Equinix, Inc. (EQIX) Earnings Call Transcript & Summary

Yes. Good morning. This is Michael Funk from Bank of America, the data center analyst here. Very happy to have Jon Lin from Equinix here with us. He is the President of the Americas, a role he's had since, I believe, 2019 and previous positions were mostly focused on strategy in marketing. For those of you who don't know Equinix, the Americas region is the largest by revenue for the company. And while in his role, Jon has helped to oversee some of the largest acquisitions in Equinix history. Going backward chronologically: the Bell Canada deal, obviously, the Verizon data center, there's Infomart. So I think Jon has a wealth of perspective to offer today to us about the kind of the most mature and largest market, also the integration of these complex deals. So really happy to have you here day with us, Jon.

No. Appreciate it, Michael. Thanks so much. And maybe before we start, I'll just read the disclosure real quick. Some of what I will talk about today contains forward-looking statements. Please read our SEC filings for more information about factors that could affect these statements.

Great. Thank you for that, Jon. And for the clients on the line, I know if you're familiar by now, but we do have a system that I believe you logged into where you can type in questions. I will see those here on my screen, I can read them off at the end. So please do ask any questions you might have and I'll be sure to get them in.

Jon, maybe just to kick off and frame the discussion just maybe for investors that are less familiar with the Equinix story, can you contrast the average Equinix customer in the Americas versus the kind of more traditional retail colocation wholesale customers some investors might be familiar with?

Sure. I guess, starting at a high level, we think of ourselves as the world's digital infrastructure provider. So we're focused on serving our customers in all the right places to enable them to connect to all the right partners and then creating basically new possibilities for themselves and creating new business outcomes. A key differentiator for Equinix is our interconnected ecosystem. So coupling that with our global scale and reach, it's really how we deliver value there. So customers come to Equinix not to house some like their back office infrastructure, but really their mission-critical apps that need to be high performance and accessed by other organizations, whether that's end customers, whether that's suppliers, whether that's partners. And so we've got over 10,000 customers across our platform that are the service providers of the world as well as the top global digital leaders that consume all of those services. And with those capabilities, things like Equinix Fabric, customers can connect to any of those customers across the entire portfolio in a software-defined instant manner. And then after connecting with those right partners, customers end up growing with us over time, connecting to more and more locations with over 67 metros I believe and 27 countries around the world. So it's been an exciting story in over 230 data centers and just a great part of our growth journey.

And what are the applications, Jon, that are going to mean in a higher performance Equinix offers? And how does Equinix achieve that higher level of performance that customers demand and presumably paying some premium to be in an Equinix facility?

Well, it's a great question. And I'd say if you look at the entire world and how digital transformation has really transformed every business, and so those applications end up being anything where customers are either driving revenue or looking for a kind of optimum performance and cost takeout. And that could be anywhere from financial trading, it could be end users being able to deliver and access e-commerce sites. It could be content delivery, you look at the entire transformation of media and streaming. And so really, everything nowadays is about getting maximum performance to the end user, no matter who that end user might be. And so we look at that as a broad set of applications. And the early days of it were things that I just mentioned around obvious digital transformation. And now you look at the longer aspirations of digital transformation around the enterprise. If you look at manufacturing and the ability to do IoT and smart manufacturing applications, you've got connected vehicles, if you look at the transformation happening in health care nowadays. And it's really just, across the board, everything is being digitized, right? And so the opportunity to have that application performance be kind of almost table stakes now for enterprises at large, right? I think everyone's used to an incredible experience driven by consumer applications and enterprises that are looking to drive that same kind of performance for their use case. And so what Equinix says is by allowing that quick access to partners, you can get -- exchange your data more quickly and process it faster. By allowing quick access to the cloud providers with our private interconnection, it does it securely and scalably and also helps you drive down costs. And by having those global locations, our locations are centered around where population centers live, right? We're not looking for low-power cost locations or low-construction cost locations, our entire focus is how can we get these applications closer to where end users reside. And that continues to be our approach as we think about geographic expansion. And so by locating those applications as close physically to the end user as possible, that guarantees the best performance you can achieve.

