March 26, 2015
EdgeConneX has created a new edge of the Internet by identifying the necessity of an Internet of Everywhere. They specialize in providing purpose-built, power dense and edge of network Edge Data Centers and wireless solutions that enable the fastest delivery of content to consumers. By designing and deploying facilities that are strategically positioned nearest to network provider aggregation points, EdgeConneX ensures the lowest latency data delivery and an improved quality of service. The only way to confront the limiting physics of the Internet is to eliminate physical distance between content and its consumer and that is what EdgeConneX is doing across the country. By creating an eco-system within their Edge Data Centers that includes content, IP, cloud, gaming, video streaming and rich fiber under a single roof in under served peering markets, EdgeConneX resolves latency and bandwidth challenges by optimizing content’s ability to reach end users.
Telecom Review recently met with Clint Heiden, Chief Commercial Officer at EdgeConneX, to give our readers a good feel for the Edge Data Center marketplace which they have been creating and defining since 2013, albeit in stealth mode until just recently.
Clint has over 22 years of experience in telecommunications, data centers and Internet technology companies. Prior to EdgeConneX, Clint served as President of Sidera Networks where he led go-to-market efforts and was instrumental in the company’s acquisition by Berkshire Partners. Previously, he launched the fiber company Intellifiber Networks that was ultimately bought by PAETEC for $460 million. He also spent time on the leadership team of Cable & Wireless, specifically for the running of Exodus Communications and Digital Island, as well as starting Sales at UUNET and spearheading a global division. The sum of these parts adds up nicely for EdgeConneX as they tackle the US and set their sites on International expansion.
EdgeConneX defines their Internet of Everywhere as bringing content to consumers locally, around the world. They currently have 20 facilities across the US, all but two of which were added in 2014. Throughout 2015 they plan to add 10 more domestic facilities to their portfolio, with plans to expand Internationally. While the expansion forecasts suggest that the company is utilizing a large wholesale collocation provider, the truth is that they build, own and operate their own Edge Data Centers, which range in size from 15,000 to 80,000 square feet and have a power offering of 2 megawatts to upwards of 8 megawatts. They claim that the five major peering points today are obviously not under-served. It is the tier 2 markets where data centers are either not built to handle the power density needs of their customers or the existing data centers are built in the wrong place. EdgeConneX appears to be the first data center company with a site selection process hyper-focused on proximity to the user.
EdgeConneX concentrates on Edge Data Centers, helping content providers collocate as close to areas with a high concentration of users as possible. They serve the very big content providers, cable companies and content delivery networks. ”It is all about latency and getting content closer to the eyeballs”, Clint noted. “We are a layer zero neutral data center provider that allows broadband or wireless Internet service providers to connect their ‘eyeballs’ to any type content without latency on any device. Ten years ago it didn’t matter how email got from point A to point B. Email tolerated latency, complex network designs and cross country distances. Today, it matters where you serve HD Video from and tomorrow it will matter where you process data within a connected car even more. Proximity matters more now than ever before and it is largely ignored by the marketplace, which has decided to double down in it’s campus environment architecture situated in 5 markets. We are creating the Internet of Everywhere by building Edge Data Centers in markets previously ignored and desperately under-served. For instance, Nashville’s Internet consumption in 2013 equaled that of Washington D.C. and surrounding regions in 2009 and Pittsburgh’s consumption was double that of D.C. Prior to EdgeConneX, all of those locations received their Internet content from Northern Virginia. Once again, that was fine for email but I think we would all agree that content is a bit more robust these days than text based email. Finally, let’s clarify the ‘edge’ since so many companies have jumped on the bandwagon now that we have defined the market. Five or ten markets getting served doesn’t create an ‘edge’. Creating an ‘edge’ requires critical mass and that means addressing underserved markets from coast to coast. The 30 Edge Data Centers that we have completed or in process have created an ‘edge’ Nationally and content only needs one ‘edge’ in each market” Clint added.
