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Interview with Michael Winterson, Managing Director, Equinix Services

11th January 2017

HotLINX Editor, Jeremy Orbell, speaks with Equinix’s Michael Winterson to discuss the recent acquisition of TelecityGroup, the issue of fibre tax in the UK plus Equinix’s relationship with LINX

First of all please tell us about how you came to work for Equinix

My first day at what is now Equinix was January 1st 2000. I’d had a working relationship with some start ups and the founders of IXEurope, as it was then known, called me in when they’d raised the first round of capital and the first data centre was built. There’s still a core group of 7 or 8 from the very first day at Equinix. It has been a fun company to work with who have thrived on the challenges of being a growing, global organisation.

Equinix recently completed the takeover of TelecityGroup. How did the process evolve?

The Telecity negotiations began in the Spring of 2015. It took longer than we’d hoped because the deal was brought in front of the Competition Commission of the European Union but that was to be expected. What the management teams of Telecity and Equinix knew from the beginning was that our business models were very closely aligned. We launched Cloud Exchange and Telecity launched CloudIX and we both knew that our businesses were undergoing a huge transformation - to us the acquisition made a lot of sense. It opened up the combined group to significant new markets and while there was customer overlap, it still added 800 new customers to our portfolio plus seven new metros. Metro coverage is going to be critical for the future of where we see the data centre business going.

How do you see the data centre industry and Equinix developing?

At Equinix we see the future of the data centre industry in delivering access to enterprise to business consumers of data centre services. Data centres were almost exclusively selling into the service provider community and Equinix are now being able to present itself to an enterprise as a key part of their IT strategy. Behind that we still have over 6000 service providers as customers and we want to make sure we provide an excellent service. I believe we are respected in being able to put the right capital up to building good data centres and our operational record is very reputable, even market leading. However, when we do have a problem, such as the London outage earlier in the year, our response is unequivocal, rapid, and strong. We spent a lot of money immediately upgrading and replacing the Harbour Exchange equipment that hadn’t worked and, as a safeguard, we replaced similar equipment that had been unaffected.

We’re finally seeing the digital transformation people have been talking about for 5 or 6 years taking root. I’m meeting with enterprise clients who are ripping out 30 year old technology and replacing it in the space of 12 to 18 months. To a global enterprise this is radical. They are embracing IoT, apps development, and these are truly the end customers of LINX members, including us at Equinix. These end customers are the ones who are spending the money on IT to deliver to the consumer products and services. This change is accelerating and becoming massive. The financial services and healthcare sectors, plus many others, are in turmoil and are being forced to transform themselves. Almost every one has elevated the CIO to lead partner in that transformation. The question to ask ourselves is are we fit for purpose in this new world order.

What are your views on the UK government’s tax on fibre optics?

We need to take this in the context of the UK as a leading service economy and a country that states that it wants to be at the cutting edge of technology. It claims that it has the highest concentration of technology companies and start ups and developers outside of Silicon Valley and yet the government has some policies that make you wonder if they realise they are in fact slowing things down. Why would you tax fibre optic networks in such a way that a company takes on a tax liability in advance of delivering any business service over it. Furthermore it slows down the adoption of high bandwidth products and services that UK specifically says it wants to deliver to its people. I can’t imagine that the fibre tax revenue itself offsets the penalty that the UK government is putting on the UK population. In a competitive market like the EU there are plenty of other countries that companies could choose to colocate their technology.

Editor’s Note: A concession on fibre tax was made in the Chancellor’s Autumn statement but details are yet to be finalised.

What about the future together for LINX and Equinix?

At my last meeting with LINX we spoke about how we need to engage more with leading banks, healthcare companies and enterprises on what peering is. What can you do with it? How can it solve network optimisation issues with apps or IoT strategies, or because you want to harmonise public cloud with your old technology. We’ve got to go out and speak to new people who don’t have the same level of understanding and bring them up to speed. It’s difficult because many are afraid of change. They’re curious but to them the Internet community is still novel. There is prejudice but maybe they are just insecure. They are perhaps worried about darknet, DDoS and fraud etc and yet the Internet is very closely aligned with what they need as businesses. However, it requires skillsets that these companies often don’t have. We can help them overcome these issues together.

An expanded version of this interview with additional questions is available to read on page 19 of issue 48 of the LINX membership magazine, HotLINX.

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