And just going back to the growth drivers. You mentioned a few applications that are growing more bandwidth and [ data-intensive ] and latency-sensitive, which industry verticals are driving most of the growth in the Americas today over the last 12 or 18 months?

Yes. And while we typically don't break out the mix on a regional basis, but certainly, when you think about the enterprise at large in the Americas, we've been kind of over-indexing, right? And that's led by different areas there, from manufacturing to health care. And as I mentioned, I mean, capital markets as a whole, we think about the explosion in terms of trading activity in different asset classes that are going on, all of that leading towards a tremendous amount of volume there. In addition, we're continuing to see, again, strong growth, as you would expect. And from the people that those customers need to connect to the cloud providers at large, the IT infrastructure providers and also the networks that end up kind of providing that base level connectivity between -- around the world.

Is the primary draw today for an Equinix facility just a plethora of cloud on-ramps that you have in your facilities? Is that the primary draw that bring most of the customers in?

I think about it around maybe like 3 different lenses when we're talking to customers. One is the capabilities today that are highly differentiated from everybody else out there. And that's the number of cloud on-ramps, the number of carriers that are at the facility, the number of locations. And the fact that customers can go ahead and deploy everything that they need to figure out what their solutions solve is today. The second area that I think customers are really attracted by is the fact that we are global. The fact that we can make it very easy for them to expand anywhere around the world. And then the third part is we're future-proofing all of their infrastructure spend because they know we're going to continue to invest in not just getting to new locations that allow them to go ahead and move those workloads where they need to, but also we're continuing to build relationships with service providers and partners for all of the technology stacks that matter. And so they know that wherever they're putting their infrastructure with us, they'll always be able to end up in the future, whether it's 6 months from now to 3 years from now, they know they'll be able to connect to all of the right services that matter. And when you think about a customer 2 years ago, they might have been connecting to AWS or Oracle or Google, now they can also connect to HPE GreenLake or Dell APEX and just consume different workloads and different services no matter how they want to. And I think that future proofing and flexibility is incredibly important for CIOs today. If you think about the change is happening faster than ever, right, as we all know. And so being able to know that, no matter what that spend and that contract with us, they will be able to access all of the future needs that they might be able to solve for is a huge amount of security for them.

Sounds good. It's great to understand that better. And Jon, can you just -- you mentioned solutions. Can you walk through how customers talk to you about utilizing Equinix Fabric and then a more recent launch with the Packet acquisition. How are they -- how are customers thinking about utilizing those different products or solutions?

Yes. So when we talk about digital infrastructure, it composes a couple of different areas there. One is the physical footprint that the customer needs to access. And so by going ahead and having that availability there for locations around the world, that's obviously very important. The second part that we've always talked about is interconnection. And so that interconnection historically was done via cross-connects and being able to connect from yourself -- your deployment that, that customer had into one of the carriers, into one of the cloud providers in that local facility. And what Equinix Fabric does is, it makes it point-and-click dead easy to be able to connect to any facility around the world. Whether that's a customer really connecting their own network connectivity requirements like going from the U.S. to Japan to the U.K., they can go and talk to their client, be able to connect that instantaneously. In addition, Fabric also allows them to connect to the cloud service providers, right? So the CSPs that we've talked about, the on-ramps that we've built with these cloud providers. But it also allows them to connect to any other customer that Equinix currently has. And so that ends up being an incredible business ecosystem, a partner that they may need to go ahead and have low-latency access, secure access. They're exchanging data, they're exchanging supply chain information. They can just go ahead, and again, find those partners and be able to connect with them in a software-defined way. And so that's what Equinix Fabric is all about. It's about making that connectivity dead easy to do and make it very scalable around the world. I would also say, it allows them to connect to the networks, right? When we're doing the Equinix Fabric business, it's not to displace the carriers and their ability to connect our customers to new locations. It just makes it super easy to be able to get up and running. And then over time, we obviously see that as an avenue where the carriers can end up delivering more services more quickly to their end users. On the Equinix Metal side, and so that's the service evolution that we've done after the Packet acquisition, it's again about making our infrastructure easier to consume. And so colocation is tough, right, especially right now with the issues around global supply chain, global logistics. So Equinix Metal essentially allows a customer to get dedicated hardware, fully dedicated, connected to our infrastructure offerings. And again, do that in a software-delivered portal-driven way, making it easy to access everywhere around the world. So we kind of think about it as almost colocation on demand or colocation-as-a-service where you can just go in there and get up and running as quickly as possible. And that service offering, for us, we're not looking to compete with the cloud providers where they're offering a much broader range of different application-oriented Software-as-a-Service, application-as-a-service or infrastructure-as-a-service. It's about making our infrastructure easier to consume and tie that in with the interconnection offerings and the richness that we have there.

