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Analyst Day              Presented on November 11, 2010
Today’s Agenda  12:00 – 1:00 Luncheon (optional)  1:00   –   1:15   Welcome and introduction, Steve Smith  1:15   –   1:45...
Public Disclosure Statement Forward-Looking Statements   Except for historical information, our presentation today contain...
Analyst Day               Steve Smith, CEO              Presented on November 11, 2010
The MarketKey Business Drivers Supporting Growth to $2B                                                                   ...
Global Partner For GrowthServe Customers Around The Globe     Deliver Customer Value                  Business Strategy At...
Accelerate Global Reach and ScaleBroadest and Deepest Coverage in the Industry                                            ...
Improve Customer PerformanceThrough InterconnectionCollaborate Under One Roof                                             ...
Deepen Existing and GrowNew EcosystemsInnovative Exchanges Accelerate Commercial Growth                               Busi...
Streamline Ease of Doing BusinessGloballyConsistency of Experience Working with Equinix                        EUROPE     ...
Expand Vertical Go-to-Market PlanLeverage Benefits of Platform Equinix     NETWORK                                 FINANCI...
Business Strategy-at-a-Glance                                                                         5      Expand vertic...
Analyst Day                Keith Taylor, CFO              Presented on November 11, 2010
Robust Growth & Profit Story Global historical and projected financials                                                   ...
Disciplined Expansion Strategy      Revenue and cabinet capacity                                                          ...
Attractive Unit Economics  US “same IBX” (1) Q3 annualized                                                                ...
Proven IBX Development Profile NY4 annualized financial performance                                                       ...
Fixed and Predictable Cost Model                                                                            PREDOMINANTLY ...
Low Ongoing CapEx Requirements                                                    110                                     ...
Improving Discretionary Cash Flow Discretionary free cash flow(1)                                                         ...
Favorable Comparison With REITs Q3 2010 annualized($M)                Cash Flow                                           ...
Flexible Capital Structure             ($M)              Cash, Cash Equivalents & Investments             $         715   ...
Growth Enabling Debt Capacity       Net leverage(1) & debt capacity                                                       ...
Emphasis on Creating ShareholderValue                               ORGANIC EXPANSION                                    I...
Platform           Jarrett Appleby, CMO              Presented on November 11, 2010
Global Digital Economy  Entering the Zettabyte Era                                                         2020           ...
The Network Effect             70                     Mobile                                                              ...
The Mobile Data EffectImpact of 3G and 4G/LTE traffic                      25                                             ...
The Application Effect   BUSINESS CRITICALITY                               Best Effort           Priority      Real-Time ...
Supply and Demand Imbalance                                                            16%                                ...
Equinix Market Opportunity                    Gartner Retail Colocation Market(1)                                        T...
Global Competitive Capabilities             90                                            9                               ...
Platform EquinixSM                       35 markets                                                              ECOSYSTEM...
Equinix IBX® Data CentersThe foundation of Platform Equinixsm        IBX   Capacity                          IBX          ...
Reach Customers Around the World                                   MARKET CHALLENGE                                   Expa...
Deploy for Performance and SavingsMulti-Tiered Architecture                        Server Farms                           ...
IBXInternational Business ExchangeAccess a wide choiceof service providers,partners, andcustomers within anyone of Equinix...
Customer Segmentation ChangesWorldwide revenue base (Q2 2010)                 100%                 90%                    ...
Global Vertical Segment TrendingMonthly recurring revenues by vertical                                             SDXC cl...
Business ObjectivesMulti-year business plan by vertical customer             6,000                      Cloud & IT Service...
Platform EquinixEcosystems                              Networks    Financial Exchanges                     Content & Digi...
Measuring the Platform EffectInterconnection business trends                  90,000                                      ...
Equinix MarketplaceConnecting buyers & sellers   Enhances ease of doing business: Provides services transparency          ...
Analyst Day                  Pete Ferris, CSO              Presented on November 11, 2010
CSO Mission  1   Build a strong team to sell and serve      customers globally                      IMPACT                ...
The Value of Platform Equinix     All Equinix Customers     Deployed in            18% of customers     Multiple Metros   ...
The Value of Ecosystems                Interconnection Revenue By Region  $50,000  $45,000  $40,000  $35,000              ...
The Broadest and Deepest Coverage in the IndustryAccelerate Through Platform Equinix   ASIA-PACIFIC                       ...
Business Applications:Latency Matters                             Latency          Typical                         Compuwa...
Critical/Real-time ApplicationsDrive Distributed ArchitecturePerformance Requires Proximity to Major Population Centers   ...
Bechtel Leverages Platform EquinixReduce Cost, Improve Performance for Employees                                          ...
Facebook Leverages Platform EquinixFacebook and Zynga Interconnect to “Sell Pigs Faster”                                  ...
Regional Overview        Charles Meyers, President North America                            Presented on November 11, 2010
North America Performance  Strong improvements across key performance indicators                                          ...
