Tue, 25 Aug 2009
The Jakarta Post, SINGAPORE

Equinix, a global data management centre provider, is expanding its business in Asia due to the rapid growth of information technology.

The US-based company has established Singapore as its IT hub for companies in Southeast Asia to connect regionally and globally. It also has other hubs in the region, including in Hong Kong and Japan.

However, the company - whose customers are mostly telecommunications firms, hosting providers and network providers - contends Indonesia is not yet a suitable place for investment, despite the fact this country of 240 million people has 25 million Internet users and more than 40 million cell phone subscribers as of May 2008.

Below are the excerpts of an interview between Equinix’s president of Asia-Pacific, Samuel Lee, and The Jakarta Post’s Mustaqim Adamrah, after the launch of Equinix’s second data centre in Singapore recently.

Question: How do you see the market in the Asia-Pacific region and in the Southeast Asia region? How do you explain this in number?

Answer: Globally, I think in the US, if we’re talking about market size, it’s about maybe US$7 to $8 billion, and Asia Pacific maybe around $2 billion, something like that.
But it’s debatable because today all people can have a very different comprehension of how big the market size is.

But in general, the Asia-Pacific market size is around maybe a third to a half of the US size. But the growth here in Asia will be faster than the US because of the economic development.

For Southeast Asia, Singapore is an IT hub. So a lot of companies have a call centre in the Philippines, their office in Indonesia. What they want to do is just pull the international telco connection and break that connection to Singapore and hook up in their IT systems in Singapore.

What percentage of Equinix’s customer base do telecommunication companies account for?

Actually, for Asia Pacific, it’s almost like more than 30 percent. We have a relationship with telcos.

We have lots of customers like network service providers coming from Southeast Asian countries, and Middle Eastern countries as well. Most of them are telcos, network providers; they’re ISPs (Internet service providers).

Does Indonesia have a large number of customers among other Southeast Asian countries? How do you see the Indonesian market?

No. I think it’s more the other Southeast Asian countries, mainly the Philippines.

When you look at Indonesia, how many telco companies you have, how many ISPs you have? And for the most part, they need to have international access and connect, in other time, with telcos. And maybe then they will be our costumers.

Actually, we see Indonesia today as very much like some other ASEAN countries. It’s still domestic-focused, with a lot of domestic demand. Some local contents are shaped up. There’s a growing Internet population. The Internet community will grow and then some local contents will start to shape up and create targets. It’s like in other countries. When they start the Internet infrastructure, this happens.

What we don’t see today is the demand from multinational companies that make Indonesia a hub to support their business. So this is why Equinix still doesn’t have a data centre (in Indonesia).

If you think the demand is not there yet in Indonesia, when will it be?

We don’t know, honestly. Equinix as a company can’t create demand. But we’re willing to work with the local authorities. For Indonesia, what they’ll get here is just something we can’t naturally know. It depends on the whole global economy.

What does make you different from other companies?

What differentiates us is network density. Network density is the number of network companies inside our data centre.

For example, enterprises here, when they come to our data centre, they can connect to the telco company they want, and then they can connect the traffic to you as if you were inside the data centre.

If they come to our data centre, maybe to order a local telco, Singtel or Starhub, connecting their customers, to maybe AT&T, or VZW data centre.

Even some companies, if they want to get into this data centre industry, will need a lot of money.

They’ll have to have $10 billion so they can build a beautiful data centre like this. But the only thing they don’t have is network density. So who wants to go to a data centre that’s empty and there’s no one you can connect with?

How will you maintain your business?

We will continue to endorse network service providers into our data centre because as I mentioned, telco density is the main differentiator for Equinix, no matter where we are.

We’ll view our inventory ahead of the demand. So when we have costumers come to us and ask us for space, we have inventory to serve them. In some countries, we do have experience in going back.

Going back means we’ve already sold out our data centre, but the new one is not there yet.

So when our customers come to us and ask for more space, I don’t have to say, “Oh sorry, you need to wait for six months.”

We don’t want this to happen (again) because this will give an opportunity to our competitors to get our customers. So we don’t want to go back, we’ll continue to build our telco density.



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