And then you mentioned supply chain. Have you seen any impact on your own supply chain?

I would just say, we're constantly evaluating and looking at that and working with our suppliers and partners around making sure we can stay in front of it. I'd say, as everybody knows, like the issues out there are real, right? I think we're not seeing any material impact to our business or really our customers' interactions with us so far. We're helping them everywhere we can in order to make sure that they can get their infrastructure wherever they need it.

Okay. You haven't seen any delays, I think kind of installation delays where customers have pushed back their installation because they have an issue with procuring their own servers or their own hardware. You haven't seen any of that?

Not materially. Yes. I think, again, it's -- since the beginning almost of the pandemic, in the early part of the -- probably towards the -- towards half of last year going right through the summer, you started seeing customers saying through, hey, how do we better project exactly what these needs are going to be. Especially as both the pandemic hit, the supply chain issues we're starting to think about and then just the needs of digital transformation exploded, right? And so we saw our customers really trying to think ahead a little bit and work with their partners. And again, like I said, where we've been able to, we've been able to bridge that gap with some of our suppliers and partners as well.

Great. So we've walked through differentiation of some of your products, Jon. I want to shift to strategy now. So presumably you're sitting down with Charles and Keith relatively soon, the end of the year is approaching, so you must be thinking about your goals for 2022. So if you're going to walk in that room with kind of your 5-point plan for 2022, what are your priorities for the next 12 months? What are your objectives for the Americas region?

Yes. I think as you saw in our Q2 results, the Americas region is really seeing a lot of momentum growing. And we've had record bookings now for the second consecutive quarter. And we're just continuing to see that momentum and buildup. So -- some of it on a strategic basis, like don't make it too complicated, right? You're seeing the momentum build. Let's make sure we're out there and satisfying that and making sure we're engaging with customers and scaling and satisfying that demand as quickly as possible. I do think it's -- it feels like a sustained motion. It feels like the pandemic, this isn't accelerating and bringing in spend so much as it is accelerating the need for digital transformation and creating that awareness as just something that we saw was definitely going to get there has accelerated by a couple of years, right? And I think that engagement with customers across the spectrum now is it feels like a very sustained motion that we can drive. So it's continuing to scale that pursuit, continuing to scale that fulfillment engine and keep growing.

And so in the Americas, Jon, I mean obviously at the very beginning, the largest region for Equinix, always difficult to grow off a larger base. So as good for you, it's also a challenge, right, in that larger region. So where is the opportunity? What are the levers that you can pull in the Americas to accelerate the rate of revenue growth? And then I know that Charles and Keith kind of talked about regional growth rates -- the projected regional growth rates and the Americas is normally a lower rate of growth and a more mature market. So how do you accelerate that? Is it -- I mean, is there opportunity just to improve volume, right, accelerate the rate of cabinet additions? Is there opportunity to move the pricing level, right? You mentioned that digital transformation has accelerated. So can you increase occupancy to a point where customers are paying more for that limited space in an Equinix facility? What are the levers that you can pull to accelerate that rate of revenue growth?