StrengthsMarket Leader in North AmericaInterconnection    • Interconnection leader in North America                       ...
Footprint Fueling GrowthUnmatched reach and strategic capacity in keymetros are driving success across target verticals   ...
North American Competitive SegmentationEquinix is increasing distance from competitionEquinix Advantage:       NETWORK-NEU...
IBXs are Rich Interconnected Communities                                           59
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Transcript of "Request-EquinixAnalyst(2)"

  1. 1. Analyst Day Presented on November 11, 2010
  2. 2. Today’s Agenda 12:00 – 1:00 Luncheon (optional) 1:00 – 1:15 Welcome and introduction, Steve Smith 1:15 – 1:45 Financial perspectives, Keith Taylor 1:45 – 2:15 Platform Equinix and go-to-market strategy, Jarrett Appleby 2:15 – 2:40 Global sales strategy, Pete Ferris 2:40 – 3:00 BREAK 3:00 – 3:25 North America regional update, Charles Meyers 3:25 – 3:50 Europe regional update, Eric Schwartz 3:50 – 4:10 Asia-Pacific regional update, Samuel Lee 4:10 – 4:25 Financial ecosystems, John Knuff 4:25 – 4:40 Network, mobility and content ecosystems, Jim Poole 4:40 – 5:00 Closing comments and Q&A, Steve Smith (joined by Keith and others) 5:00 – 7:00 Cocktail reception (optional) 2
  3. 3. Public Disclosure Statement Forward-Looking Statements Except for historical information, our presentation today contains forward-looking statements which include words such as “believe,” “anticipate” and “expect.” These forward-looking statements involve risks and uncertainties that may cause Equinix‟s actual results to differ materially from those expressed or implied by these statements. Factors that may affect Equinix‟s results are summarized in our annual report on Form 10-K filed on February 22, 2010 as well as our quarterly reports on Form 10-Q filed on April 28, 2010, August 4, 2010 and October 29, 2010. Equinix assumes no obligation and does not intend to update forward-looking statements made in this presentation. Selected results within this presentation include results from the Switch and Data acquisition, which closed on April 30, 2010. Non-GAAP Information This presentation contains references to certain non-GAAP financial measures. For definitions of the non-GAAP terms and a detailed reconciliation between the non-GAAP financial results presented in these slides and the corresponding GAAP measures, please refer to the appendix at the end of this presentation. In addition, for a detailed discussion as to why Equinix uses these non-GAAP financial measures, please see Equinix‟s Form 8-K filed with the SEC on October 26, 2010. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward- looking data. 3
  4. 4. Analyst Day Steve Smith, CEO Presented on November 11, 2010
  5. 5. The MarketKey Business Drivers Supporting Growth to $2B 39x IMPACT BY 2014* MOBILE TRAFFIC: Double every year through 2014 5x VIDEO: >90% of consumer traffic 4x IP TRAFFIC: 12B 3x DVDs/month SOCIAL NETWORKING: ‟08 ‟09 ‟10 ‟11 ‟12 „13 Twitter and Facebook get more searches per dayMobile platform usage skyrocketing – 39x than GoogleVideo and real-time applications growth - 5x GLOBALIZATION: NAIP traffic growth – 4x business IP traffic 2.3 exabytes/month. WesternMassive Shift to Virtualization and the cloud – 3x Europe business IP trafficData Center Power requirements 2.2 exabytes/month.Globalization of business CLOUD**: 3X revenue growth * Cisco VNI, June 2010 ** Gartner, 2009 5
  6. 6. Global Partner For GrowthServe Customers Around The Globe Deliver Customer Value Business Strategy At-A-Glance• Drive • Accelerate Global Reach and Scale – Global Strategy • Improve Customer Performance• Accelerate – Business Performance Through Interconnection• Boost • Deepen Existing and Grow New – Revenue Growth Ecosystems• Simplify • Streamline Ease of Doing Business – Infrastructure Management with Equinix Globally• Enable • Expand Vertical Go-To-Market – Business Expansion Plan CONFIDENTIAL 6
  7. 7. Accelerate Global Reach and ScaleBroadest and Deepest Coverage in the Industry IMPACT SINGLE GLOBAL PARTNER for consistency and simplicity THE RIGHT NETWORKS in the right markets for performance GLOBAL EXPANSION to meet market demand LEGEND: EQUINIX METROASIA-PACIFIC NORTH AMERICA EUROPE• 5 Metros • 22 Metros • 8 Metros• 250+ Available Networks • 450+ Available Networks • 175+ Available Networks• 700+ Customers • 2,200+ Customers • 800+ Customers CONFIDENTIAL 7
