equinix, you have always exceeded those service levels. That helps when the organization has so much else going on, like we all have going on in our own lives. You have so much stuff going on. I can't worry about that. Equinix has got it. I can't worry about that. Zscaler's got it.
Yeah.
etc.. By the way, Zscaler are also a customer and happy customer of Zscaler.
Yeah. well-
Misha had nothing to do with that comment.
Yeah.
By the way.
Well, we strive to ensure that you have a good night's rest every night. That... We'll make sure we get that out to our entire operations team, that's our goal, to make sure that you get a good night's sleep every night. How is Equinix maybe uniquely positioned? You know, you talked, you've talked a little bit about the criticality, and, you talked about what we've been doing together, but, like, how do you see us? What differentiates us, really?
I think, again, Equinix is the leading data center provider and more globally. I think that the affirmation of that is not in any marketing collateral that you all share. I think the proof of that is, again, in the, in the client base, and I'm talking purely from the financial industry, but I know that in other industries, there's a significant base of clients that leverage Equinix globally. I think that speaks for itself. The prominence of that, I think, and the evolution that Equinix has gone on, as you've added more and more to the base of services, sort of tells its own story, without having anyone here, as much as I'm sure you appreciate the corporate comm team, to share that story, it sort of tells the story on its own.
Yeah. Yeah. It's helpful when you've got a story that can tell itself, and it's even more helpful when you have customers who can tell our story.
Great.
Again, I'm so thankful that you're here, especially in light of everything that you've got going on at this point in time. Let's actually bring up our next guest. In case you've missed the abundant, and we mean abundant, media coverage, NVIDIA is a pioneer in accelerated computing and really the backbone of the AI industry right now. I'd like to welcome Matt Hull up to the stage from NVIDIA. Thank you. Hello, Matt.
Hello.
All right, I'm so excited to have you here.
Absolutely. It's a pleasure to be here.
Yeah. Well, it's wonderful to have you. I know that we've been working with NVIDIA for more than four years now, and we've even got a joint mark offering in the market already. You've been working with us prior to your time. There's a theme here that we're seeing at NVIDIA, so I see the theme of partnership. Charles earlier mentioned that AI represents a $21 billion TAM for Equinix. Just before we even dive into anything about Equinix, like, tell us what's happening. AI has been around for a while. We've got the source here himself of seeing this transition and experiencing it live. Why is it suddenly such a big deal?
...Yeah, it's been in the press a lot recently, hasn't it? My God! As you guys know, AI's been around since the 50s. If you remember 1960, Space Odyssey, 2001, Hal. If you think back to Deep Blue beating Garry Kasparov at chess, if you think to AlphaGo, Google's AlphaGo, beating the Go. The reality is that the premise of AI has existed for a long time. At its core, AI is about taking lots of data and processing it to outcomes. To do that, you need a lot of data, and you need a lot of processing power. What's happened over the past 5, 10 years, is we have achieved critical mass of data. Every time you open your refrigerator, you're generating data. Every time you get in your car, you're generating data.
We have more data than we've ever had. With the technology that NVIDIA has brought to bear, we now have processing power that was unheard of, unthought of, back in the 50s and 60s. You combine those two things with data science, with math, and AI is now becoming real. What happened in the past few months with the whole GPT thing was really a realization of what we knew at NVIDIA, what Equinix knew with our partnership, has been happening for many, many years. AI has been around in reality for the past 5 to 10 years. Companies are making massive gains with fraud detection, with customer service, with routing, supply chain. AI is real, and I think the ChatGPT thing really made people wake up and said, "Oh, my God, I got to take a look at this AI thing.
I got to get started. It's real. It's here. It's brought to bear because we have data, because we have very, very fast, high-powered computing, and we have the ability to coalesce it into business outcomes. We're really, really excited about where we've come with AI, and we're excited about the journey ahead. We're just at the tip of the iceberg.
Yeah. Yeah, I, you know, I think that it also just seems like it's brought it to the everyday person, ChatGPT. I think that it's now really embedded across the whole globe. I mean, my kids use it. Everyone's using it, right? It just puts it front and center and makes it so relevant. To your point, I think we've really been seeing this trend for already quite some time, and so I'm excited to have you here talking a little bit about this. AI acceleration, it's obviously a huge driver of compute, and this is a big impact for the data center space. How do you think AI is going to be supported? What does that look like? Where are you seeing, and where do you think it will be done?
Absolutely. AI is going to be done everywhere. AI is going to be public cloud to the device edge. It's going to be the robot that's performing surgery. It's going to be the car that's carrying our children and their self-driving capabilities. AI is going to be done in the public cloud, it's going to be done everywhere in between, which is why our relationship with Equinix could not be more important. Equinix has the breadth, they have the scope, then the interconnectivity. When we think about AI in the future, going back to the example of your kids getting into a self-driving car, milliseconds matter. You want the transfer time to be very, very fast. You want the interconnections to be robust, that's why we partnered with Equinix to make sure that we can bring AI to bear everywhere.
With that said, there will be density of AI. Charles said it earlier. He talked about interconnection being this gravity. We talk about data gravity. As I mentioned, data is being created. We have more data being created every year than we've had in the history of humankind. That data is going to have to live somewhere. Data center seems like a pretty good place for it to live. It's going to have to be computed somewhere. Seems like the compute and the data center is a pretty good place for that to happen. Regardless, if the compute and the storage and all the equipment is owned by a cloud provider in an Equinix data center, whether it's owned by an enterprise, whether it's managed by a third party, it's going to live in a data center.
We're really at the explosion of AI in the enterprise data centers, and it's a huge opportunity for both of us.
Well, it's a little scary to think about my children getting in self-driving cars. Although we've seen, I think, Paul Dehnert, one of our sales leaders, actually did a nice video of himself in a self-driving car. Very nerve-wracking to watch. But, yeah, it's coming, and it's real. What do you think about how Equinix specifically is positioned in this market to help capture this opportunity?
It's a great question. What we hear from customers, our mission at NVIDIA is to democratize artificial intelligence. We want every single enterprise out there to have their own AI capabilities. We don't want it to just be a few large folks that control the entire AI market. We want every enterprise to easily adopt AI. With that said, you guys have... What was the number? 41% of the Global 2000. You already have their data. You have them on your interconnection. You guys have interconnections like no other. You have more availability zones under sea. I mean, it's absolutely stunning, the breadth, scope that you have, plus the density of data. You guys are better positioned than any other provider out there to capitalize on the opportunity. We mentioned, it's about trust. It's about the relationship.
I'll tell you, our relationship with Equinix is multifaceted. We're a customer. You guys are a customer of ours. I think, somebody earlier, maybe Scott, talked about the fact that you have A100s running in your infrastructure. We're working with you guys on how to look at to deploy AI in your data centers. How do you take the data that's coming in data centers, heating, cooling, the video security? At its core, we're partners. If we can work together to democratize artificial intelligence, take it to that 41% of the global enterprise market and create really easy ways to deploy artificial intelligence, it's going to be a huge win for us. It's going to be a massive win for all the enterprise out there.
I mean, I really like the idea of democratizing the data and, you know, and the access to AI and those capabilities. You know, coming from Equinix, where we're focused on being a neutral place where the world can interconnect, like, this is a, I feel like, such a good fit here. Anything else about just how we're positioned differently? Do you see, you know, do you see something that we do that's very specifically unique?
Yeah. I think it stems back to the willingness to partner, right? Look at new things. How do we deploy our technology and metal? How do we do other things together? I think you'll see a lot between the two companies in the next couple of years as we look to innovate. It's that willingness and the creativity that attracts us. As Lew said, it was a no-brainer to be here today. As Misha said, he got a great plug-in for you guys. I get to get a plug-in for NVIDIA as well. At NVIDIA, we've been working very hard to bring together all of the infrastructure and the technology.
Mm-hmm.
-to do AI. If you look back five, six years, you mentioned AI, people didn't know where to begin. Now, we have entire AI infrastructure with the software stack. What we're missing is: Where do you put it? How do you run it? It's going to be a hybrid, multi-cloud world. Somebody mentioned earlier, Equinix is the heart, right? What we bring to bear, what Equinix brings to bear is perfectly complementary. Again, I think you'll see some big things from us in the next few years.
Yeah. We're, we're excited to continue to be creative and innovate with you. I know that it's some of our favorite things to do. Again, it goes back to: How are we going to find joint ways to serve our customers and make sure that we're, serving them in a way that really lifts us all up? I think all tides will rise. I... You know, changing subjects a little, I have a question around, how do you think about sustainability with AI? I mean, that's obviously, this is massive amounts of data. We are, we are, like the stat you said about we're creating more data, every year than we have in, like, all of history, is hard to comprehend.
It's certainly not going to be slowing down. How do you think about really creating a sustainable solution?
Yeah. I think there's two parts to that question. Number one is the compute that we're offering. If you look at what NVIDIA's been able to do, we picked up where Moore's Law left off. X86 has really leveled off. You can't get the performance. Now, with our new technology, when you deploy one GPU-enabled server, you can replace literally thousands of CPU servers. That means your compute is more dense, which puts stronger requirements on what's needed from the data center, which is another reason we love partnering with Equinix, but it also means you're removing a ton of wasted power, of wasted infrastructure that you didn't need. The GPU, at its core, is really helping us drive the reduction of power usage, the reduction of waste.
Then, on top of the partnership with Equinix, we know you guys are driving for a very, very green footprint. You guys are doing some extremely innovative things. I believe wholeheartedly with Charles' comments earlier, that every enterprise out there will take into account the sustainability and greenness as part of their selection of vendors and partners in the future. We're very cognizant of that. We want to be a great partner to the Earth and to our customers as well. That's a big part of the partnership with Equinix.
Yeah. Well, thank you. Thank you for sharing that. It's again, it's hard to comprehend how we're going to continue on this path, and we're thankful to have companies like NVIDIA out there that are really thinking about how we create a sustainable future, but continue to innovate and grow and bring technology to people around the world. You know, I guess one of the final questions for you all, we talk a lot about ecosystems. You've heard that throughout the day today, and obviously, they're incredibly important to us. We would love to hear a little bit about kind of each of your specific areas and what the ecosystems mean to you. Maybe we could start with Lou, if you want to just share a little bit about-
Sure.