Yes. I think, as I mentioned, just the first is we're seeing great momentum in the market and I think the need is out there. And so being able to scale our go-to-market engine to really satisfy what we see as a huge amount of demand out there is critically important. And many of you probably have heard on our earnings call, we've constantly talked about channel, right? And everything that we're doing in terms of driving scale to be able to touch more customers with our partners and with our channel partners at large, I think that's a huge part of our strategy and growth areas. We just see -- we can solve a lot of problems for so many customers that our in-house sales team is not going to be able to have the time of day to be able to cover. And so being able to leverage our channel to be able to find more opportunities and satisfy that. So not just from sales partnerships, but also from product and fulfillment partners to be able to tap into all of those customers around the world is incredibly important for us. I think, again, one area that we've been focused on very strongly is just making sure that we're selling kind of to the right customers the right footprint and the right applications. And we believe that, that's a fundamental -- by doing that fundamentally, it reduces the risk of churn at the end of the day, right? By making sure that we've got those right deployments, those customers will be more enduring in terms of revenue, and that's certainly been a focus area for us. And I think we'll continue to drive that by using more services, by using more of our contractual levers that we can do around that and giving the customers, again, that feeling of future proofing in the long term, we can go ahead and solve for that in a sustained way. And I think another area around that is just driving more interconnection density. I think you see what we've done with Fabric and the ability to accelerate how interconnected our customers are. And that does 2 things. One is we drive more revenue in the near term, they're taking more services, they're taking more connectivity to more partners. But again, that makes that footprint even more sticky. By connecting to more customers, they know they can't replicate that footprint in just like any other environment. So that's really a huge driver for us.

Okay. And -- are virtual cross-connects, I mean, are they a risk to your business, to the revenue? Or are they more -- is that more of an opportunity where you have a virtual and then as customer kind of usage increases, they migrate to physical? How should we think about that?

Yes. I think about it as upside, really, right? I think there's still continues to be a lot of workloads and use cases that will only be satisfied by physical cross-connects. But in the longer term, when you think about the ease of use of a virtual connection and how quickly that can get stood up and be able to connect with more partners, I think that represents -- continue to represent upside for us in terms of driving interconnection growth. And we've seen that so far, right? This is not a new thing for us. We've had a couple of years now of being able to have Fabric and Cloud Exchange previously under our belts, so we know kind of how that works. And we do see our customers that are consuming Fabric end up driving more interconnection to actually end up doing more interconnection on a dollar basis with us. And so we see that as sustainable trend.

Okay. And I wanted to switch back just to the acquisitions that you've overseen, Jon. I mentioned in the very beginning, you've overseen some of most consequential acquisitions at Equinix and I mentioned the Verizon assets and Bell Canada, Infomart. I'm sure I'm forgetting a few, but some transformational acquisitions. So what were the lessons that you learned about trying to integrate those assets into the Equinix platform? What were some of the challenges or even positive surprises that came out of that?

Yes. I think one area that we always focus on as we're going into diligence and then making sure we manage that through the close is just the people, right? It's -- we're incredibly passionate about the culture at Equinix. And then what we've seen through all these acquisitions is, for a large part, the data center operators at large, they're mission-oriented folks that really care about infrastructure. And so being able to make sure we're doing a good job of taking care of these people who know these sites and put the customers in like are in there day-to-day in the data centers is incredibly important. So that's a huge focus area for us, making sure we're handling the people portion of that correctly. And I think I'm incredibly proud of how we've shown up in support of our teams around that. And this last one with the assets from Bell Canada, we closed that -- or signed that acquisition, closed that acquisition all through the global pandemic, right? And so we haven't really been able to get out there and spend the time that we need to, but we've been able to accomplish that virtually as best we can. And looking forward to getting up there and like giving gigantic hugs and really spending more quality face time with them, but I think that they appreciate that outreach, right? And the fact that our teams are always working with them to go ahead and do that. And our integration, and again, even through a global pandemic like this, we've been able to hit our benchmark and our milestones that we're looking for because we're driving the engagement with the teams and really they see how passionate we are about the mission. They see how passionate we are about supporting them through that. I mean, and they're excited, right? We're all aligned and growing there. So that's been, I think, one of the biggest areas is just making sure we're taking care of the people and handling that well. I think certainly through our diligence process, we handle some of the tougher areas around like, hey, are these the right assets? Do we have the right understanding of their infrastructure? Do we understand like, hey, what the investment will take around that. But we're -- I would say, like very strong at that, very mature in our processes around that. We understand going into the -- all of these deals that by the time we've signed, we have a great understanding inside and out of the assets and kind of what needs to happen next. And so a big area for us is that continued focus on how do we make sure those assets are coming up and delivering the service quality we're expecting, do all the remediation work that, again, some of these acquisitions, the sites haven't had quite the amount of care and love that we have with our assets and so we can go ahead and make sure we're doing those investments, modernizing the infrastructure and driving efficiency, right? And we know that driving that efficiency and modernization actually helps as well with our ESG efforts and making sure that we're delivering that infrastructure in a sustainable way. Again, for a long portion of the data center industry, that wasn't a focus area, right? And so we've been -- certainly as we do these acquisitions, that's as a key area for us.