  8. 8. Improve Customer PerformanceThrough InterconnectionCollaborate Under One Roof IMPACT FINANCIAL CLOUD SERVICE PROVIDERS PROVIDERS CHOICE facilitates competitive advantage in innovation PROXIMITY to partners CONTENT and suppliers improves ENTERPRISE PROVIDERS performance CROSS CONNECTS accelerate deployments and reduce cost NETWORK SERVICE MOBILE PROVIDERS CONFIDENTIAL 8
  9. 9. Deepen Existing and GrowNew EcosystemsInnovative Exchanges Accelerate Commercial Growth Business Exchanges IMPACT Cloud and SaaS Providers IDENTIFY partners with Electronic Trading the right assets in 35 global markets Mobile App Exchange ENGAGE 3,700 customers and suppliers with a trusted introduction EXCHANGE physical traffic on one platform to remove barriers Traffic Exchanges Internet Exchange Carrier Ethernet Exchange Mobility Exchange CONFIDENTIAL 9
  10. 10. Streamline Ease of Doing BusinessGloballyConsistency of Experience Working with Equinix EUROPE IMPACT NORTH AMERICA DEPLOY in global locations with certified technical support ASIA-PACIFIC MANAGE global infrastructure with a single online portal MONITOR traffic and equipment from a central location DEEPEN relationships with customers: consistent, SmartHands® intentional, differentiated Portal Monitoring CONFIDENTIAL 10
  11. 11. Expand Vertical Go-to-Market PlanLeverage Benefits of Platform Equinix NETWORK FINANCIAL PROVIDERS SERVICES IMPACT Expand salesforce globally Increase coverage of global accounts Deepen penetration of ecosystems Focus on applications that take advantage of network density and global platform CONTENT, GAMING CLOUD ENTERPRISE & VIDEO COMPUTING CONFIDENTIAL 11
  12. 12. Business Strategy-at-a-Glance 5 Expand vertical go-to-market plan Focus on applications that value EQIX Driving the Next differentiation: interconnection, global, reliability Wave of Growth 4 Streamline ease of doing business globally Global product, pricing and contracts harmonization 3 Deepen existing & grow new ecosystems Innovative exchanges to accelerate commercial growth 2 Improve customer performance through interconnection Proximity to partners and suppliers1 Accelerate global reach & scale Build an unrivaled global data center footprint Targeting $2B+ to power the interconnected world in Revenues. CONFIDENTIAL 12
  13. 13. Analyst Day Keith Taylor, CFO Presented on November 11, 2010
  14. 14. Robust Growth & Profit Story Global historical and projected financials 2,000+ 1,500 2007 – 2011E CAGR Revenues: 38% 50% Adjusted EBITDA: 44% 46% 1,217 45% 45% Impacted by FX volatility 42% 37% 1,000+ 2011E YOY REVENUE($M) 883 GROWTH 23% AND 705 ADJUSTED EBITDA 675 GROWTH 25% 542 Revenue growth 419 409 pro-forma for SDXC for full year 2010 16% 292 155 TARGETING $2B+ REVENUE AND $1B+ ADJUSTED EBITDA (1) (1) (2) 2007 2008 2009 2010E 2011E Target Revenue Adjusted EBITDA Adjusted EBITDA Margin(1) 2010E and 2011E based on guidance announced on 10/26/10. Guidance for 2011 is >$1.5B revenue and >$675M Adjusted EBITDA(2) Target = LTOP (Revenue capacity assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing) + $200M in incremental capex to create capacity for $100M incremental revenues to meet $2B+ target revenue opportunity 14
  15. 15. Disciplined Expansion Strategy Revenue and cabinet capacity MAINTAIN OUR Revenue DISCIPLINED Capacity $935 $1,200 $1,450 $1,800 $1,900 EXPANSION STRATEGY ($M)(2) CONTINUALLY ASSESS 94,000 Announced COMPETITIVE AND 85,100 8,900 (+10% vs. Q310) MARKET DYNAMICS 10,500 AP DELIVER INVENTORY “JUST-IN-TIME” 61,700 60,800 28,100 EU 53,500 73% MARKETS TARGETED 44,200 47,900 FOR FUTURE 42,800Cabinet (1) 79% EXPANSION:Capacity 34,200 80% NA: Toronto, Philadelphia, 77% Seattle Cabinets 46,500 NA Billing EU: Amsterdam, Frankfurt OWNED IBXs (11)Utilization REPRESENT 22% OF REVENUES AND 23% 2007 2008 2009 Q310 2011 E OF CASH GROSS Annual Exp (3) (4) PROFIT IN Q3 2010 CapEx $333 $380 $306 $460 $300+ ($M) Future phases contemplated in owned IBXs Cab Capacity 9,300 7,300 10,300(5) 8,900 Adds(1) Cabinet capacity includes cabinets added through acquisitions in addition to organic expansions(2) Revenue capacity assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing(3) Mid-point of expansion capex for FY10 announced on October 26, 2010(4) ~$400M of capex for FY11 announced on October 26, 2010, of which $300M+ estimated to be expansion capex(5) Excludes SDXC cabinets of 14,000 15
