Nikesh Kalra Talks Equinix’s Perspective on Connectivity in Oregon

Jul 11, 2018
by Josh Anderson

PORTLAND, OR — Nikesh Kalra is Director for New Product Development at Equinix, one of the most influential and buzzworthy firms in the data center space. Everyone wants to know what they’re up to, and that includes CapRe. So at our Second Greater Portland Data Center Summit this Spring, Brian Klebash, CapRE’s Founder and CEO, leapt at the chance to pick Kalra’s brain during the panel Connectivity in the Pacific Northwest Markets: Analysis of New Subsea Landings, Latency Challenges and Innovations in Fiber. “Nikesh, why don’t you tell us Equinix’s perspective on connectivity in Oregon?” asked Klebash.

Nikesh Kalra, Director for New Product Development, Equinix

“When you hear everything that’s been described here today and then you overlay it with the hypothesis of the Equinix business, which is very dense interconnection to get you from Point A to Point B, if fits actually very well,” replied Kalra. “But point A to Point B is changing over time. It used to be that the original model was very much telecoms to telecoms. Then, it was telecoms to content providers. Then, it was financial services to financial services. Now it’s everybody to the Cloud.”

Kalra then pointed out how, today, you can easily see that same evolution show up in the ownership of the sub-sea cables themselves. “So sometimes the historical ownership of the sub-sea cables was largely in the private equity or telecoms, or a mix of the two,” he recalled. “And in the last few years you’ve seen Amazon and Google and Microsoft show up as the primary financiers and the owners. So private equity is simply looking for financial returns – they’re not actually the consumer of that. Whereas Microsoft is both an owner and a consumer of that cable. And they also happen to have a huge footprint of data centers in Oregon. Coincidence? Probably not.”

data center summit“So if you put it as, why does Equinix care so much about these, and why are they putting a lot of effort into, in many cases, actually participating in those consortiums by owning or operating or co-financing the landing station themselves?” he asked the room, rhetorically.

“Because we didn’t want to bring the rest of our eco-systems in line with those cables. Because, in fact, many of the content providers that Michael is referring to are in fact customers and tenants of ours, whether it’s a Netflix or an Amazon or Netflix inside Amazon or….dot dot dot dot dot! It’s actually critical to the future of our business to be in the middle of the eco-systems to provide intermediate connectivity or access between the parties.”

“Can you describe the current landscape of Equinix in the Northwest, specifically in Washington, Oregon and California?” followed up Klebash. “What’s your overall portfolio in the West Coast like?”

“Sure. Globally we are at 200 facilities in about 52 metros,” he shared in response. “On the West Coast, as you probably know, in California, we are very strong — The San Francisco area, Los Angeles, Washington, and Vancouver. And we’re actually exploring the Oregon market right now for this exact reason. We don’t have what I would call a fixed mindset around a portfolio, such as we’re only going to be in certain places. Because markets are not static. Ten years ago Portland looked very different than it does today.”

“Thereby we’re interested in looking at [things like], should we acquire? Should we invest? What are the dynamics of the market and what’s our future?” he divulged. “I think that the way that we look at investing is also different. The format of the data center that we might have put down ten or fifteen years ago might have looked different than what we’re going to do looking forward.”

“I have to sort of be careful about sharing certain types of information about how we’re going to look at our portfolio moving forward, but if you look at our earning calls and our press releases, you’ll see some signaling around us thinking differently about how we’re going to go into each marketplace,” he concluded.

For more from this panel, check out previous CapRE Insider Reports:

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