-ecosystems and your perspective on the importance.
Yeah. Thank you. You had me at hello, by the way, on the AI discussion. I was like, "That was really cool, I'm all in." I don't think it's as easy as you portrayed it, though, because from a security standpoint.
I'll give you a call. I'll give you a call.
There's a lot of security things that need to be factored in. We are embracing it as well. Thank you for that. On the broader ecosystem question. Man, you're getting a lot out of us today, you know?
I know.
You're getting-
I love it.
Really.
I love it.
Again, we are, Nasdaq is at the center, of course, and as is Equinix, as Matt called out, of what we consider the financial ecosystem. The question is: What does that evolve to? How do we leverage AI going forward to do more? How do we leverage the likes of Zscaler to protect us? I talked about the trusted fabric, right? That's our vision. We're going to do everything that we can with our partners and the right partners to enable that. We want to ensure that whether it's ESG related or anti-financial crime related, because it's a very important product set that we offer as well, and fits when we talk about the trusted fabric, we need all those components. Cloud, we need the global reach that Equinix offers us.
You put all that together, I think that is what we consider part of the.
... main ingredients of our ecosystem and why we know, again, we know it will be successful.
Yeah. I mean, that's, you know, I think it's interesting just how you're going beyond just the financial ecosystems, right? You're pointing out that you're partners in AI and, you know, partners even on the cyber side. Maybe, moving over to Misha, hear a little bit about the security ecosystem and how you see that growing and evolving, and, how you think that Equinix maybe helps in this ecosystem play.
Yeah. You know, as a service provider, the first job is to deliver the service, right? It's really period, the end. It has to work. As a security cloud, we replace, you know, I like Matt's comment on, you know, replacing thousands of servers. We also replace thousands and thousands of appliances and the need to run them for our customers, and, you know, put them into our cloud, right, which a lot of it is in Equinix. What comes with that is the ecosystem and becoming one with our customer's environment.
You know, ESG is top of mind. With Equinix, for example, my team interacts with them on a fairly regular basis to collect all the data around ESG, and then we package that up and give it to our customers and say, "Hey, look, you're a 100% green here," right? Because we see all the transactions, because we see the entire ecosystem, we can basically tell them how much of their transactions are processed in the data center that basically is relying on green energy. You know, there's a lot to ecosystems. Actually, I don't know if you guys noticed, but I have ecosystem in my title, so compliance. A lot of these frameworks also, Equinix is a big partner in that because as a cloud provider, everything underneath is also in question, right?
Clouds are still physical. It's still somebody else's computer. If you can trust in the underlying environment, in the, you know, in the protocols and the sort of standard operating procedures globally, then customers can leverage it better. You re-remove the speed bumps and the friction of the adoption. That's what ecosystems, you know, ultimately means to Zscaler and to me.
I'll be sure to pass the memo on, that clouds actually are physical somewhere, to my parents next time I talk to them, who still are trying to understand the cloud. Yeah.
I would appreciate it.
... thank you. Thank you for for sharing that. I think that, you know, the sustainability lens of that is interesting, and the fact that the data continues to grow, that we've got to be passing on, all of us, be passing on to our own customers and making sure that they're aware of everything that we're doing and the improvements we're making is a really good point. Thank you so much for sharing that. Matt, what about anything else on your side on ecosystems? I know you've already spoken a little bit about it, but any other last thoughts here?
I think just to add on, I mentioned democratizing AI. It's really tough to democratize something if you don't have partners. Doing it all by yourself means you're not democratizing it. We pride ourselves on having a very robust partner ecosystem. Everything from open source software, to developer ecosystems, to partnerships with storage providers, to cable providers, to compute providers, to cloud providers, to data center providers, to energy providers, is the only way that you build a market. It's the only way that you open things up and democratize them. We're very, very keen on our partner communities. We have lots of them, as evidenced by me sitting here today. This is extremely important to us.
The ecosystem couldn't be more important, and the fact that Equinix is really looking at this in an ecosystem lens, looking at customers as partners as well, is extremely important to us. Very important.
Yeah. Well, you know, clearly, all three of you are leaders in your respective companies and also in your own industries. We honestly can't say thank you enough for taking the time to be here with us today. Together, we're going to continue to innovate and accelerate how we move through digital transformation, and we're going to be working on things we can't even imagine in years from now. I, you know, I was laughing earlier. I mean, six months from now, I bet we can't even believe some of the things that will be happening just at the pace that we're seeing, AI transform all of our businesses. I think you heard the word service provider, which ties very closely to what Charles mentioned earlier, that we're, you know, companies that are really transitioning to be service providers.
It's becoming more and more prevalent. I can see that all three of you on the stage, like, we've all got this service provider mentality and how we're going to be sure that we're supporting our customers and evolving to really be that true service provider. Thank you for that strong partnership. Fortunately, we will have some time this afternoon in our next break, so not right after this, but in just a little bit. A couple of the gentlemen here on the stage will be around, so if you do want to ask them additional questions, they have been gracious enough to be willing to talk to you.
Jon will.
Yeah. Minus Jon Lin. But yeah. I just can't thank you enough. Appreciate your business and appreciate the fact that you're willing to be here on the stage and work as our true partners. Thank you.
Thank you.
Thank you.
Hello, I am Antonio Neri, President, CEO of Hewlett Packard Enterprise. HP and Equinix are long-standing strategic partners, providing customers with trusted digital infrastructure and IT services. We share the belief that most customers will operate in a hybrid world to enhance savings, simplicity, security, and sustainability. A hybrid multi-cloud approach enable organizations to minimize economic and environmental costs, navigate changes in security and risk strategies, and adapt to the complexity of managing these environments. At HPE Discover early this week, we announced the availability of HPE GreenLake Preprovision at Platform Equinix, extending a cloud-like experience to anywhere in the world, from edge to cloud. By integrating our HPE GreenLake Cloud with Equinix software-defined network and infrastructure automation, customers will have the DevOps benefits they need, including dedicated control over security and data privacy.
It is all available in a fully managed, scalable private cloud at Equinix centers around the world. With a single pay-per-use HPE GreenLake experience, customers can now focus on creating business value instead of running a data center. HPE and Equinix are well positioned to provide a trusted, sustainable path to future-proof their businesses with an integrated solution to begin their business transformation today.
Please welcome Chief Sales Officer, Mike Campbell.
Well, hello. How are we doing, everybody?
Good.
Okay. Yeah. I feel like I just walked into one of Keith Taylor's finance meetings. Just a lot of excitement, a lot of energy, I tell you. It's kind of interesting because you actually learn a little bit about the management team. What I learned about from Charles and Keith is that they have their favorites. Earlier today, Charles gets to kick off. He's the CEO, he can do whatever he wants. Keith gets to wrap up, but then Nicole, Scott, and Jon say, "Hey, we want to go early in the morning while everybody's got energy." Tara says, "Hey, I want to go right after lunch." And then they're like, "There's only really one spot that nobody wants, and that's right before the break. Let's give it to Soup." I'm sorry, that's the my last name, the little play on thing.
Why not give it to him? Because he should be out selling anyways. I've got this bad spot, but I'm gonna share with you a little bit behind the scenes. You actually heard from some of our fantastic customers, which was great. Thank you very much, Matt, Lou, Misha, for being here and sharing your story. Because I'm lucky, as a sales officer, my job is to basically go out and meet with customers and prospects, learn where they are, where they're going, and how we might be able to help them get there. It's the best job in the world. You get to meet with exciting people that are doing exciting and innovative things.
They've actually already told you kind of a little bit about how we partner, why we partner with them, and what we do. Instead of repeating some of that, what I thought I'd give you is a little bit of the behind-the-scenes look at our go-to-market engine. Some of the reasons that we've been fortunate to have success over the last years has not all come by accident. I do believe it comes a little bit with luck, but the harder you work, the luckier you are, right? When I think about sharing that with you, it's to try to have you be able to try to understand there's actually science to what we do and how we do it. We're also now continuing to innovate and think about how do we even go to market different than what we used to do before.
This is what it's gonna take to really, fully recognize and take advantage of the opportunity that's in front of us. If you start to look at Charles, I'll bring you back to where Charles started today. There's a big opportunity out there. Okay, great. We know that. Actually, I look at that number sometimes and say, "It actually looks kind of too big. It's a little bit too broad." What can we do to actually focus my sales team so that they go after the right companies? Not just all of the companies, the ones that have the best chance to buy, the ones that we actually have the best chance to partner with and build solutions together so that they can be competitively at an advantage in their space.
This 650,000 is made up of established companies that have been around for hundreds of years, that are ready and willing to think about what they do today and where they can help me get there. How are we going to do that? We actually built a tool a couple of years ago that's based on artificial intelligence and machine learning. I don't know what the big hype is, Matt, I'm with you. We've been doing this for, like, six years. We built the program a long time ago. What it does is it actually takes 100,000 attributes that we then apply to these 650,000 companies. What we've looked at is all publicly available information, so it's not proprietary info.
It's these search tools that go out and find all the different things and areas and software and hardware that is publicly available that these companies have done. We then match those companies with other companies and say, "Well, if this is what this company has done, and this is how much they've bought, these are the kinds of things that they're able to start to do." Now what happens is our sales team knows who to go talk to. They do that. This STAR that we've called stands for Segmentation, Targeting, Activation, and then Reporting out on it. The Segmentation and the Targeting piece is saying, "Who are you going to go after?" Then, now it's like, how do we activate them?
What we do is, we actually take all that information that we've gotten, we put together what we call the Digital Strategy Briefing. We go out and meet with those customers, and we say, "Here's all the stuff that we've seen people in your industry doing. Here's the technologies that they're buying. Here's how they're implementing it. Here's some of the use cases that they're doing." Not tied to a certain company, but what the trends are, what's the market. Now those customers are saying to Equinix, "I'll actually take the meeting with you because you're going to bring me something that I can learn from and that I can get value from." They're targeting the right ones. When they're there, they're activating them by sharing the right information.