  16. 16. Attractive Unit Economics US “same IBX” (1) Q3 annualized INCLUDES ALL EQUINIX ORGANIC IBXS OPENED PRIOR TO Q3 2009(1) 620 461 SAME IBX PORTFOLIO OPERATING WITHIN LTOP(2) MODEL ASSUMPTIONS (17) 19 US IBX data centers with($M) an average age of 6.1 years ~33% Annual cash Current average utilization of 86% generation on investment(4) TRACKING AGAINTS OUR IRR PROJECTIONS (1,420) STRONG DEMAND AND RESULTS FOR “LEGACY” Invested Revenues 74% Ongoing IBXs DUE TO NETWORK Capital 44% of Cash CapEx DENSITY AND ROBUST (Gross Investment Gross 3% of ECOSYSTEMS PP&E) (3) Profit Revenues Margin First 8 US IBXs at ~90% utilized with nearly 7% year- over-year revenue growth in Q3(1) Includes the following IBXs: LA1, LA2, LA3, NY1, NY2, NY4, SV1, SV2, SV3, SV4, CH1, CH2, CH3, DA1, DC1, DC2, DC3, DC4, DC5; Includes capital and revenues from 200 cabinet expansion in Chicago 2 IBX and excludes capital from LA1 phase II and NY 4 phase III and IV; Switch and Data locations also excluded(2) LTOP = Long-term operating plan: Assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing(3) Investment (Gross PP&E) includes real estate acquisition costs, capitalized leases and all ongoing capex associated with same IBXs since opening(4) Cash generation on gross investment calculated as Q3‟10 Cash Gross Profit annualized divided by Gross PP&E as of Q3 balance sheet 16
  17. 17. Proven IBX Development Profile NY4 annualized financial performance PHASED INVESTMENT $280M investment over 4 ($M) 53% phases; phase 4 currently under construction 41% 74 CASH FLOW BREAK- EVEN 55 Cash-flow break-even 26% 47 within 3 quarters and at ~15% utilization 33 26 MARGIN EXPANSION 12 Q3 Annualized Revenues of 0% ~$74M Q3 Annualized Cash Gross Profit of $55M or 74% Q3 07 Q308 Q309 Q310 (5) (1) Revenue Cash Gross Profit Utilization(1) Utilization calculation assumes full cabinet capacity for Phases I, II, III and IV from opening 17
  18. 18. Fixed and Predictable Cost Model PREDOMINANTLY Consumables FIXED COST and Other STRUCTURE 12% Maintenance Labor REASONABLY 4% 33% PREDICTABLE Outside VARIABLE COSTSCash ServicesOperating 6% Power and variableCosts (Q310) compensation POWER COST Power MANAGEMENT: 24% Rent Drive towards energy efficiency 19% Deregulated energy market costs proactively managed Risk managed via customer contract 16% 15% LOW ONGOING 14% 14% 14% 14% 15% MAINTENANCE OPEXPower Cost 13% 13% AND CAPEXas a % of 13% 12% REQUIREMENTSRevenues Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 18
  19. 19. Low Ongoing CapEx Requirements 110 <100 ONGOING CAPEX (INCLUDING($M) INSTALLATION AND < MAINTENANCE) 68 63 EXPECTED TO TREND DOWN TO 5% OF 44Ongoing REVENUES OVER TIME 31CapEx Trend 20 ASSET USEFUL LIFE EXPECTED TO BE 2005 2006 2007 2008 2009 2010E 2011E GREATER THAN 20 YEARS WITH LOW REINVESTMENT RATE REQUIRED Maintenance & SPOF 27% Installation MAINTENANCE PORTION 37% OF ONGOING CAPEX2010E CONTINUES TOOngoing CapEx DECREASE AS ABreakdown PERCENTAGE OF REVENUES (PREDOMINANTLY S&D Ongoing SINGLE POINTS OF 18% FAILURE – SPOF) IT New Product 9% Innovation 9% 19
  20. 20. Improving Discretionary Cash Flow Discretionary free cash flow(1) 400 2008 – 2011E DFCF >$1.1B ($M) 292 200 250 68% 72% 2011E DFCF >25% OF PROJECTED 49% 68% 43% 59% REVENUES 46% 76 48 44 DFCF PROVIDES CASH FLOW TO RE- 2005 2006 2007 2008 2009 2010E (2) 2011E (3) INVEST IN GROWTH OF THE BUSINESS Discretionary Free Cash Flow Discretionary Free Cash Flow as a % of Adjusted EBITDA FEDERAL NOLs OF DFCF Per Share(4) ~$300M, PLUS $2.00 $1.54 $2.34 $4.81 $7.37 $5.35 $8.56 SUBSTANTIAL STATE AND FOREIGN TAX LOSS BALANCES(1) Discretionary Free Cash Flow is defined as “Cash Generated from Operating Activities” less “Ongoing CapEx”(2) 2010E includes cash interest from HY debt financing and increased investment in ongoing CapEx(3) 2011E based on 2011 guidance for Adjusted EBITDA less estimated cash interest, working capital, other costs and ongoing CapEx(4) Based on Weighted Average Shares Outstanding of: 24.0M in 2005; 28.8M in 2006; 32.6M in 2007; 41.6M in 2008; 39.7M in 2009; and 46.7M in 2010E and 2011E 20