And just on the Verizon data center acquisition, if I remember correctly, I mean, I think that there was a slight uptick in churn that happened within those facilities after the acquisition. I think the way that Keith described it was that a lot of customers weren't really traditional Equinix-type customers. There'd be some turnover and work through of that base and it was called out for a number of quarters during the integration. How are the Bell Canada assets different from the Verizon assets? And are you exceeding -- do you expect to see some elevated churn out of those assets as you work towards a more traditional Equinix-type of customer base?

Yes. I would say in the near term, we're making sure that we've got the right plans in place around that, right? I think we're looking at the customer base and we don't see -- we don't project kind of that same elevation that we anticipated with Verizon. And on the Verizon acquisition, we knew that some of that was coming, right? And we certainly signaled to the market at large, hey, we're planning on that and that was kind of built into the plan, so to speak. And candidly, we kind of outperformed that plan by quite a bit in terms of how long we were able to retain the revenue and kind of the phaseout of that. Now the downside to that was because it dragged out longer, we were talking about it more. But I think I'd rather have it drag out but be smaller each quarter than they kind of hit early on and then have a bigger revenue gap in the initial period. And on the Bell side, I'd just say our customer engagement has been incredibly strong. I think the buying community and the relationship with the customers there are quite strong. And I'm feeling great about the progress we're making, both in terms of retaining those customers and doing those renewals since we've closed as well as getting them exposure to the rest of the Equinix platform, really exposing the capability to deploying to more markets around the world. We're seeing a lot of excitement and energy from those customers around that. So already having exports into Europe into the rest of the Americas. So it's been a great run so far.

[ And Equinix as well ], I think, embarked on a strategy of being the beachfront property owner of data center operators, right? The Verizon deal, I think, largely is focused on the map of the Americas in Florida, the Infomart deal that similarly carries a lot of traffic between North America and then South America. And along those same lines of thinking, are there other similar assets that would be in a wish list for you to round out that portfolio of beachfront property for Equinix?

Yes. I mean I think we look at all of the key interconnection locations around the world. And we think that we can do a better job being the stewards of that infrastructure than anyone else on the market. And I think having a stable partner operating those sites is incredibly important. I don't know that we look at any particular asset right now and signal in any way like they were looking at one or another. But I would just say like all of the major interconnection hubs that exist in the market that we feel like it's still continuing to grow, and we want to make sure is in the right hand so we feel like we're in the right pair of hands for this.

Understand. And then I wanted to transition to xScale, if we can.

Sure.

It's not a new initiative. I think they were actually first announced at the Analyst Day previous to this year, so it's been part of the product set and strategy now for a few years. But that spring part of the Analyst Day, Equinix had announced an expansion of the xScale strategy, which presumably signals this is something that the customers are asking for, right? So in your discussions with customers, how are they talking or thinking about xScale and maybe even trying to step back, how does xScale fit into the Equinix portfolio?