It allows us to then figure out, how do we become a part of your digital strategy moving forward? You can see this year alone, we've signed about 40% more of STAR customers and prospects. When we've signed them, here's what we know: They do more than 2x the number of interconnections that everyone else does. They deploy in more regions. They are important to us, they are important to each other, and they continue to build on what the platform is. That is, we use these tools to actually help our sales team be more productive. Let's just talk to you a little bit about this go-to-market engine that we're all so proud of.
You can see it's about 3,000 people strong. Of those 3,000, 2,000 people are meeting or interacting with customers every single day. That means 2,000 people are out learning more every day what customers need, what they want, and how we might be able to help them. It's exciting. I'm really proud to represent this group today to tell you this go-to-market engine is unmatched in the industry. Sales is only just a little cog in that wheel. As you can see, a bunch of my partners... You ever notice that?
I should just look at the slide down here, because in my head, I'm thinking, my wife says to me, "Hey, by the way, don't turn around and look at the slide because they're going to tell that you're balding." As I get ready to look, I'm thinking to myself: Hey, here's my wife telling me, "Don't turn around because they're going to tell you're balding." I'm going to look down at this slide every once in a while. As you look at that group, what you'll see, we meet every week together. The team is tight. All of the leaders, everybody who heads up a care group, our marketing team, the sales team, obviously, our business development, we are all working together to try to solve problems for customers.
When we do that, it comes up every day, "Well, what happened? What have you heard? What's new? What can we do?" That's why we are acting as one team, united in our go-to-market approach. The sellers are really important to me, obviously. When I look about that, one of the things that I'm really, really excited about is just in the last 7 months, we have hired over 100 new sellers that we've brought on to the family. That puts us a little bit over 700 quota-bearing heads out in the field. They partner with a lot of the folks up here to actually spend time with customers. We've got over 400 technical sellers. Salespeople are averaging about 11 years of industry experience. Our technical sellers have over 1five years of experience.
Again, when we go out and we're talking to customers and prospects, we're able to bring them insights and help them to be able to learn what other things are happening that can put them at a competitive advantage in their space. They're also joining us with real-world knowledge. A lot of these people that have joined recently have come from Amazon, Cisco, AT&T, VMware, name the list of companies that they've come from. They've all sold as a service before. They've sold networking. They understand cloud. They add that to the group of people that have already been here. You can see up here that our average tenure of somebody who's been with Equinix in the sales team is five and a half years. Gartner says that that's 2x, 2 times what the industry average is. When people come here, they stay here.
They want to be here. As I'm doing a bunch of interviews now for a lot of those other sellers, as they've still continued to come, they are telling me, I say: Why do you want to come? You're at this behemoth of a cloud company now, or whatever you happen to be at. Why would you come here? What is true in every single case is Equinix is special. You heard it even and saw it in the videos earlier. People understand that it's the perfect trifecta. We have great history, so you can look back, and you saw Charles's slide that talks about 20-plus years of revenue growth. You've got the opportunity that we mentioned.
There's lots of companies out there that have good history, there's lots of companies that have great opportunity, but then you also have people that you really like, that you enjoy working with, where you have fun with, and that are really good at their jobs. Equinix is where all three of those three can meet. I will tell you that this team knows and understands that they're at a truly differentiated and unique place. We never take it for granted. We actually spend every single day obsessed, trying to figure out how we can do better and how we can solve more customers' problems. The buyers and sellers out there are actually evolving, so we need to evolve with them. People want to buy differently than what they've bought before.
Many of my sales team is really focused on those large mid-market and above type companies that want to have somebody they can meet with and they can talk to about everything that they're doing. A lot of other people don't actually want to talk to sales. I've heard that before. Some of you are actually thinking, "I actually wouldn't want to talk to Mike either at the break." I understand that. Scott talked a little earlier about what we call PLG motion, so product-led growth. What we are hoping by that is they are marketing. Our marketing team is fantastic, and what they've done is created a machine that goes after people that we don't normally talk to in ways that they want to be talked to, in the tools that they have access to.
You can see up on the screen up there, these are tools I have no idea what they are. I don't need to because I'm not using them. The people who are, we are reaching, because that's how they want to be talked to. We target those different personas. Another thing I do love about it is brand-new group of people that we could be talking to every day. Teaches us more and more about the company. We now can spread out. We're not just in our traditional areas of talking to the C-suite or talking to the infrastructure or the IT buyers. Now we're talking to developers, we're talking to business unit leaders, all kinds of different things. These buyers want to buy in different ways, and they want to actually do things differently.
Back at the beginning of the pandemic, we had a situation where a very large food distributor, customer of ours, called and said, "I'm home. This is my new office. I'm in the U.S. I have to deploy and extend my infrastructure into London and Frankfurt. I can't travel there. How am I gonna do it?" They used our Fabric and our interconnection capabilities to send, compute, connections to Internet, etc.. They did it all sitting at home in a T-shirt. It was probably a University of Dayton T-shirt. I don't know what T-shirt that she had on, but it doesn't matter, because the person was in their T-shirt, and they got done what they needed to get done.
We've now seen that same quest for being able to do that happened in the pandemic, to now everybody's saying that's the way we want to. They just want to order that way. Just in 2023, we've seen 25% increase in people ordering off the portal. It's now become like 20% of our bookings every quarter come from people that self-serve. We don't even need to talk to them. The buyers want to buy differently. The sellers want to sell differently. We have been working with a lot of these channel partners out in the space before, the hardware providers, people like that. HPE, you heard the great announcement right before I came on from Antonio, their CEO, that announced basically being able to do it as a service, buying colocation as a bundled service.
This is the first time that something like that's happened. We have a few other partnerships that haven't been announced yet. Some have with VMware, but we have a few others up our sleeve that you'll hear about very soon, with a lot of these other companies that want to do the exact same thing. That is, the sellers are meeting with my sellers in the field, and they're saying: How can I still figure out a way to sell hardware? I need to do it as a service. They want some of the applications to be able to go to the public cloud, which is great. Some of them, they need to be holding in the on-premise. In that on-premise, let's put it right next to the same place where you're going to the clouds. Who can you do that with? Equinix.
We've already been kind of tight with the clouds. We saw them be able to bring more cloud adoption because of what Equinix and them could partner to do. The service providers are saying the same thing. They want our platform capabilities to be their service capabilities moving forward. To do it, we have to change. We can't just do it the way we used to do. We've got to be more automated. We've got to do things more cloud-like. I know most of you, if the ones that aren't dozing off or sitting there looking at your phone, getting ready to write up your research, hoping that Keith starts talking and Mike stops talking. I have to admit, I looked.
When it sounded like I was gonna do a demo, a couple of you looked up, hoping with a little chuckle in the back of your mind, like, this is gonna be kind of funny. The sales guy is up there getting ready to do a demo. We'll see whether it works. This is actually an example of how somebody can go and order a new server. You basically go in and say, "Where do you want to be based?" Amsterdam. Which server do I want to pick? What operating system? Of course, our team used a sloth, which is known for being slow, to say how fast it was. Now, that server is able to be connected in that amount of seconds that we just talked. You have now deployed a server on Equinix.
As you start to think about it, there are this huge opportunity. There's all kinds of new automation to do it. Can we attack it? Yes, we don't have to do it alone. We've never had to do it alone. We have channel partners to go to market with. When we first started our channel program years and years ago, we partnered up with referrals and agents. what those means are, those are basically, think of them as consultants. You can see some of the company names on there. These are trusted advisors to many companies out there, they say, "You know what? Who should we go with? Who's the best?
Why are they the best?" Some of them actually have them put together their RFPs, and then we respond to. We've got that market. We've had it. It's working, gonna keep working. We started to work with some of our network service providers and other service providers who said, "We want to bundle this together. Our solutions, actually, people are buying a little bit less of, but I've still got their commit together. How can I add services to my portfolio? I want to add Equinix services." We've partnered with a lot of these companies and many more to give that perspective of now it's a bundled solution. Now you can buy it from whoever you are, Verizon, Zenlayer, etc., but Equinix is just a part of that. Super excited about what that brings to us.
Now you also have the cloud and tech alliances. This is a massive opportunity for us and a very critical part of our channel program. Let me just start by saying one statement. I get asked this all the time: clouds is not a competitor to us. When we are on a sales call and someone says, "We want to go to the cloud," we smile because we can help them get there. It is not competition for us, it's actually opportunity. We partner with all of the large clouds and say they actually send leads to us to say, "This is somebody that we don't have a direct connection with. The easiest way for them to connect with us is through Equinix." We mentioned a little earlier about some of the hardware providers and OEM providers.
That's a massive opportunity for us as we continue to move forward. From the tech alliances perspective, they are wanting to do business with us. Lots of companies now are starting to get out of their own data centers. They can't move it all to the cloud, but they need to move it somewhere close to the cloud. It's gone away from that time when you used to say, "I need to hold on to all my data myself." It's actually, I don't need to be located in my own buildings anymore.
I actually need to be located where the data is. That's where they say, "I got to go do it with Equinix, because they are next to all the clouds and all the service providers." This has now grown to be about 35% of our bookings come from the relationships that we have with these partners. So far this year, 60% of the new logos that we've brought onto the platform have come about because of these relationships. Really excited about that. It's also not just the example of they bring good customers. They actually bring the right kinds of customers to us that actually make us proud. One example is, Precision Robotics. It's actually a partnership with NVIDIA.
They are out there using our network and our platform to be able to take pictures of all the different surgeries that are happening so that they can build robots to, in the future, be able to mimic that. We are using, working with them, NVIDIA, to actually make the world a better place. I'm super excited about what that means and how we can help the partnership to help us get there. Those partners actually help the platform, because what happens is, all the suppliers are here, all the providers are here, all the enterprises are here, and they're all talking to each other, and they say to each other, "You got to go do it in Equinix." Once you get to Equinix, we will be easier to work with. They are sending people to our platform.
If you think about it, this is publicly available, we've looked at a lot of people that consider themselves competition, that the closest one to us has hundreds of thousands less interconnections than what we have. There is no other place where you can connect to more people than Equinix. All of these companies are creating value together. That's why they want to be a part of the platform. Lots of companies out there can hire more salespeople. Lots of companies out there can add to their channel program. They can even try to innovate and build a faster sloth. They can't create an ecosystem of that magnitude, and they certainly can't do all four of them at the same time. We are the only one that has it all.