  21. 21. Favorable Comparison With REITs Q3 2010 annualized($M) Cash Flow Cash Flow Per Share Net Leverage(3) 5.0x 586 $12.54 528 3.5x 440 $9.42 367 2.4x $5.85 151 121 $3.24 $1.83 $1.48 (1) (2) (1) (4) (2) (4) (3)Adjusted EBITDA FFO Adj. EBITDA /Share FFO /Share Net Leverage EQIX DLR DFT EQIX DLR DFT EQIX DLR DFT • Strong cash flow metrics • Meaningful value creation for • Substantial capacity to scale regardless of methodology investor – expect adjusted with leverage - benefit EBITDA and FFO to scale accreting to equity holders • Favorable profile relative to with growth REITs in data center space • DFCF generation augments ability to scale(1) Adjusted EBITDA for EQIX is defined as income from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges and acquisition costs. Adjusted EBITDA for DLR as reported in Q3 2010 press release. Adjusted EBITDA for DFT calculated as “Operating Income” before “Depreciation and Amortization.”(2) Funds from Operations (FFO) for EQIX is defined as income or loss before income taxes plus depreciation, amortization, accretion, stock-based compensation, restructuring charges and acquisition costs and further adjustments for other unusual items, such as gains on asset sales, other than temporary impairment losses or recoveries on investments and losses on debt extinguishment and interest rate swaps, net. FFO for DLR and DFT are as reported in the respective Q3 2010 press releases(3) Net Leverage = Total Debt Less Cash / Annualized Adjusted EBITDA for Q3 2010(4) Per share data for EQIX calculated from weighted average diluted shares as of Q3 2010 of 46.7M diluted shares. Per share data for DLR and DFT are as reported for “Weighted averaged common stock and units outstanding – diluted” and “Total Common Shares and Units – diluted” in the Q3 2010 press releases, respectively.Sources: EQIX – Internal calculations; DLR – Q3 2010 Press Release dated November 4, 2010; DFT - Q3 2010 Press Release dated November 3, 2010 21
  22. 22. Flexible Capital Structure ($M) Cash, Cash Equivalents & Investments $ 715 Total Debt $ 2,132 STRONG BALANCE SHEET – CASH & Total Stockholders Equity 1,854 CAPITALIZATION(1)Capitalization Total Capitalization $ 3,986 FAVORABLETable (Q310) LIQUIDITY PROFILE Total Debt / Total Capitalization 53% DEBT Net Debt / LQA Adjusted EBITDA 2.4x RESTRUCTURING TO BE CONSIDERED: Ashburn mortgage repayment (LTV 12% High Yield Debt and inflexible debt ($M) 998 structure) Convertible Debt 2012 2.5% Convertible Mortgage, Bank Facilities & Capital Leases cash settlement (future dilution)Debt Maturity 451 408 304 Other convertible debtProfile (Q310) 25 52 58 45 35(1) Blended cash interest rate of 5.8% 22
  23. 23. Growth Enabling Debt Capacity Net leverage(1) & debt capacity MANAGE LEVERAGE 1,911 TO MAXIMIZE SHAREHOLDER 3.6x VALUE WHILE DRIVING DOWN COST OF CAPITAL. CONSIDER: 2.6x 2.1x Asset purchases where appropriate($Millions) 947 951 Look to extend term of customer contracts 675 1.5x Continue to educate credit 550 542 rating agencies 481 409 DEBT CAPACITY CAN FUND FUTURE (2) GROWTH 2009 2010E 2011E LTOP Adjusted EBITDA MAINTAIN HIGHLY Incremental Debt Capacity @ 3.5x Net Debt to Adjusted EBITDA FLEXIBLE CAPITAL Current Net Debt / Projected Adjusted EBITDA STRUCTURE (1) Net Leverage = Total Debt Less Cash / Annualized Adjusted EBITDA for Q3 2010; LTOP; 2011E and LTOP Net Debt as at Q3 2010 (2) LTOP = Long-term operating plan: Assumes current IBX data center footprint plus announced expansions reach full capacity (~95%) at current pricing 23
  24. 24. Emphasis on Creating ShareholderValue ORGANIC EXPANSION IBX footprint growth Organic Product innovation Expansion / Product Innovation M&A New markets expansion Strategic fit and complementary to existing portfolio Capital DEBT REPAYMENT Shareholder Allocation M&A Repatriation Debt repayment Choices Improve flexibility and lower cost SHAREHOLDER REPATRIATION Share repurchase (within terms Debt of HY indenture) Repayment Drive EPS growth 24
  25. 25. Platform Jarrett Appleby, CMO Presented on November 11, 2010
  26. 26. Global Digital Economy Entering the Zettabyte Era 2020 GARTNER FORECAST: HYPERDIGITIZATION OF THE ECONOMY 2009 WILL REACH ~25% 0.8 ZB OF GDP BY 2020 35 ZB* TB = Terabyte (1000 GB) PB = Petabyte (1000 TB) EB = Exabyte (1000 PB) ZB = Zettabyte (1000 EB) The Digital Universe will grow 44x by 2020 IDCSources: IDC, May 2010; The Digital Universe Decade – Are You Ready?,*Gartner, Aug 2010: Hyperdigitization Creates Major Opportunity for IT Service Providers 26