Initially the idea of an Edge Data Center sounds similar to a CDN. However, instead of providing caching servers, EdgeConneX provides high-grade colocation space, or “Layer 0,” as the company calls it. “We ourselves are not a CDN,” Clint said. “We place infrastructure as close as possible to consumers of content. We then provide management of the data center and offer our customers a patented Data Center Operations Management System, EdgeOS, that provides customers with a single view into every Edge Data Center nationwide, with full visibility to the rack and component level.”
EdgeConneX didn’t stop innovating in the traditional data center areas. They attacked the business model while they were at it. In Clint’s words, “they blew it up”. The company combined the favorable economics found in wholesale models (per kW pricing and $0 intra-facility cross-connects) with the sizing associated to retail models (multi-rack options versus multi-megawatt deployments). Customers get a transparent price for kW’s on a National basis, and soon on a global basis. EdgeConneX also cools customer racks at no fee, effectively offering a PUE of 1.0 and can support racks generating in excess of 20kW without the need for adjacent ghost space.
CDNs themselves have proven to be an ideal customer. The largest CDN provider, Akamai, is present across the EdgeConneX footprint and has also invested in the company. An EdgeConneX Edge Data Center typically serves over 50% of that market’s ‘eyeballs’ with over 75% of the Internet, by usage, locally.
Unique Site Selection Criteria
Their site selection is not always where other data center providers are located, even those specifically serving secondary markets, Clint said.
Opening up an Edge Data Center can be a risky proposition. But every facility that the company builds is EBITDA positive from the start, Clint said. That’s because EdgeConneX has perfected how to work with the right companies to bring a new market online and create another node in the Internet of Everywhere. EdgeConneX often acquires and modernizes existing facilities that meet various selection criteria. It goes through the selection process in less than a week and moves along the permit process almost immediately, producing an operational Edge Data Center in approximately four months. To meet these demanding timelines, the company maintains a strict focus on automation and has built a proprietary tool that maps every fiber network and broadband provider location to over 10,000 buildings that are prequalified to buy and repurpose.
The company builds out in increments of about 2 megawatts. The ability exists to at least double that exists in every market and in some cases can offer over 8 megawatts, according to Clint.
Edge Data Centers: The Answer to the Internet’s Problems
The future of the DVR is in the cloud. You are either utilizing this new technology or will be soon. Early pilots of Cloud DVR (CDVR) ran into an array of problems. The first started with two failed assumptions. First, the Cloud didn’t have to be ‘local’ and the second, current space owned by the various broadband providers could facilitate these new technologies. In the first case, a pilot test found that sending HD Video over regional or further distances either brought the network to it’s knees or delivered a terrible experience or both. The response to the technology was remarkable and deemed a success, but the experience had to be improved resulting in the need for local deployments. In the second case, the locally owned facilities were found to be inadequate or non-existence (i.e. there was no space). And on a subtle note, the provider’s space was not neutral, creating the possibility of future problems, which the FCC continues to tackle. The conclusion was relatively straightforward, but in many ways extremely complex. Neutral data centers would need to be built across the US that were capable of serving incredibly power dense racks, while utilizing a new business model and solving a problem that the current data centers ignored. One year later, at a pace never attempted before, EdgeConneX identified 20 unique data center markets and became is the largest provider of N+1, concurrently maintainable data centers in the US.
The problem it addressed, Clint said, was the space either didn’t exist, or was low-grade legacy Telco space. “CDNs are having the same issues,” he said. “A current wireless carrier customer had racks in a closet next to a broom and mop.”
What was available didn’t work. “The power was wrong; the cooling was wrong; the power density and power per rack were wrong. Some had enough space and some didn’t. An infrastructure needed to be created that could handle this massive shift to the cloud and the technology supporting it. That was the start of our Edge Data Centers.”
Edge Data Centers have quickly become a universal need. “The Internet was moving at a lightning pace in the 90s, but it’s infrastructure hadn’t evolved along with it. Two years ago the edge was an idea for conversation, it made theoretical sense but also spurned quite a bit of debate. I think you can definitively say in 2015 that the edge has become a reality,” Clint said.