If I take you back to the very beginning, and we start to think about there's lots of things out there that we could try to learn about and try to sell, we've got the right experience sales team to go do it with the right partners, all part of the same one platform, working well together. Nobody can match that go-to-market engine. I have no idea what will happen in our world in the future. The only thing I know with a 100% certainty is that Equinix has built a go-to-market engine that has sustained over time and succeeded over time. Whatever the world throws at us, we're going to be able to handle it. Thank you for listening on that part in our go-to-market piece. This is the time you've been waiting for, which is a break.
We're going to be back here at 2. For those on the phone and on the live chat, we'll be back at 2:35 Eastern Time. Please take a break, and we'll come back with our finale of Keith and our executive Q&A at the end. Thank you very much.
Please enjoy this short break. We will resume our program at 2:35 Eastern.
Welcome back, Chief Financial Officer, Keith Taylor.
Wasn't that great so far? We've had four segments. You get a good sense of why somebody like me, that's been with the company for 25 years-
... for 25 years, is so enthusiastic, not about what we've done in the past, but where we're going in the future. It really was impressive. Also you can tell by my colleagues, just how much fun it is to actually be at this company. I do mean that. It is a lot of fun. Now, Mike, what was that thing that your wife was saying? What? I know. What a show-off, aren't I? Okay, anyway, I am delighted to be here, I think it's, you know, it's great. As I said before, it was five years since we stood up in front of you and two years since our last analyst day. I have a lot to talk about, a lot to tell you.
The first part of it really is, when you look at the track record of delivering, a lot of that's really about we're fundamentally different. We're fundamentally strong. When I think about expanding the market opportunity, it's because we have a differentiated market position. Managing through the complex and dynamic environment that we live in, is because we're investing in digital infrastructure, and we have teams that are in place to deal with the complexities, whether it's interest rates, currencies, power, supply chain. We have durable value. Sorry, we have a strong balance sheet that creates durable value. That balance sheet is not only strong today, and it's been strong for extended period of time, we want to position ourselves for tomorrow as well.
When I talk about the fundamentals of are strong, they've been strong 25 years, and there's no reason, based on what you heard from our customers, why they can't be strong for 25+ years. First thing, I want to tell you about bookings. Part of the reason I'm so optimistic about our bookings is that the demand environment is there. You hear me say it on a regular basis when we meet on our one-on-ones or what have you. All things digital belong inside Equinix. I believe that, I also believe, given the complexities that we have around the globe and all the challenges that we have in running this business that we have, I would suggest the plot, the supply environment is going to shift as well. Not everybody can do what we can do.
Particularly, Those, sorry, customers are willing to pay for an environment like ours, a high-quality, multi-tenanted data center, because we have something different to offer. As you can see by the slide here, between 2018 and 2023, you see that pardon me, our bookings are up roughly 80%. They're up roughly 80%. It tells you just the momentum in the business. Part of that's coming from channel for sure, and Mike highlighted that. We have a great channel business. But it's great to see that the customers are seeing something different in what Equinix has to offer. The price points, you hear me talk about this on a regular basis on the earnings call.
The price points, when we think about net positive pricing actions, that's really about when we think about price increases relative to price decreases. For as long as I can remember, we've been talking about positives. Doesn't mean prices don't go down. It just means as we negotiate in this world that we live in, the price points end up being a net positive. That should add roughly about 6% to our bookings this year. That does not include the PPIs. When you look at that, you go, "Wow!" Between that and just the growth, tens and hundreds of millions of dollars of value will get created over some period of time, certainly over the next five years. What's also interesting is churn. Bookings has increased roughly 80%.
Churn has gone down as a percent of our price-adjusted growth, our price-adjusted growth, by about 10% to the lower end of our guided range. It gives you a sense how phenomenal the business has performed relative to our initial expectations. We're at the lower end of the range. What we like to say at Equinix, nothing delivers revenues faster than simply eliminating churn. That is true. The fundamentals are also strong because our revenues are durable, and they're diverse. When you look at this chart, whether you think about regions, whether you think about industries, you think about currencies, our revenues are diverse, and they're durable. 95% of our revenues recur. They're predictable. On the far side of the chart, you look at that currency mix.
60% of our revenues come from non-U.S. sources, non-U.S. owner sources. One of the things I've said recently, we all feel this a little bit, the markets, the public markets, the macro conditions have been very difficult. Many people believe that the U.S. dollar is going to continue to weaken or weaken 5% to 15%. Again, some of you have heard this directly from me before, but if you have 60% of your revenues outside the U.S., and the U.S. dollar weakens 5%, that adds $250 million of revenue to our top line when that takes effect. Of course, if it's 15%, that's $750 million. Let me put it into EBITDA terms.
It's $125 million-$375 million of EBITDA as the US dollar weakens. That's $1.35-$4 per AFFO share that would increment. It gives you a sense that we have a diverse revenue base, but we also have a diverse set of operating environments that we live in. What's less predictable, of course, is our nonrecurring revenue, largely because of xScale fees and custom installation work. What's more predictable, of course, is our smart hands and our deferred installation. The purpose of this chart is really to just let you know that nonrecurring revenue will be roughly 5%-6% of our revenues on a go-forward basis. If you look at any given year, and you can tell year-over-year, it has some volatility to it.
We'll do our best to make sure that you're aware of what happens over the coming quarters. As I said, fundamentals are strong, and part of the way you see that is you look at the core operating metrics, and I have 4 right in front of you here. The first one on the far left really talks about our top 10 customers. You can see, as Charles alluded to earlier on, our Top 10, probably, I'm going too fast. Our top 10 customers are growing substantially with us. A lot of them, they're the hyperscalers and other significant companies. They're growing. You can see the size of that bar chart, but as a % of our total revenue, they're actually going down. It tells you, and by the way, we see that as goodness.
Yes, those large customers continue to grow and scale with us, but that long tail of customers are growing faster than the largest customers that we have. Then you look at the number of customers that are in multi-regions. Greater than 3/4 of our revenue comes from customers who operate in multi-regions. As a result of that, you look at our stabilized asset revenues and the MRR per cabinet. That has been going up again, exclusive of power price increases. That's exciting because that tells you that our customers, they appreciate the diversity that we have of our asset base, the diversity of our platform, the depth of our customer base, and they're also willing to pay a different price point for it. We've been able to grow that over the years. Sorry, customers.
It doesn't, It's not you guys. I can assure you, it's not you guys, but it gives you a sense of the momentum. Those are strong operating metrics. Oops. There we go. Our interconnection is strong. Our business is strong. As we continue to invest and grow the business, interconnection is only going to get stronger. It's more valuable. It's another point of differentiation for our business. You know that. You heard about it today. All the stories are true, and one of the things that we've seen as of late is our net cross-connect adds has been down a little bit, but we're looking at the gross aspect of it. The health of our interconnection franchise is very, very strong. Very, very strong. You heard Matt talk about earlier on from NVIDIA, just about all the opportunities with AI.
I'll spend a little bit of time on that. Suffice it to say, when you think about how customers are going to need to access their data, I only see interconnection continue to be a stronger aspect of our business. It is a point of differentiation, and in this chart, you can see on a global basis, we're by far the number one player, and certainly in every single region, we're a number one player. Again, interconnection is a point of differentiation, and we're number one in the world. How that represents itself, if you have strong interconnection, and as you go to new markets, and we connect them all together, you've already got a competitive advantage as you move to a new market, and more networks come with you.
When you have more metros and the networks are following you, the cloud on-ramp sit on top of that, and then, of course, the customers want to be there. Again, just it talks about the importance of our global platform and the diversity that we have. You've seen by some of the charts that put up, that have been put up by Charles, we talked about where we are today, but we're very ambitious on where we want to go tomorrow, this chart is something that we want to pay attention to on a go-forward basis. Let me tell you a story about Ashburn, and thankfully, I was there when it first started.
In fact, at the time, 100% of the employees flew out from California to D.C. 1, as we opened that data center, probably about 40 employees in total. D.C. 1 was a 21,000 sq ft facility. As you can see here, roughly 400 cabinets. Since then, as you all know, we've built another 15 or 14 data centers. We now have 15 today, and we're delivering roughly 100 MW or greater than 100 MW of IT load. An impressive increase. What is really interesting about D.C. is everybody followed us. That's Equinix in the middle. We are at the epicenter of the largest data center market in the world. As you can see here, 32,000 cabinets, 38,000 cross connects, 91% utilized.
All that surround as they're trying to access our ecosystems and get to SaaS. It tells you about how important Equinix is in the DC market, and we meet our capacity into that market. We're not trying to compete for those, that large wholesale business. We're very deliberate about what we do in Ashburn, and we have the price points and the profit consistent with our market position. When I think a little bit about the retail side of the business. By the way, when, if you think of Ashburn, think of the other major markets that exist around the world where we're trying to replicate that same exact portfolio. It is impressive, and it excites us, and that's why you continue to see us invest behind our own momentum.
Equally, we see a real opportunity in xScale. It was five years ago, we really talked about it in earnest. It was an idea, and Kroop, who's here with you, or with us today, he's had a very large impact on what we've accomplished here. Let me tell you about it. Part of it was making sure you believed, you understood, because the difference between when I start talking about our strength, our financial strength, part of the reason we have financial strength and we've had success in xScale, is we went, and we sought partners. GIC and PGIM have done a great job of partnering alongside us. What's impressive, since we started, we've deployed about $3 billion of capacity over those years. As you can see, we've built out right, roughly 19 data centers in 13 markets.
By the end of this year, the joint ventures, which we are part owner of and who also pay our fees, we'll do about $400 million of revenue. That's impressive. In such a short period of time. Now, $3 billion is nothing compared to the $10 billion or greater that we plan to spend. Nothing compared to $10 billion or greater. What I like about it is, again, we're using other people's capital to create that strategic value, that advantage that others can't get. They're not enjoying the profit structure that we have as a business. It will generate roughly 2% of revenues attributed to Equinix. Today, it's predominantly non-recurring fees. As we move over time, that non-recurring fee goes down, and the recurring fee goes up.