  27. 27. The Network Effect 70 Mobile GLOBAL IP 60 Managed IP traffic increases 4x 50 Internet MOBILE DATA traffic increases 39x EB/Month 40 BUSINESS IP 30 traffic grows 21% ETHERNET SERVICES 20 market will nearly double to $41B by 10 2014 Ovum 0 2009 2010 2011 2012 2013 2014Massive increase in network traffic reflects customer needs to use, share and distribute content, applications and data.Sources: Cisco VNI June 2010; Ovum, Sep 2010: Ethernet service volumes, revenue history and forecast, 2008-2015 27
  28. 28. The Mobile Data EffectImpact of 3G and 4G/LTE traffic 25 200 3G 180 4G/LTE 20 2G 160 3G 140 2G Mbps in Millions Mbps in Millions 15 120 100 10 80 60 5 40 20 0 0 Significant growth in 3G mobile data. Immense growth in 4G/LTE network traffic.Source: Ovum, March 2010: How will mobile backhaul evolve with move to higher radio access speeds? 28
  29. 29. The Application Effect BUSINESS CRITICALITY Best Effort Priority Real-Time Proximity >100ms <100ms < 50ms < 5ms >2000km < 2000km < 500km < 50km LATENCY SENSITIVITY Performance matters for end user experience 29
  30. 30. Supply and Demand Imbalance 16% 15% DESPITE NEW 14% CONSTRUCTION, 13% CAPACITY HAS BECOME MORE CONSTRAINED IN 2010 9% 7.5% “Through 2013, 7% data center Power, 6.5% Cooling and Space problems will 4.5% Demand Delta increase rapidly as 3.5% a result of new Supply Delta high-density infrastructure deployments”. 2009 2010 2011 2012 2013 Gartner March 2010Source: Tier 1 Research: Multi-Tenant DataCenter Supply September 2010; Telegeography Colocation Survey Report October 2010 30
  31. 31. Equinix Market Opportunity Gartner Retail Colocation Market(1) Tier 1 Research Internet Infrastructure Market(2) 9000 8% North America CAGR 8000 EMEA 60000 Rest of Internet ($32B) Infrastructure Market AP 7000 Interconnection ($0.6B) 50000Revenue $M Revenue $M 6000 Colocation ($18B) 40000 5000 4000 30000 3000 20000 2000 19% 10000 CAGR 1000 0 0 2009 2010 2011 2012 2008 2009 2010 2011 2012 Equinix estimates its target market to be growing 12-14% reaching $19B in 2013 Sources: Gartner, Colocation Market Numbers October 2010 (unpublished). Tier 1 Research: Internet Infrastructure Market Overview Spring 2010 (1) Asia-Pacific market only includes China, Singapore and Australia; (2) Rest of Infrastructure includes CDN, Cloud and Hosting 31
  32. 32. Global Competitive Capabilities 90 9 95 7 27 24 30 15 10 28 +6m +1m +16m +1.9m +1.4m +1.6m +1.9m ~530k ~1.8m ~1.8m 3,700+ ~1,400 ~350 26 ~1,100 ~3,500 ~1,100 ~760 ~600 ~2,500 35 Cities # of Data Centers Capacity (sf) # of customers 11 Cities 11 Countries 11 Countries 9 Countries 13 Cities 12 Cities 13 Cities 12 Cities 8 Countries 7 Countries 7 Countries 9 Cities4 Continents 4 Continents 4 Continents 8 Cities 4 Continents 4 Countries 7 Cities 2 Continents 1 Continent 1 Continent 1 Continent 1 Continent 1 Continent 1 Country 1 Country 1 Country 2 Cities Leading global footprint in 35 markets and capacity with over 90 data centers located in strategic network, financial and business hubs around the world Source: Company reports 32
  33. 33. Platform EquinixSM 35 markets ECOSYSTEMS 11 countries Collaborate to accelerate 6M+ square feet 3,700 customers growth 600+ carriers strategic ecosystems GLOBAL REACH Reach your customers around the world DATA CENTERS Ample room for growth in reliable, network-rich sites Unique combination of data center capacity,global footprint, interconnections, and vertical ecosystems 33
  34. 34. Equinix IBX® Data CentersThe foundation of Platform Equinixsm IBX Capacity IBX IBX IMPACT Reliability –VIRTUAL CAMPUS Capacity to secure growth Reliability to protect customer experience Bandwidth choice for capacity and IBX performanceBandwidth Security for complete integrity of critical data IBX Security 34
  35. 35. Reach Customers Around the World MARKET CHALLENGE Expanding addressable market; ensuring consistent performance for global customers EQUINIX ADVANTAGE Asia Pacific 5 metros 250+ available networks North AmericaLEGEND: 22 metros EQUINIX METRO 450+ available networks Europe 8 Metros 175+ available networks 35
