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Equinix Cloud Exchange: Simplified Multi-Cloud Connectivity for a Successful Hybrid Cloud Strategy

  • June 2014
  • 11 pages
  • Frost & Sullivan
Report ID: 2200865

Summary

Table of Contents

In this SPIE, we discuss the market trends driving the need for direct private connections to the cloud, conduct a deep-dive into the ECX’s features and benefits, and explore how the platform impacts the various stakeholders involved—enterprises, cloud service providers and network service providers (NSPs).

Introduction
On April 30, 2014, Equinix announced the Equinix Cloud Exchange (ECX), an interconnection solution that offers global companies the ability to access multiple clouds at select Equinix data centers. The platform brings together enterprise customers, cloud service providers and network service providers to facilitate secure and reliable private network connectivity to multi-vendor cloud services. By using the ECX, enterprises can bypass the best-effort public Internet; build sophisticated hybrid cloud solutions using the high performance direct connections, and save on network bandwidth costs arising from separate direct connections to multiple clouds.

Considering Equinix’s history in the interconnections business—the company launched Internet Core Exchange (for carrier network-to-network connections) in 2001; and Equinix Internet Exchange (for content to network interconnections) in 2004—the launch of ECX seems like a natural progression for the company. In this SPIE, we discuss the market trends driving the need for direct private connections to the cloud, conduct a deep-dive into the ECX’s features and benefits, and explore how the platform impacts the various stakeholders involved—enterprises, cloud service providers and network service providers (NSPs).

Market Trends Driving the Need for Private Network Connectivity to Cloud

There are several market trends that are driving demand for private network connectivity to the cloud, or a network-enabled cloud. A network-enabled cloud is a cloud service that comes integrated with the security and reliability of a private network such as Carrier Ethernet or MPLS VPNs. In a network-enabled cloud environment, the cloud resources are pre-provisioned with private network resources, to eliminate the security risks of connecting to the cloud over the public Internet.

Enterprise Cloud Adoption is Increasing

The U.S. Infrastructure as a Service market crossed the $ billion mark in revenues in 2013, reflecting the acceptance of the hosted, on-demand model for creating and delivering IT resources.2 In the 2014 Frost & Sullivan Cloud Survey, percent of the respondents indicated they are using cloud services. Furthermore, in Frost & Sullivan’s recent analysis of the U.S. Data Center Services market, 2015 is predicted to be the year in which IaaS revenues will surpass traditional data center services revenues.3 The compound annual growth rates (CAGR) from 2012 to 2017 for retail co-location services and managed hosting services are expected to be percent and percent, respectively; however, the IaaS market is expected to grow at a CAGR of over percent during the same period. Stratecast believes that as enterprises increasingly make cloud an integral part of their IT infrastructure, they will place more emphasis on the networks that connect the various pieces (on-prem cloud, private data centers, public cloud, co-location facilities, managed hosting) of their hybrid IT deployment model.

Concerns Regarding Security and Performance Reliability Continue to Inhibit Cloud Adoption for Some Workloads

From the beginning days of the cloud, businesses and pundits expressed three major concerns about the shared, hosted model: security, reliability, and application performance. These concerns continue to top our restraints chart every year. Figure 1 shows IT decision makers’ perceptions regarding restraints to cloud adoption from our 2014 Cloud Survey. The responses mean that providers’ security assurances have not allayed their customers’ concerns; instead customers are selecting cloud despite their reservations. Correlated to unconvincing security assurances, as long as there are high levels of perceived risk, even the most enthusiastic cloud customers will place only non-critical, peripheral workloads in the cloud environment.

Clearly, providers still have a lot of work to do to address security concerns. Their efforts should be on multiple fronts. They should look to enhance their services with core or optional security elements. They should also take greater liability for data protection through contracts and service level agreements. For example, a network-enabled cloud can help enterprises take advantage of the security features already embedded in their WANs, thus minimizing the risks of distributed denial of service (DDoS) or other threats presented in the public Internet.

Demand for Hybrid Cloud is Growing

End-user research confirms that cloud is now a part of broad IT transformation strategy for more enterprises than it was in the past. In the 2014 Frost & Sullivan Cloud User Survey, designed to identify current perceptions about the cloud among United States-based IT decision makers, 20 percent of the respondents indicated that they expect the cloud to complement their existing IT strategy. Consistent with a complementary IT strategy, Figure 2 shows the market adoption trends for hybrid cloud services. The responses reflect businesses’ current desire to maintain heterogeneous environments consisting of on-premises data center and hosted cloud facilities.

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