On a $10 billion business or thereabout, you can see it's roughly, it will be $200 million of revenue. What's really important is, over time, we see xScale, it will contribute 3%-5% of our AFFO. Think about it, if it's a, we're roughly a $40 AFFO stock in a few years, 5% of that is $2. Giving current trading multiples, $50 of value, and that value is not yet... We've not yet delivered it to you. That is what we intend to deliver. What's really important about xScale as well, it's not just- stock in a few years. 5% of that is $2. Giving current trading multiples, $50 of value, and that value is we've not yet delivered it to you. That is what we intend to deliver.
What's really important about xScale as well, it's not just catering to the hyperscalers. We have this great opportunity because this is part of what we offer to our customers, but we also offer a solution. On one end of the extreme, you have xScale, you've got the retail in the middle, and then on the far right, you have all the digital services. I see xScale not only as a provider for the hyperscale, I see them as also a potential seller to Equinix, a provider to Equinix. Again, it's using other people's capital, and again, a part of ours, to invest in markets where we wanted to put our capital somewhere else. Let's use xScale because we can create a economic advantage for ourselves.
Take it one step further, why can't Metal, which sells into our retail space, operate out of an xScale asset? Again, we're tremendously excited about this, and I leave you with as another point of differentiation. Okay, we have a history of acquisitions. No surprise. You've seen this slide before. We believe that we've done well. We've done 30 acquisitions plus. One, we're very, very adept at integrating acquisitions now. We create value with it. We will continue to do very targeted acquisitions where appropriate, and we will integrate them. What's important is we create value when we do that. I'll share some slides with you on a go-forward basis. At times, we might not do it at 100%, and that's one of the things Equinix has grown very comfortable with. We don't necessarily have to own 100%.
xScale is a perfect example of that. We own 20%, and we get a fee structure. I can sort of guide you to a transaction that we recently did in Jakarta. It's one of the new markets that is yet to be, that's not yet built, so it's not a dot on our map. When we built out Jakarta, we wanted to go find a partner, and our team in Asia found a great partner, somebody that not only can invest today. They give us the advantage of local market knowledge, and they can invest more with us, and they potentially could go to new markets. I'm excited that we own 75% of that. Our partner owns 25% of it.
It just gives you a sense, there's a lot of tools that we can pull that out of our shed to create economic value for our business. Sometimes using partners can go a long way. I'm excited about our M&A strategy and where we go. When we do M&A, you know, one of the things I say, we don't do it just to scale. We do it to create value. We add it into the platform. It's an extension of what we do. Over time, and you'll see in the next few slides, I'll tell you why that matters. When I just look at the activity over the last five years, I look at the markets we're in, the interconnection that we have. I look at the contribution of EBITDA.
Just based on those acquisitions over the last five years, we would argue that we've created $3 billion of equity value. I'm not going back to the beginning of time. You know how successful some of those acquisitions have been. Just over that short period of time, we believe we've created $3 billion of equity value, and it's representative, again, in the markets, in the interconnection, and in the profit. It wasn't long ago when I stood up on this stage five years ago, and we had just concluded the Dallas Infomart acquisition, as you see here. We also had done Metronode. Both those transactions were very, very expensive at the time for you and for us. We knew what we could do with that platform.
Today, I'm not going to spend time on Metronode, it was a very successful transaction. I want to spend some energy on Infomart. It's the most iconic network-dense building in the United States. That was important to control. It wasn't just the Infomart. What we really were seeking out was the capacity just adjacent to it. Since that point in time, again, it was an $800 million acquisition. You see the Infomart there. We've now built, it's 37 MW of capacity, 11,000 cabinets, 18,000 cross connects. We've put up a new tower. We're 93% utilized on that new tower. Fast-forward, we're putting up a second tower.
Over a very short period of time, we've taken an asset that was expensive on the surface, and our Dallas 11 asset, which is adjacent to it, has filled up 3x faster than we anticipated because we had less large footprint. We filled it up faster, and we did it at a better price point. Relative to the business plan that we wrote at that time, we've augmented that business plan by $700 million. That's about creating value. We knew what we could do as a business, and I think we've got a very special situation, and Dallas is just, it exemplifies that situation for us. Now, in this segment, I just want to talk a little bit about some of the complexities of the world in which we live.
We have a lot going on, and part of what we have to deal with when we have a lot, we have to bring in professional teams. Over the last few years, Ralph and I worked really hard at building our professional procurement and strategic sourcing team. It makes a difference. That team has strong relationships with vendors and partners. That give us access to supply chain and production slots. We're living in a world of inflationary pressures and limited supply chain, and we knew we had budgets to deliver and delivery dates to hit. When you have a professional procurement team, that's what you get. We've also taken our balance sheet because we have strength, and we've been able to pre-buy.
Some of it went on balance sheet, most of it sits in the form of a commitment. We have a commitment. The linkage between procurement and our global design and construction team is unparalleled because they're buying on behalf of that team. As you heard before, I think Jon mentioned we have 50 projects underway, 37 markets, 25 countries. What he didn't say is we have another 120 projects of all shapes and sizes that we need to procure against. Another 120 projects. It gives you a sense, the magnitude of this team and all they have to worry about. Then take it one step further. Our sustainability program office, our sustainability initiatives. Critical. It links, pardon me, it's linked to construction, it's linked to our procurement team.
When we become more sustainable, our customers become more sustainable. We're running at the front of the pack here. We're going to blaze that trail for our industry. We're also going to put ourselves in a very competitive position because we're making this investment, a very competitive position, and it's costing money. We're investing behind it. On the flip side of that is, we think we're going to be one of those preferential partners, whether it's NVIDIA, Nasdaq, Zscaler, whomever it may be, because we are going to be more sustainable. It's a competitive advantage. We also have a power procurement team, high credibility, who focuses on contracting and sourcing. As you all know, power has been a very disruptive, we'll call it, a cost line for us over the last couple of years.
Given their efforts and the work that they've done, we think we've put ourselves in a better position for our customers. Nobody likes cost increases. I get it. Relative to what you'd pay, one, if they did business with somebody else, or two, they did it themselves, we put them in a much more favorable position because of our power sourcing team. Very successful. You do see the aberrations. When you look at this chart in the middle, power was relatively predictable as a percent of revenue. It was relatively predictable. 2022 hit, where we got caught off guard in Singapore, and to a lesser extent, France. In 2023, boy, did that change. A lot of markets around the world, but in particular, Europe, really struggled.
As a result, you saw power cost as a % of revenue, really spike up. As you know, we did a very good job of protecting our cash flow. Hence, the FFO per share. That's paramount to us. When we look, when we look forward with that, we go, "Well, I know the customers didn't like it, but we at least put them in a better position." On a go-forward basis, when you think about regulated markets represent about two-thirds of our power consumption. That means roughly 2/3 of that line, we're a price taker. Effectively, therefore, the customers are going to be a price taker. We have no choice. It's a regulated market. Where we can influence it, we're gonna get ahead of it.
We're gonna buy or we're gonna mitigate those cost increases and enter into commitments to offset that exposure to the customer. On the far left, in that chart, you can see the stacked bar. Each component of that utility cost, go look at your own utility bill and look at all the different things that are on that utility bill. We have the same issues as a company. Those three major components, you can see each one of them increased, but none increased more than the commodity price, the cost of energy. Our effort to become more efficient and invest in those efficiency initiatives is paramount. Paramount for us as an operator, but also for our customers. We want to be the most cost-advantage deliverer of power in our marketplace.
On the far right, you can see a % by region of metered power as a % of our overall consumption. It's roughly 10% on a global basis. It is metered, 90% is circuit-based. Development capacity strategy. You know that we've been very active over the many years. You saw on that acquisition and capital deployment slide, we spent $billions. Again, a point of differentiation, it is dispersed all over the world. Today, 346,000 cabinets, 82% utilized. That's important. Remember, we're in 71, 72 markets, going to 75, 76, 80, whatever. We have land for development, and we're gonna take that, and we're gonna invest it. That land for development. What's important, as you see here, whether it's a retail build or whether it's an xScale build, we're procured land.
We're willing to put a certain amount on our balance sheet for future development. Because we do that, it gives us an advantage, but we do that because we have the balance sheet, we have the liquidity. Order of magnitude, our upward limit is 5% of our balance sheet. If it's a $30 billion balance sheet, we would be okay up to $1.5 billion of investment. The reality is it's about $700 million-$800 million today, and of course, as we take and deploy it, that number goes down. At least gives you a sense that's an important aspect of our strategy. As you take that strategy, you start to think about specific markets, one of the things I wanted to share with you was, your development strategy has to be tied to outputs.
One of the things that we think about is timeline, and I use the U.K. market, London, as an example for this. The London market has subsegments. It has Docklands, it has Slough. For us, it's really important to understand what we need where, what's the timeline, the capacities, what is the empirical data, what's the fill rate? What is basically the pipeline on a go-forward basis? Because we know it takes longer to build, going back to my earlier comment, I would argue that supply eventually will get constrained because it will take longer to build. It is getting harder to get permitting. It is harder to access power. The advantages that we have when we look at this, we say, "Well, let's meter that in." That's us getting ahead of it.
We have the competitive advantage with the strength of our balance sheet, to make some of those investments today across a wide array of markets, knowing that we're not just managing one year out or two years out, it could be three years out, four years, five years. In this case, in Slough, 10 or 1five years. We know we have that capacity, and we're working hard to set ourselves up there. This is just one of the core major metros in the world. When I think about customer-facing investments, I think of it as SG&A. Our SG&A has been increasing, you see the stacked bar. That gold part is customer-facing investments in support of our go-to-market engine. Mike alluded to the fact that we invested this year in 100 new quota-bearing heads.
Those heads will continue to deliver, but remember, our bookings are moving up, and we anticipate over time, our bookings will continue to increase. I'm okay with this investment. I'm okay because I see, as Charles alluded to, the size of the addressable TAM for us now has increased. We need more feet in the street. We know we're gonna grow. We know we're gonna scale, so I'm okay with that. What we've also told you is we're working really hard to build in all these efficiency initiatives, and we are. We are becoming more efficient. We're taking that money and putting it in place so we can give you the growth that is so important. The opportunity's never been greater. It's the right decision.
