Gartner provides recommendations around Equinix CEO’s abrupt departure
By Ted Chamberlin
Tue, 30th Jan 2018
Data Center Interconnection
Data Centre Operators
FYI, this story is more than a year old
Most of you in the datacenter and colocation space have no doubt seen the news of Steve Smith's departure from Equinix.
We don't trade in speculation at Gartner; we do however, understand that Equinix is a popular choice for retail colocation and interconnection for our clients. So here is what we know and our initial advice.
What we know and think:
- Steve Smith, who had led Equinix for the past 11 years during massive growth and expansion, has stepped down.
- Peter Van Camp, a veteran in the Internet space with UUnet and Compuserve as well as past CEO and Chairman at Equinix, is temporary CEO.
- A CEO candidate search is underway. There will be no lack of interesting candidates mentioned.
- Equinix has always been top heavy in the executive ranks. That has created friction and at times, stifled needed innovation.
- I would not be surprised if an internal candidate emerged for the CEO role- Charles Meyers and Karl Strohmeyer make the most sense.
What we advise:
- Unanticipated shifts in otherwise stable companies are never easy to digest. Equinix had been on a torrent in acquiring data center assets and steadily developing interconnection and cloud enabled offerings. This change in management will pump the brakes on M-A and potentially shift Equinix's focus when new leadership is brought on board.
- Enterprise clients - Status quo; no immediate need to rethink contracts in negotiation or renewals as day to day operations will remain unchanged.
- Hyperscale/wholesale clients - I think the potential change is greater for this side of the business. In the past , Equinix was more focused on enterprise sub 1MW deals; this year, the focus swung to wholesale leases more attractive to hyperscale cloud providers. This represents a fundamental change is facility design and power distribution. With new leadership, there is no guarantee that the wholesale focus and deal flow will continue.
To reiterate- this is one to keep an eye on but no need to panic or make course changes until there is clarity around the new leadership.