Yes, I think it's a great solution set for us to be able to solve for our hyperscale customers in a way where, for a long time, they've been asking us to do like their largest footprint and really go after it and win some of their large footprint business that -- on our balance sheet, we didn't want to carry because it doesn't really meet our standard return thresholds comparing that to kind of our retail interconnection-oriented properties. And so the xScale model creates a great opportunity for us to basically continue to help these customers with the deployments that they want us to help them with, but do that off balance sheet and do that with capital partners that are willing to accept or are excited about some of the returns of these partners, knowing that hyperscale tenants have incredibly great credit ratings and these are for long-term contracts. It's a great opportunity for them to deploy large loads of capital and you know that they'll be able to get -- put a coupon essentially for a while and get good returns off of that, that are stabilized and derisked. And so that's -- to me, it's rounding out kind of our service offering for the hyperscalers. They've always trusted us for the interconnection they need. They've always trusted us for going into the right markets in the right locations and making sure that we're servicing them. But being able to offer that adjunct of really supporting some of their large footprint requirements in those markets and have that connected back to those interconnection hubs, it makes it easier for them to scale and do business. And so that's xScale at large. I'm excited about all of the opportunities that we've driven with them. We've certainly already announced some of the movement that we're doing in the Americas, in Brazil and Mexico. So being able to solve again for those large footprints in new and emerging markets where it's very hard for them to sell solution. I'd say, in the U.S., we never say never. We're continuing to watch and look at it carefully, I'd say. But in the U.S., the hyperscalers themselves have a lot of capability around self-solutioning for builds. There's a lot of different options for them to be able to solve for that large footprint. And again, all of those large footprints are still fundamentally interconnected back to our locations. So there's kind of a little bit less of a kind of strategic itch that we need to scratch, so to speak, in the U.S. there. But we're continuing to watch it carefully and see where it can make sense. It's a great kind of tool in the toolbag to be able to help deploy with those customers.

Yes. It's great to understand. Just want to reiterate to clients, if you have any questions, you can go ahead and punch them in and I'll see them here on my screen. But a couple more for me, if I could, Jon. So first, we're talking about Americas and everyone kind of thinks U.S., but it's clearly you still have Mexico, you have South America also in the region. What are some of the regional trends that you're seeing across the Americas, maybe some more Latin America than U.S.? And how's the geopolitical climate different? How it's more challenging to build? Can you just kind of walk through some of those regional differences?

Yes. I mean not to forget about Canada either. Canada is an important part of the Americas at large. And I'd just say the pace of digital transformation in each of these markets is slightly different, right? I think, again, when you look at Canada and the opportunity there, and I'll start there, it's our closest neighbor up north. It's -- I think about it as we're still -- they're still in the earlier innings on digital transformation. So I think there's really a lot of exciting work to be done there. You think the major cloud providers are only just starting to roll out kind of local presence in major regions there. And so the enterprises are on the earlier stage of adoption, which means to me like there's probably more growth that we can expect out of that market in kind of the near to intermediate term. When you look at the rest of Latin America, again, similar story. I think the market maturity, both for digital transformation and infrastructure and also the telecoms market is different, right? So you look at Mexico, now the reason that we were excited about Mexico was we really started to see -- we were really starting to see a very [ MEC-like ]steady development of competitive telecommunications evolve into the Mexican market. And that's really exciting because that means that interconnection is starting to flow. That means that access to customers is going to start to become important. And the ability to get local deployments into that market and really be able to serve those customers is going to get more and more real. When a country only has 1 or 2 carriers, being a carrier-neutral provider is not a super exciting value proposition, right? So it's important to kind of have that framework in place and have that energy behind the market. And it's -- I think you're starting to see that kind of explode. And I think part of that is a recognition of our timing and we were right on the right side of it. We were on the right -- right near when it's going to start moving, not too early hopefully. Otherwise, you're sitting there a little long. But I think part of it is also the fact that we're going into that market needs kind of confidence that some of the large hyperscalers and the large enterprises that, hey, this market is maturing and it's going to be like real enough, right? And so shortly after our acquisition, obviously, Microsoft did their announcement around the level of investment that they're going to put into the Mexican data center market, where we've seen other hyperscalers also start really expanding and ramping up their planning in there. So I think that that's really exciting. And so it's -- but fundamentally, Latin America is exciting for all of us because these are high-growth markets and going through economic transformation and change, right? And I think that continues to represent great opportunities for us in the long term.