I will tell you, SG&A, as a % of revenue, is gonna go down between here and the next five years. We are gonna build more efficiency in. We're deploying today for tomorrow, but we don't have to do that next year or the next year or the next year. We're gonna be very selective, and Charles has been good at being very specific. There are certain things that we wanna do because we know the value it will create. It's about creating long-term shareholder value. Just harvesting the cash on the balance sheet and not investing it, that's not what you're looking for, and if some of you are looking for that, this isn't the right place to be. We are gonna invest in growth and the opportunity that's in front of us. Our balance sheet is strong. It's very strong.
We have the cash. Our working capital is in a really good position. Our construction in progress, it's big, but it's not significant on our balance sheet. Whether it's the cash that we have, the cash that we generate, or the leverage that we carry, we're in a very good position as a business. We do have some debt that's gonna mature over the next five years, $6 billion of debt. I've highlighted it here. $6 billion of debt, the weighted average cost of that debt today is 1.6%. We are gonna have to refinance that. It starts in November of next year. Starts in November of next year. What's most important right now, and I'll get to that, the debt piece in a second, is our balance sheet is a competitive advantage, and it is.
When I look at it compared to many of our peers, there are not many public peers, at least in our space, you can see how we're positioned. Our leverage is much lower, our coverage is much higher, and our AFFO payout ratio is low, 42%. Again, $0.58 of every $1 that we generate post-dividend goes back into investing in our future. It gives you a sense of how we're performing. Now, as I said, we have a track record of delivering. In the June 2021 Analyst Day, it was 2021-2025, we give you a sense of what we thought we could do. Well, two years have passed, and if I take guidance from this year, that's three of the five years. We're basically doing more revenue, more EBITDA, more AFFO, more AFFO per share, and we've maintained our competitive, our operational and competitive flexibility.
We are strategically still flexible. We're being able to deliver against that. As I start to think a little bit about what to tell you about our future, well, this one, it gives you a sense that as a business, we're gonna continue to invest. The opportunity is great. I see a situation where we could spend upwards of $3 billion a year for the next five years. That's $15 billion of capital. If I go back to one of my prior slides when I talked about the AFFO and then, and the payout, we're gonna be able to fund the majority of that from the cash on the balance sheet and the cash flow that we generate as a business. We're also gonna be able to support digital. We will have disproportionate investment in digital services relative to the revenues they generate.
I didn't forget something that Scott says, but I'll say it on the next slide. Where's Scott? You reminded me of something, Scott. It gives you a sense that we'll take the cash and we'll invest it. We're also going to invest in sustainability initiatives. We're also going to invest in efficiency initiatives. Again, we have the balance sheet and the momentum that will allow us to competitively win. One thing that I didn't say earlier on is I believe, given our situation and where we've invested, how we've expanded our platform and extended our services, many of the competitors that are out there, whether they're owned by private equity or public, they're not even willing to compete in this space.
They're not gonna, as Mike said, they're not gonna take all the resources and invest it in a go-to-market engine like we have. Hence why we think $3 billion, or something close to that, over the next five years, will represent the momentum of our business, the opportunity in front of it. I believe that we'll win more than our fair share that's out there, largely because of all what our customers have said and the opportunity. Where does that leave us? If you have the growth, you have the opportunity, what do we think revenues could do? Well, here we're telling you, we think revenues can grow 8%-10% per year on a normalized constant currency basis. Again, I'm not including that FX stuff I told you about earlier on.
8%-10% on a normalized and constant currency basis. That does not include M&A. It does not include any price increase or price decrease associated with power. I don't know where power is going to go. It gives you a sense of what we think we can accomplish. The natural question that you will have, I assume, is: Can you do better? The answer is yes. There's 2 accelerants that we're not yet willing to forecast forward because we don't have enough information. What I can tell you is, Scott told you about the momentum in Digital Services. We're excited about it, and if we can deliver against what we would like to as an organization, that 10% can grow. That tells you the opportunity or the potential opportunity that we have out there. The other one is AI.
I know when everybody saw the NVIDIA stock and all the deployments, you wanted instant gratification from a data center company. We can't give you instant gratification, but what we can tell you is, and you heard it from the customers, that was very, very clear. We have a very preferential position because we have xScale. We also have retail and a diverse set of networks and cloud on-ramps and cable landing stations, a set of customers that put us in such a preferential position. It's, even though we're winning some business, it's still too early to forecast what could it mean. Again, 2 points of acceleration. We're not yet forecasting that. We could say, well, do $12 billion there about by 2027, all else being equal. How does that translate into value on a per-share basis?
If you have growth and you're building efficiency initiatives into it, we believe we can grow, accelerate the cash that we generate in the business. We represent that with EBITDA. AFFO as a percent of EBITDA is going to be roughly 78% because we're going to take a higher burden for interest expense in this guidance. That turns into AFFO on a per-share basis of 7%-10%. Of course, when you look at it, we're absorbing not only the debt that we have to refinance, and we're making assumptions on that, but incremental debt that we might draw down to fund that future growth. Again, the majority of our investment in that $15 billion of capital before any M&A is going to be funded from internal sources.
We're going to draw down on some debt as well, where we can, in the most efficient market. What's even more attractive is because we see the momentum in our business, the amount of distribution that we will deliver back to the shareholders is now going to grow at 10% or greater. 10% or greater, and it's coming from operating performance. It is not about capital recycling. It is not about returning in capital. It gives you a sense of the momentum of the business. Let me leave you with these thoughts. We have a track record of delivering. We're fundamentally strong. We're expanding our market opportunity because we have a highly differentiated model. We are able to manage through a very complex and dynamic global environment, and we're doing a good job at it, and it's hard, and it's hard.
We have durable advantages. Those advantages are delivered because we have such a strong balance sheet. We have the liquidity. We have the liquidity today, and we're going to have the liquidity tomorrow. We believe with it, we can create sustained value for our shareholders through growth and a scaling dividend. That's it. That's all I have to tell you. With that, I'm going to pause here, and I think Charles and Katrina are going to come up, and we're going to take some Q&A, if I'm not mistaken. Okay. Thank you.
Okay, that was a process.
Now you guys are in the comfy but hot seat.
Yeah.
First off, thank you so much, everyone, for spending the day with us and doing a little bit of a deeper dive on Equinix. We truly appreciate the time and the conversation. We're going to move next to our executive Q&A. We're going to be taking questions live from this audience, or you can also submit them online, and I'll be reading them off the iPad. Go ahead and email invest@equinix.com, and we'll get this loaded up. We've had a few questions come in throughout the day. I'm going to first start with a question from Simon Flannery from Morgan Stanley. This is a two-parter. Starting with pricing, what is the opportunity to take more pricing action? The second part is, any additional comments on supply chain, inflation, or long-term energy constraints?
Sure. Yeah, I mean, I think that we've already taken some level of pricing action in the business over the last, you know, several quarters. I think that's a reflection of an increasing cost of doing business, also a reflection of, I think, the exceptional value that we deliver to our customers. While, while again, as I always tell people, we're rarely applauded for those price increases by our customers, I think our ability to pass them through effectively is extremely well established. I think there are more opportunities. We've talked about, I think we still have work to do in terms of normalizing, you know, more thoroughly normalizing interconnection pricing in Europe. I think we'll continue to, you know, look at that.
I think we'll, you know, we'll continue to adjust pricing. I think that is going to be part of that, you know, we got to continue to drive both P and Q, right? I think our, you know, our ability to drive units of volume continues to be good. The bookings engine remains strong. Pipeline and pipeline conversion remains strong, certainly, I think price is going to be a lever. I think it's going to be, depend to some degree, you know, to what degree and extent that lever is exercised is going to depend on a number of factors.
I do think the supply situation in the market is one that's going to be very interesting to watch over the course of the next year and a half or so. I think there is a real, a very real possibility that you'll see supply/demand constraints that may elevate broader pricing. We'll, we'll evaluate that, and, you know, to the extent that feels like the right actions for for the business, then we'll, then we'll take those actions. I definitely think it, I think it is something that will play into the model and into our ability to deliver the results that we've laid out.
I think we fully expect that, and I think we're in a better position than pretty much anybody else to make it happen. Yeah.
Let me just on that, just one other point on pricing. One of the things I failed to say when I talked about the customers is that 90% of our quarterly growth comes from the install base as we continue to expand and grow. We think about pricing all the time, but we also recognize that we want to grow with our customers, and hopefully, they want to grow with us, and that's sort of being therefore rational with our pricing structures and making sure that it's good for everybody, so we can deliver the value to the customer, at the same time, without being overly aggressive on our price increase, notwithstanding, you know, at some point, we've got to moderate our price structure for cross connects in Europe.
Great.
Do you want the second part of the question?
Why don't you repeat it just so.
You covered some of it, but any additional comments on supply chain, inflation, or long-term energy constraints?
Yeah. Let me take the very last part of that, because it's the one that maybe I worry about most, in terms of, I think, you know, energy is going to continue to be part of this complex and dynamic environment. That's code for, you know, it's all screwed up out there. You know, so, but, we, you know, I do think that, you know, that is going to be an area that we have to continue to watch. I think we have to be in a position to be the preferred partner for, you know, nations and municipalities and energy providers, etc., for a variety of reasons.
You know, both because of the value that we can create in terms of stimulating the digital ecosystem and the economic growth that it's capable of delivering, and the, and doing that in a responsible fashion. Sustainability plays into that. I think we're going to have to continue to watch that in terms of both the availability of power at the utility level and the availability of power at a permitting level, in terms of being able to permit that power for our use. Those are areas of real focus for us. You know, I think we tried to highlight the fact that we are in a business that requires a level of expertise in these areas that is simply hard to come by. It's hard to fund and hard to come by.
I think, you know, we're ahead of the pack on that, and I think are going to continue to stay there. It is something that I think will continue to potentially impact the supply side of our business, which again, will affect, you know, sort of volume, supply, demand and balance and potentially eventually pricing. You know, we are seeing costs continue to rise. That's probably sort of flattened out a little bit. I think we've seen a lot of that now. I think we continue to underwrite to the same levels of returns that we were at. That does inherently mean you're going to raise pricing, right? Because it costs us more to build.