  36. 36. Deploy for Performance and SavingsMulti-Tiered Architecture Server Farms Best Effort Apps MARKET CHALLENGE Achieving high performance while optimizing investment Network Hubs IMPACT Priority Apps Network performance Reduced network cost 25% average cost Application Nodes reduction Reduced deployment risk Proximity Apps Application performance Proximity for real-time Real-Time Apps apps 15% faster page load times 80% less downtime End Users 36
  37. 37. IBXInternational Business ExchangeAccess a wide choiceof service providers,partners, andcustomers within anyone of Equinix‟s 90data centers Unique ecosystems in each IBX: replicating 35x in each market 37
  38. 38. Customer Segmentation ChangesWorldwide revenue base (Q2 2010) 100% 90% 25% 21% 80% 70% 16% 21% % of Revenue 60% Network 50% Content/Digital Media 22% 22% Financial Services 40% Cloud/IT Services 30% Enterprise/Reseller 25% 20% 37% 10% 11% 0% Old New 38
  39. 39. Global Vertical Segment TrendingMonthly recurring revenues by vertical SDXC close Network Financial Services Enterprise Content & Digital Media Cloud & IT Services Consistent, positive growth across all five verticalsCAGR is calculated based on September 2008, September 2009, and September 2010 MRR values 39
  40. 40. Business ObjectivesMulti-year business plan by vertical customer 6,000 Cloud & IT Services Content & Digital Media 5,000 Enterprise 1,000+ VERTICAL GROWTH Financial Services is based on winning Customers 4,000 Network & Mobility 600+ new customers and developing deeper, 897 1,200+ more global 3,000 partnerships with 453 existing accounts 2,000 965 1,500+ 369 241 662 1,000 451 316 1,000+ 790 461 - Long-Term Sep-08 Sep-10 Business Plan 1,950 customers 3,700 customers 5,300+ customers $578M Rev $1.2B Rev $2B+ RevCustomer counts are based on September 2008 and 2010. CAGR is based on year-end revenue values 40
  41. 41. Platform EquinixEcosystems Networks Financial Exchanges Content & Digital Media Cloud & IT Services Multi-National Enterprises Access to industry communities & partners 41
  42. 42. Measuring the Platform EffectInterconnection business trends 90,000 7000 GLOBAL CROSS- CONNECT AND 80,000 Global CC 6000 INTERNET EXCHANGE 70,000 GROWTH Global IX Capacity 5000 26% quarterly cross- IX Capacity (Gbps) Cross-connects 60,000 connect growth 50,000 4000 39% IX capacity 40,000 3000 growth 30,000 1 TB of traffic 2000 20,000 >6 TB capacity 1000 10,000 - 0 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Includes Switch and Data Metrics 42
  43. 43. Equinix MarketplaceConnecting buyers & sellers Enhances ease of doing business: Provides services transparency 43
  44. 44. Analyst Day Pete Ferris, CSO Presented on November 11, 2010
  45. 45. CSO Mission 1 Build a strong team to sell and serve customers globally IMPACT DRIVE REVENUE: large addressable 2 Add salespeople around the world market and differentiated model GLOBAL Hire with a focus on vertical market CUSTOMERS: 3 targets leverage benefits of Platform Equinix CUSTOMER 4 Achieve continuity and consistency SATISFACTION: loyalty through a across three regions seamless experience 5 Execute aggressively to a $2B+ plan 45
  46. 46. The Value of Platform Equinix All Equinix Customers Deployed in 18% of customers Multiple Metros 71% of revenue Deployed in 10% of customers Multiple Countries 54% of revenue Deployed in 8% of customers Multiple Regions 51% of revenue Multi-national customers generate more revenue and are more likely to renew Percentages are as of September 30, 2010 46
  47. 47. The Value of Ecosystems Interconnection Revenue By Region $50,000 $45,000 $40,000 $35,000 IMPACT $30,000 INTERCONNECTION: $25,000 15% of Global $20,000 revenue and growing $15,000 LOWER CHURN: $10,000 Customers with $5,000 higher interconnection are $- more loyal (000s) 2009 Q4 2010 Q1 2010 Q2 2010 Q3 North America Asia-Pacific EuropeSDXC consolidated as of 2010 Q2 (May) 47
  48. 48. The Broadest and Deepest Coverage in the IndustryAccelerate Through Platform Equinix ASIA-PACIFIC NORTH AMERICA EUROPE 5 Metros 22 Metros 8 Metros 250+ Networks 450+ Networks 175+ Networks In the Digital Economy, this is the territory of every global business LEGEND:IMPACT EQUINIX METRO In the Digital Economy, time and distance are measured by the speed of light … milliseconds matter Customers want to deploy in 10 markets without needing to use 10 vendors 48