I mean it sounds that you're actually relatively positive or constructive about growth potential in the Americas. Do you -- I mean, do you see opportunity for growth in the Americas to exceed what is post -- the last few years? Is it -- I mean, Latin America coming online is strong, all the acceleration trend that you're highlighting in the United States not being temporary or cyclical but more secular. You sound pretty constructive or positive about the growth potential in the region you're overseeing.

I am. I think that there continues to be strong opportunity here. I think we'll make sure we'll update that as we go into guidance season and looking into planning for next year. I don't want to go too far over our ski tips, too. We just talked about it at our Analyst Day event. But I do think we've got a great sustained set of motion here. I think the enthusiasm that we're hearing from our customers about what we're doing in the market and what they can do with us gives me a lot of confidence and a lot of excitement.

And maybe just one more if I could, let me just double-check. So no questions from the clients yet. I know we're doing some one-on-ones later where they'll probably have plenty of questions for you. You mentioned earlier, Mexico was largely a single-carrier market. We have had some consolidation in the U.S. wireless market, I believe all the carriers and customers of Equinix. Do you anticipate any churn from that consolidation, specifically T-Mobile, Sprint, not sure how large customers they were, but they are consolidating their networks and their infrastructure. Is that churn that we're going to see?

I don't think it's anything material that I'd be thinking that we're overly focused on right now. I guess, again, that's part of the energy of the Equinix model is that distribution of revenue across such a broad set of customers in the industries that any one customer or any one activity doesn't really kind of present any real threat for us from a churn perspective. I am excited about, I think, the telecom market in the U.S., it's evolving. I think there's a certain number of players and a certain amount of competition that obviously we need in each of those markets for it to make sense. But it's important for them all to be healthy and then be able then to focus on how can they thrive and invest in delivering better services, whether that be a 5G, whether that's via increased fixed wireline, whether that's fiber-to-the-home, et cetera. I think making sure all these customers kind of are not overly competing with each other so that they can't kind of invest on future growth is really important. Right now I'm excited about the work that I think this administration is going to also help with around just digital infrastructure at large, right? I think there's a lot of investment that continues to need help and support there. You look at rural broadband, you look at just overall power utilization on data centers, we need that support and we need that done in a sustainable way. And I think there's a lot of goodness ahead for the market.

You mentioned the PUE for data centers for the infrastructure plan. Can you explain to us how that's connected in infrastructure plan the power utilization or efficiency?

Well, I don't think that there's any direct ties right now in terms of the -- those that I've seen, but I do think there is discussion about what digital infrastructure means as part of that plan. I think it's still at maybe 100,000-foot view, not really yet even to the 30,000-foot view where we're probably operating. But the fact that it is going to be foundational around, hey, we want to do everything in a sustainable way and Equinix is kind of taking the lead on that from a global perspective for the last, I don't know, 6 years now of saying, hey, we're going to be 100% renewable. We're going to do things in a Science Based Targets kind of way. I think we want to make sure that we're in front of that because, again, it's the right thing for our communities. It matters for our customers, it matters for our people. It becomes something where we can be proud of the work that we're doing and helps with our employee retention in a big way and our ability to acquire new employees. And again, I think our customers are now -- they're expecting it, right? And I think anybody that doesn't have a great strategy around sustainability and how to talk about it, is going to lose out on opportunity with customers in the long term.

No. I understood. It's a good place to go ahead and end it right there, Jon. I do appreciate you being with us today. And hope to look forward to seeing you in person at NAREIT. It's going to be out in Vegas. Hopefully, they do it in person. We can all see each other again and have a drink or dinner. Once again, thank you so much, Jon and Katie. Thank you for doing this today. If any clients have any questions, feel free to ping me after. And I hope you all have a good day.

All right. My pleasure. Thanks, Michael.

Hey, you take care. Yes.