Again, it's back to that, back to the question of what our ability to price, you know, past those pricing increases in higher costs. Also, you know, higher cost of, you know, capital. But all these factors are kind of built into our overall model. I think supply chain is working its way, you know, through. I think we've been able to stay ahead of that for the most part because of the strength of our balance sheet, our ability to pre-commit, our ability to actually put some of that on balance sheet. But it's not, it's certainly not easy out there. It's a lot of hard work, and luckily, we've been able to make the investments on the supply chain side.
Anything to add there?
Great.
That's our third theme of the day, right? Manage through a complex environment.
Yep.
Our next question comes from Nick, from MoffettNathanson. Charles, in your opening remarks, you were talking about faster growth rates of hyperscalers.
Yeah.
versus other customers, and how also the AI will be part of this. How should we think about the puts and takes of growing alongside these customers versus having a potentially more concentrated customer base?
Sure. First, let me address what might be cognitive distance there between sort of, key statement about, our top 10 customers. You know, a significant number of them being hyperscalers, sort of coming, you know, our, that concentration, going down, and my slide, which shows a hyperscaler growing at 1.6x, the broader business, that sort of is like, "Hey, how the hell does that math work?" Recognize that my 1.6 includes our off-balance sheet revenue, which is a significant driver there.
I think in the, within the sort of on-balance or on, you know, our on-balance sheet, stuff and the revenue that does hit our income statement, you know, I think we're growing, actually that, you know, probably at or maybe slightly above the general pace of the business with the hyperscalers. Absolutely, I want to continue to do that, because I think it's all about cementing our cloud leadership, and ensuring that we can still be that trusted center of a cloud-first world. By the way, let's just be frank, the hyperscalers are dominant driving forces in digital transformation, period, end of story. We have to continue to support that.
Cloud migration and adoption of, you know, cloud or movement of clouds or workloads to cloud are going to continue to happen, and we have to continue to be positioned to go alongside that. They are also are some of our most productive channel partners. They are bringing the deals. Not only are they coming and saying, "Hey, we need interconnection," which I think one of our customers mentioned, you know, that, you know, to connect to these folks. Very frequently now that they are trying to live on deals of, you know, they're trying to do $500 million-$700 million TCV-type contracts, you know, on a quarterly basis. You know, those often come with a discussion with the customer that says, "Love it.
I want to, you know, sort of continue to drive digital transformation and adopt cloud, but I've got a bunch of stuff that I need to have in private infrastructure, and so how are you going to solve that? That really is often when we're drawn into that. So there are So I think the bottom line is, you know, we have to continue to cultivate really strong relationships with them, and continue to drive that. If you look at that, I think a very healthy mix of business right now.
I think that we're seeing good growth in the, in this sort of more traditional retail side, a little bit of large footprint retail, which we actually work into our underwriting, you know, really shunting the really large stuff off to xScale. I think we're in a great position there.
Great. Let me take one more online, then we'll flip to the audience. This is from the buy side, from Credit Suisse. Will Equinix target higher ratings or propose a new leverage target?
Look, look, we work very closely with our credit rating agencies, and over the last few years, that relationship has only strengthened. We've had more flexibility, we've had upgrades, and I think we're at a very good rating level right now. Largely because, you know, as we look forward in time, like, I don't know where interest rates are going to ultimately go, but I get a sense at some point they're going to cap, and then they're going to go the opposite direction. For me and for the business, I think leverage is going to be our friend. Today, as you saw, we're 3.4 x net levered.
We want to continue to move that leverage up, but I think operating at the level we have today feels appropriate, because we want to make sure that we use that leverage accordingly. I don't think having less flexibility in a period where there's substantial growth in front of us, a vast opportunity that is unparalleled in, probably in our history, it just feels that we're at a very good spot, we can access cheap capital or cheapest capital available at the time, and operate with the flexibility that we need.
Yeah, the reality is that we've typically sort of punched above our weight class, if you will, in terms of our ability to access capital under terms that are very similar to what, you know, sort of a notch up would do. We, again, dynamics of the market are always shifting, but I think we believe we can get, you know, as you said, best available capital, and have a little more leverage on the business, which I think, you know, right now, with the opportunities in front of us that we talked about on the stage here today, I think is the right play for the business.
Great. Let's go ahead and move on to the room. If folks want to ask a question, go ahead and raise your hand. We have two mics.
Hello? Hi, Alexander Waters from Bank of America. Thank you guys for the time today. Maybe just first on the long-term guidance, appreciate the update. Just wanted to touch on the 50% EBITDA margin that was in the 2021 guidance. Secondly, just on the power transmission issues, just wanted to get your commentary on how that's impacting the development pipeline. Thanks.
Sure. We, we of course, knew that would come, that question. Look, I mean, as we've been telling folks, you know, we absolutely believe that continued, you know, driving operating leverage is critical to the business. I still believe that we are gonna have the scale to generate 50% EBITDA margins in the business over time. We're always balancing that pursuit against long-term value creation. Rather than sort of lay out a new timeline, which you guys would ask us about every quarter, you know, we are instead, I think, saying we are committed to, you know, long-term margin expansion.
We believe that 50% is achievable, and we'll look to achieve it on what we think the pace is that is most value-creating for the business long term. That's kind of where we are on that. I do think that there are a number of areas, you know, that we are investing in ensuring operating leverage. Simplification and automation across the business continues to be a priority for us, but there's also areas where we're invested a little ahead of the curve. I would say, if you look at Mike's chart and all the headcount that he seems to have grabbed, you know, we've invested ahead of the curve there.
But in all seriousness, that's because it's a very productive go-to-market engine, and we're continuing to shape it for the opportunity that we think is ahead of us. Over time, we would expect to scale into that and drive, you know, drive more, you know, drive better margins. On the operating side of our business, you know, Ralph is constantly looking at how to continue to streamline, automate, and we're investing from an IT perspective to help him do that. Jon, as well, in terms of just the broader, how we operate the business day to day. There's sources of operating leverage. I think we're gonna be very tight on G&A.
The S, the S part, we've been a bit more forward-leaning on because of what you've seen here today, but I think we're gonna be very tight on G&A, and our teams understand that and are aware of it. That's where we are on the EBITDA margin side. On power transmission, you know, or power, I think power availability probably is what you're talking about. We don't see it meaningfully impacting our development pipeline. We are in a good position. We've got the allocations that we need to continue to drive the committed projects.
As I said earlier, my concern is longer term, ensuring that we can get the use permitted, that we're gonna have the availability, but we're also gonna continue to invest from a technology standpoint to try to mitigate those risks over time. I think on-site power generation is gonna be a key part of the future for our industry. So we're already investing in ensuring that. We've already got a facility that we've got up and running in Ireland, that we, for a variety of reasons that people understand well in Ireland, that we already have the, you know, fuel cells on natural gas that are a primary source of power availability there.
those are the kinds of things that I think we'll continue to look at to mitigate that, but we're gonna have to be working every day to make sure that we're positioned well on the power front.
Thanks. Frank Louthan with Raymond James. We just have 2 questions for Keith. What sort of incremental cost of debt do you have in your assumptions for the outlook? Looking at your capital plan going forward, can you comment on what the source of that capital will be between debt and equity and other? Thanks.
Yeah, I'm looking at, yeah, where's Jamie?
He's over there.
I mean, give you a sense that roughly our source of debt over the... Again, recognizing it's not gonna be till the back end of next year, it's 4.5%-5% to give you a sense. We recognize that, you know, is meaningfully higher than what we were borrowing at. As you also know, we've been sourcing capital in different markets. We recently took down $600 million in Japan at 2.2% over 14.6 years. We're looking at Switzerland right now. I think you could see us accessing the Japanese market again.
The extent that we have to go to the market, and actually source investment-grade debt over term, I can see a scenario where we, where we might just draw down on our unused line of credit for some period of time, if we ever had to, if the market conditions weren't permissive, if you will, to driving an efficient borrowing rate. Then as it relates to just generally speaking, our sources of capital, again, the vast majority of it's gonna come from internal generation, so the cash that we generate in the business. Secondly, it'll come from the cash that we have on the balance sheet. Thirdly, it's gonna come from debt. I would say, probably an over weighting of debt, probably 60/40 debt relative to equity.
I guess I'll just make one comment, and that is that, I am very pleased to be playing the hand we're playing from a balance sheet perspective, and our team deserves a ton of credit for that.
Yeah. I think what's most important is we think the real value in raising debt at the right time. We use equity because we try to find that balance, gives us the comfort, the strategic and operational flexibility that you sort of see today. Puts us in a competitive advantage. It certainly is seen very favorably with our rating agencies. Also takes a little bit of risk off the table, and in periods of great volatility or transition, I just feel a lot better with it. That said, we're gonna be very disciplined about our equity capital and when we raise it. We've used the ATM sporadically, and we've done it at a very effective time where we've been able to access the capital markets efficiently.
We'll continue to do that, but our, I guess, our position is that we would look to more to debt than we would to equity, but we're always gonna nibble a little bit on the ATM just because we think it's a good practical way to put cap on the balance sheet.
Hi, Irvin Liu with Evercore ISI. Thank you for the presentations today. Charles, you mentioned earlier the prospect of a U.S. xScale facility, and given the opportunity presented by AI, do you expect purpose-built AI model training facilities to be part of your xScale strategy looking forward? My second question, I'm gonna stick with xScale. How would you characterize the appetite for JVs among the financial sponsor community, given some of the crosscurrents such as high rates? Thank you.
Yeah, great question. I would say that I don't see it as much as purpose built for that specific use case. I do think AI is gonna be one, and AI training in particular, but over time, a broader, I think AI opportunity as a driving force for growth, both xScale and retail. I think, you know, sort of, we also... I was talking to somebody at lunch about this.
You know, I think we have to be very careful in terms of, you know, the notion, for example, we've heard from some people is, "Hey, we don't really care about resilience, and, you know, so we just want capacity, build us an end facility." Well, you know, I don't I think we're gonna think very carefully about that kind of thing, you know, because sitting there holding a white elephant, after, you know, some term, on a facility that may not be valuable for some other use case, is probably not the kind of thing we're gonna do. Now, do we need to adapt our design and ensure that we can provide the power density and the cooling capacity, etc., to handle the workloads and some of these things that we're...