  49. 49. Business Applications:Latency Matters Latency Typical Compuware ValidatesLatency Class Platform Equinix Tolerance Applications/Services Performance Financial applicationsProximity Primary/transactional storage MORE PREDICTABILITY < 5ms Real-time medical imagingCritical vs. Non-Critical < 50km radius Real-time analytics LESS VARIABILITY of High performance computing network performance Virtual desktop Network storage 27% MORE DIRECTReal-time < 50ms Transactional applications CONNECTIONSCentral vs. Distributed < 500km radius Private cloud (fewer network hops) Public cloud 17% FASTER global Enterprise applicationsPriority performance < 100ms Network backupsCore vs. Edge < 2000km radius Collaboration VoIPBest Effort Low-priority Web/HTTPPerformance vs. Best >100ms Email (Non-Cloud) >2000km radius Batch data archivalEffort Grid computing 49
  50. 50. Critical/Real-time ApplicationsDrive Distributed ArchitecturePerformance Requires Proximity to Major Population Centers IMPACTLEGEND Reliability and Coverage Real-time Workload < 50ms Satisfied End Users Priority Workload < 100ms Secure Revenue Streams 50
  51. 51. Bechtel Leverages Platform EquinixReduce Cost, Improve Performance for Employees IMPACT COST REDUCTION 25X for storage; 10X for network CONSOLIDATION 30+ private data centers to 3 EQIX sites PRIVATE CLOUD deployment eliminated software on individual servers “We decided we better bring the data to the network, rather than bring the network to the data.” Geir Ramleth, CIO of Bechtel 51
  52. 52. Facebook Leverages Platform EquinixFacebook and Zynga Interconnect to “Sell Pigs Faster” IMPACT PERFORMANCE faster page download due to global deployment INTERCONNECTIONS enable developers to cost-effectively deliver applications on Facebook NETWORK DENSITY AND CHOICE deliver content to consumers fast and inexpensively 52
  53. 53. Regional Overview Charles Meyers, President North America Presented on November 11, 2010
  54. 54. North America Performance Strong improvements across key performance indicators Cabs Billing & Revenues & Adjusted Weighted Avg. MRR per Interconnection (2) EBITDA (1) Cab (2)($M) Revenues Adjusted EBITDA Cabinets Billing Wt. Avg. MRR / Cab Cross-connects 52,723 50,764 $215.3 $2,004 $2,023 $2,048 $ 2,061 $191.6 $1,910 33,325 33,883 $144.5 $148.6$136.3 25,888 26,673 24,688 $97.9 $89.5 23,231 23,581 23,594 $75.5 $73.8 $68.0 Q309 Q409 Q110 Q210 Q310 Q309 Q409 Q110 Q210 Q310 Q309 Q409 Q110 Q210 Q310 1)Q2 financial results include Switch & Data Facilities Company, Inc. beginning May 1, 2010 2)Note Switch & Data Facilities Company, Inc. cabinet count and cross-connect count methodology not completely consistent with EQIX 55
  55. 55. StrengthsMarket Leader in North AmericaInterconnection • Interconnection leader in North America – 52,723 cross connects – Equinix organic growing at 20%; added 23,198 from SDXC acq. • Ashburn IBX is the most interconnected site in North America generating over $100M of adjusted EBITDA Q310 annualized • Interconnection revenue greater than all major competitors combined Ecosystems • Highest network density – >450 networks – >50 Points of Interconnection with major NA Mobile networks • Leading FX community in North America • Home to key magnet customers in Cloud Computing, SaaS, Social Networking and other high-value segments Infrastructure • 22 metros across the US & Canada • 57 IBXs with market leading reliability • Over $2B invested in top quality assets Growth • Investment in proven sales engine • Targeted capital outlays to maintain strategic inventory levels 56
  56. 56. Footprint Fueling GrowthUnmatched reach and strategic capacity in keymetros are driving success across target verticals 57 SITES 2,218 CUSTOMERS 22 METROS 46,500 SELLABLE CABS >90% OF THE US POPULATION WITHIN 10 MS LEGEND: EQUINIX METRO 57
  57. 57. North American Competitive SegmentationEquinix is increasing distance from competitionEquinix Advantage: NETWORK-NEUTRAL COLOCATION• Low latency Access to multiple• Network reach networks• Global footprint Deep technical MANAGED services SERVICES• Superior reliability• Ecosystem access Outsourced solutions for hosting/utility IN-SOURCING computing Commodity server farms at local power sources REITS Wholesale large tenants with limited services 58
  58. 58. IBXs are Rich Interconnected Communities 59
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