EdgeConneX investors include Akamai, Cox, Ciena and Comcast, as well as several other strategic firms, VC’s and Private Equity firms. Their customers include the dominant companies in the world for Internet content, CDN, Cloud, Fiber, Gaming, Video Streaming and ISP’s. According to Heiden, what’s been extremely interesting to watch is the emergence of new verticals that are clamoring for a unified yet geographically dispersed data center infrastructure. It’s his belief, that in the future, every company will be a content company. Much the same way that Honda is an engine company most recognized for it’s cars, financial services companies will be most recognized for their ability to provide a safe and simple online transaction, as well as a portal to a user’s ‘content’ or account information.
Changing the Dynamics of a Region’s Internet Connectivity
Clint told us that when they began serving Phoenix that the combination of bandwidth and content in their Phoenix Edge Data Center changed the dynamics of the Internet for the city. Instead of queries going to Los Angeles and back, the majority of the queries stayed in Phoenix, significantly reducing latency and backbone traffic. In addition each end users throughput went up 30%.
These dramatic changes happened almost overnight and created a “local internet” because the content and eyeballs were all in the same place – the EdgeConneX Phoenix Edge Data Center. Effectively, the Internet was moved from Los Angeles to Phoenix. This same phenomenon is happening around the country in under-served markets such as Salt Lake, Houston, Pittsburgh and, believe it or not, Boston. The impact is three-fold. First, there is a reduction of cost component in regards to a lack of reliance on long-haul networks. Secondly, those long-haul networks typically introduce complexity through multiple interconnection points and networks, sometimes bringing security concerns into play such as DDOS attacks. Finally, there are performance gains, or said differently; the end-user has a far better experience. The result of that experience (i.e. increased throughput) results in increased consumption and ultimately more revenue for the content companies, creating a stronger consumer loyalty to the ISP’s.
Network Connectivity to Edge Data Centers
Network Connectivity is essential in rounding out the eco-system that is present in every Edge Data Center. EdgeConneX recently signed a deal with international Bandwidth Infrastructure provider Zayo Group Holdings, Inc. to deploy fiber to the EdgeConneX national footprint, providing dark fiber, wavelength and IP services for customers. The company has a similar arrangement with the recently rebranded ELI, formerly Integra Telecom.
Through this deal, Zayo will build diverse entrances into Edge Data Centers nationwide and provide diverse entrances to each facility. Zayo fiber will become available to Edge Data Center customers immediately in Atlanta, Denver, Las Vegas, Memphis, Nashville, Portland, Richmond, Salt Lake City and San Diego. These new markets join Houston and Phoenix Edge Data Centers, which already offer Zayo connectivity. Customers can access pricing and place orders for connectivity to all of these Edge Data Centers through Tranzact, Zayo’s shopping platform. Clint added, “Zayo came to us believing the edge is here and that’s why they did these builds.” Dan Caruso, CEO of Zayo, is on record saying, “EdgeConneX is doing some great things for the industry, and is bringing much passion to the endeavor. Zayo looks forward to working with you in 2015”.
In addition to Zayo and ELI (Integra Telecom), EdgeConneX has secured regional or national deals with Alpheus, AT&T, CenturyLink, Cogent, Comcast, Cox, DQE, FiberLight, Fibertech, FirstLight, Level 3, PEG Bandwidth, SummitIG, Sunesys, TelNet Worldwide, TW Tel (now Level 3), US Signal and XO.
What’s Next for the Edge?
The company began defining the Internet of Everywhere because that’s where it believes the Edge is headed. However, the firm is very disciplined in it’s focus and wants to ensure that the massive infrastructure it’s brought to the US is done so in a matter that exceeds expectations. That’s a tall order when you think about the primary customers EdgeConneX works with, which happen to be some of the most demanding customers anywhere in the world. Having said that, Clint notes that the Edge is impacting new verticals and new markets (globally) almost daily and they are prepared to grow as fast as the Edge does. Should be fun to watch this story play out.