Yes, but I think our team is adapting the designs, effectively for that. I think we'll be very careful with the underwriting. We're not gonna be all things to all people. That's not, the game that we play. I do think, you know, there are gonna be opportunities where we're gonna have some level of distinctive advantage on both the training side and over time, more specifically on the inference side. I do think xScale will benefit from that, and it does probably mean, and I see Krupal smiling at me already, that we're probably gonna have to sort of increase our aperture of customers. You know, we have been very focused. In fact, almost all of our leasing has come from a handful of customers.
All of our leasing has come from a handful of customers. I think we're gonna probably need to, you know, take a little bit of a click out and look at what, you know, some other, you know, strategic customers who would be generating those types of workloads, you know, there. I think that. What was the second piece? Oh, the JV appetite. You know, look, it's not what it was, right? You know, and we feel very fortunate to have the partners that we have. GIC's pockets are as deep as they come, and they've been a great partner to us. So we're...
I think as we look at, you know, kind of where we go next, I do expect that we would entertain other, you know, possible JV partners around the world. I think as you've seen, a lot of people have tried to sort of, you know, what is it? What do they say, oft imitated, never repeated. You know, there's a lot of people that are going and trying to do some of the same things, and there's some, there's some, you know, some hard slogging in the market, I think, to try to get people all the way there. So it's definitely not gonna be... I think the current environment, even for us, wouldn't be as easy as it was, or as receptive as, I guess, as it was.
Nothing is easy. You know, I do think that we're gonna be differentiated in our approach, and I think we will find the right types of partners, if, you know, if that's what we decide to do.
Great. I'm gonna go grab one from online. This is from Synergy, John Dinsdale, on M&A. "The last 2, 3, 2-three years, you've seen a distinctive slowdown in your scale of acquisitions. How do you feel about the incoming money or squeeze coming from potential deals by private equity? Do you foresee any really large acquisitions in the future?
Yeah, I get that question a lot in terms of, hey, do you see any sort of transformational or platform-type, you know, acquisitions? I would say, I think those are less available to us. you know, but, I think there are still deals that are going to have meaningful, you know, sort of accretive, value to our strategy, and that could come at a, at a variety of price tags. So, I think some of these, you know, you know, particularly I think Jeremy and his team in the Asia region and the ASEAN markets in particular, have identified opportunities that might be, you know, opportunities for us to continue to expand.
You know, some of those organically and some inorganically, that might be, you know, not those larger ticket, type deals. I think we'll see other opportunities like that around the world. I think that's probably going to be the more typical. I think there are also, you know, things that as we look at, exercising the full strategy could come with slightly the larger price tags, but not be as comprehensive or as, you know, sort of they're not going to look like a, you know, a Verizon or a, or a Switch Data or a Telecity, etc.. So I think it's going to, the landscape on M&A is going to evolve a little bit.
Eventually, I think that as we get our feet under us, on digital services, I think that's an area where we may look at capabilities that could be additive to that strategy. I think right now, we're really focused on driving execution of the plan in front of us.
I'll just add that, you know, again, we talked about very targeted, and also remember my comment, we're not fearful to actually find partners or people who want to partner with us inside some of these markets. That creates a sort of an attractive situation for us, so we don't have to go all in, and it gives us, you know, maybe, you know, opens the aperture and opportunities that will present themselves. The other thing, when I was talking about the acquisitions, I used Infomart as the, as the example. When I think about Axtel, Entel, MainOne, GPX, I'm missing one, Bell Canada assets, we see those opportunities as we continue to integrate them into our platform and expand from that initial investment. They were very targeted investments, but we believe that they can create immense value for us.
It doesn't have to be a massive acquisition for us to have success.
Yep.
Whether private equity chooses to bid up an asset doesn't necessarily mean that's the asset for us.
Michael Elias, TD Cowen. Question for you guys, I guess, a bit of a philosophical one. As I think about it, the competitive advantage of Equinix goes back to you guys pioneering the carrier neutral data center, right? Bringing the networks in. That lends itself then to your market position of cloud on-ramps, you invested ahead of that, right? You guys, you know, essentially helped bring the Direct Connect to market. As we think about the next evolution, and potentially AI being one of those, how are you getting out in front of that to ensure that, as with the first two evolutions, you have, you know, you're able to garner a large market share of that? That's my first question, I have a follow-up.
Yeah. I, you know, I think it's about the platform vision and our ability to, you know, you know, really execute on that vision. You know, it's, I was, you know, I talked about when the addressable market that we were moving, the market's moving towards us, and we're moving towards the market, and people are like, okay, Charles is speaking in codes again. You know, I think that I think there is really that what that is, what that means is that, you know, I showed that chart of the, you know, how the $140 billion market cap, you know, or, I mean, sorry, addressable market might split between digital leaders, digital followers, and digital starters.
You know, the faster they can move towards us and become those digital leaders, then we, our ability to execute and our probability of win goes way up. The way that we can do that is execute on the platform vision. One, continue to invest in the resources that we have that are helping them advance their digital transformation agenda, but also investing in the platform vision, which requires a level of platform enablement. There's this, I talked about that sort of sideways text on that platform vision chart that says, "Platform enablement." That's a real, that's a heavy lift for us in terms of saying: How can we ensure that, you know, key technology partners can bring their value to the platform to create whole solutions to solve customer problems faster?
If we can do that's how I think we accelerate, because we did this more in sort of hand-to-hand, you know, kind of, combat ways, right? We were, you know, sort of going and finding the magnets, bringing them in, you know, doing that, and we're really good at that. We, you know, we've done that extremely well, right?
You know, I think we've got, you know, now unlock the power of technology to say, "We're just going to open it up so that you can come here, and you can frictionlessly deliver your value on the platform." Now, that's easier, way easier for me to say on stage than it is to actually do, I think that's how we, you know, sort of continue to maintain the relevance and the sort of power of our business model in a forward-looking way.
Thank you for that. The second question would be on the M&A front. I mean, you've talked about it. You've said in the past that you'd be willing to stretch for the right acquisition. It seems like, you know, even here, you're talking about Infomart. What was strategic about Infomart? It was a key, exchange hub. You know, as I think about it, we know that there are some interconnect assets out there in the wild. It feels like you're teeing us up for, you know, something that's coming down the road. Am I interpreting that correctly?
Well, we're not going to. I think we look at all transactions, as you know, Michael. Again, right set of circumstances with the right opportunity, we'll certainly, we'll go after it. Again, that's what, that's our business, and that's the foundation that we've created for ourselves. It starts with networks, the cloud on-ramp, cable landing stations, it's all things digital. Again, we've created this environment for ourselves. As we sort of extend that platform, if we can do it, we're gonna continue to do it, and AI can sit on top of that as well.
Great. that actually concludes our-.
Let's do, we're gonna do Michael Rollins right there.
All right.
Sorry. Mike, Michael was desperate to get in there.
Oh, Rollins.
Yeah.
Mr. Rollins.
Wrap us up.
Thanks for squeezing me in. Michael Rollins from Citi. If I could ask 2,
Of course.
Do I need to do the reminder again, Mike?
In 20 parts. The first one is just go back to the EBITDA question. With the revenue growth guidance, and you have the AFFO per share guidance and EBITDA sandwiched in between, is there just a simple way investors should think about what the EBITDA growth should be over the next few years to get to that AFFO goal and take into account the comments you're describing on efficiency and operating leverage?
Well, I know you've got a very sophisticated model, Michael, and so you don't need me to tell you how fast we can get there based on, based on the AFFO per share. Suffice to say, Charles was very good. Look, we want to invest in things that are important, but we are gonna build efficiency into our SG&A base. I also think Ralph can, I'm committing you now, Ralph. He's gonna run the IBXs more efficiently over time, and I think our gross profit can improve. There's gonna be a combination between the two, but certainly to drive to 50%, we just don't want to put a timeline on it, largely because we want to be discreet about our investments.
The other part that's really challenging right now is we have no idea what power is gonna do, and it just doesn't feel like we should be talking every quarter about an EBITDA target when we really are focusing on value per share. Hopefully that answers your question, but it's relatively formulaic, as you can appreciate. We're gonna grow the business. It's gonna drive more value. We're gonna run the business more efficiently on the SG&A line.
Secondly, regarding the growth in the business, you described earlier some of the penetration you have in the Forbes Global 2000 accounts, you outlined in another slide, the Global 5,000 opportunity that the company's focused on. As you look at that five-year business plan, how do you want to see penetration improve or deepen from where it is today to what's that base case level look like in five years?
Yeah, I don't know that we have a specific year, but I would tell you that, you know, we're, I think, 58% on the something like that, on the Fortune 500, 41% on the Global 2000. You know, we've come a long way in the last several years in terms of our enterprise penetration, and we're really seeing good momentum there. The beautiful part, and the reason that the team originally had the Fortune 500, 'cause they were like, "Well, it's a bigger number. You know, let's put that on there." I said, "Well, no, I would like to put the G2000 on there 'cause it still demonstrates progress, but also demonstrates the, you know, the additional opportunity left to be had," right?
We've got, you know, it's, the 59% still left to go get and significant wallet share in the 41%, to be had. I would say that right now, you know, we're probably getting those people that are those digital leaders, right. You know, We're able to access wallet share more effectively. This is what I really mean by, you know, can the market move to us. It's about accelerating their, both their appetite for digital transformation, which I think AI is gonna continue to contribute to, and their ability to execute.
Oftentimes, I actually think it's not budgets, but it's ability to execute that are holding people back from the pace at which they're accomplishing their digital transformation. I don't know what the right number is, but more STAR new logos is absolutely required. I'm getting the head nod from Mike. He understands that. You know, that's clearly gotta be a part of it. I think I don't know exactly what that number is, but that's one that I think we're gonna wanna continue to watch 'cause I think it's a major driver in the business for sure.
Thanks.
Great, we're gonna go ahead and wrap. On the logistics side, for those in person, please join us for cocktails and kiosks after this. Let me turn it over to Keith for any final words.
Great, let me just take this opportunity again to thank all of you for making the effort, both in person and online. Secondly, I want to take this opportunity on behalf of all of us to thank our investor relations and IR team, and certainly the production team for putting this together. Thank you to all of you that put this together, and we look forward to having drinks with you. Thanks very much, everybody, for joining us this, today.
Thanks, everybody.
Thank you.