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

[Presentation] Please welcome, Chief Financial Officer, Keith Taylor.

Well, welcome, everybody. Thanks to all of you for coming here and visiting with us today, whether you're live or whether you're online. It's just -- it's great to be here on stage with you for Equinix's 2023 Analyst Day. Now as you saw by that video, I love that video, by the way. As you saw by that video, this is the eve of our 25th Anniversary. Tomorrow is our 25 years' operating as a company. And now it's been 5 years since we've been able to stand up on stage in front of you. So we're excited to be here. So again, thank you. And it's 2 years since we last had an Analyst Day. As many of you know, we're about to say some forward-looking statements. I think that's why many of you are here, I hope. But I do have a responsibility. So because we are going to be making some forward-looking statements, please refer to our SEC documents in our most recently filed 10-Q and our 10-K for risk factors and uncertainties. Also, if you have any questions today, please e-mail -- sorry, e-mail [email protected]. So send an e-mail if you have any questions, and we'll try and get to them today. We don't get them to them in the presentations, we'll have Q&A at the end of the day. Now we have a very exciting program for you today. Charles is going to start us off with the opportunity ahead. Then we have Nicole, who's going to interview a fireside chat with Jon Lin and Scott Crenshaw, our 2 general managers, one for data centers, one for digital services. Then we're going to give you a nice break. And then coming back, you're going to get the benefit -- or actually maybe not coming, right, but you're going to hear from Mike Campbell. And Mike Campbell is going to talk about our strategy, our multipronged strategy on how do we go to market. And I think that's going to be a very worthwhile segment of our presentation. Then we have the benefit of Tara Risser, who's going to speak to 3 of our customers in the customer panel. The customer panels, Nasdaq, Nvidia and Zscaler. Then I'm going to wrap it up today, and I'm going to talk about durable value creation. With that said, we have 5 core topics that we want to spend time talking to you today. It will be our track record of delivering the expanding market opportunity, managing through a current dynamic and complex global environment that it will be about our balance sheet, and it certainly will be about durable value creation. Again, I want to thank all of you for being here today. I think we're going to have a great show. And I look forward to spending more time with you. So let's gets started.

Please welcome President and Chief Executive Officer, Charles Meyers.

Good morning, everybody. It's fantastic. I feel like I've been saying this all of 2023, but it is great to be back in-person with folks. We haven't had the chance to be back on stage in 5 years. So it's really great to be here. I want to extend my thank you added o Keith's for all of you for investing the time to be with us here today. And on behalf of 12,000 plus colleagues around the world at Equinix , I welcome you to our Analyst Day, whether you're a time center or virtual however, really appreciative that you made the investment. I -- the reality is, I mean, I think if you look, I think you'll see that the -- in the video, it talked about what an exciting time it is, I think, for our business and for our world. The reality is digital is changing everything. It's changing our lives and increasingly, it's changing how business gets done. It's fundamentally reshaping the competitive dynamics in industries around the world. Quite possibly, digital is the most transformational set of technologies as our world has ever experiencing -- has ever experienced. And it's setting up for digital to be the primary economic growth driver and driver of social progress that we will see for the coming and beyond. And that's accelerating innovation, enabling ecosystems and positioning us to really take advantage of those opportunities ahead of us. And it's also elevating the standard of living for billions of people around the world. And this revolution is fueling demand for digital infrastructure and not just any digital infrastructure, but digital infrastructure that's more distributed, more cloud connected, more ecosystem enabled, more on-demand and more sustainable than ever before. And so today, you're going to learn more about this revolution and you're going to hear about the unique role that Equinix playing is in making it possible. So as Keith talked about, we're going to talk -- I'm going to kick things off today. Keith is going to come back to back cleanup or whatever it is that hockey players, I guess, do in that sports analogy. And in between, you're going to hear from what I'm confident is the best team in our industry. And importantly, from several of our customers, customers that we get the privilege to serve every day. And they're going to talk to you about that these are customers that are really shaping the digital revolution and making it all possible. And customers that have selected Equinix as their partner of choice, and they're going to talk to you about why that is. So our content is really going to be shaped around these 5, our track record of delivery or as they say in the Agile World, our say-do ratio. Talk about a little bit about the robust market demand and demand backdrop that we continue to see and how that's translating to an ever-increasing and expanding market opportunity. Talk a little bit about the complex and dynamic environment that we face and how we're managing through that and how we're bringing our advantages to really derisk the path forward for the business. Talk about what those durable advantages are and how they -- and in particular, Keith will talk in depth about our balance sheet and how that translates to value creation. First and foremost, value creation for our customers because they are at the center of it all. But by serving those customers exceptionally well, we believe that we're confident we can continue to deliver sustained value creation for you, our investors. And so to add some credibility, hopefully, to that bold statement. And one of the things that I was talking about as we came into this is I really believe that Equinix from an investment thesis standpoint, is one of those rare opportunities that is what I refer to as high floor, high ceiling. I think this is a company that provides predictable, proven, demonstrated growth, but also enormous upside potential. And as I said, I hope that this slide adds a little credibility to that. Many of you have probably seen versions of this chart over the years, and it's easy to understand why our teams are so proud to show it. Since 2010, as you can see is sort of this inflection point in the business. We have dramatically scaled the business, both organically and through M&A. You see all the M&A activity that we've done on that upper line. And it highlights what I think is consistent and disciplined execution that we're very proud of, but it also highlights the incredible strength of our business model, of our highly differentiated business model, and it features 2 major distinctions that really separate Equinix from the pack. Our interconnection strength shown on the top of this chart and our expansive global reach as demonstrated in terms of our metro reach, which now exceeds 70 markets around the world. These things continue to position us as the partner of choice for customers and as a critical point of nexus in those customers' digital transformation journey. So since we were together 2 years ago, we have continued to execute on the business. And as I said, do what we said we were going to do. Keith is going to talk about the fact that we have continued to meet and exceed the financial targets that we've laid out, and we've done that, but by continuing to invest in our business and invest in our people. On the left-hand side of this, you see what we've done in terms of continuing to invest in the business, adding 8 new metros since we were last together, continuing to deploy our digital services portfolio now in 24 metros allowing low latency access to the vast majority of the global population and investing the capital from our healthy balance sheet to fuel 28,000 of new retail cabinets and 100-plus megawatts of xScale capacity. On the right-hand side, continuing to invest in our people. Putting forward a $50 million investment in the Equinix Foundation to support digital inclusion, continuing to pursue our aggressive sustainability and ESG goals with a 23% reduction in operational emissions from our 2019 baseline. The formation of a transformation office. And as Keith said, you're going to hear from Nicole Collins, our terrific CTRO, who's going to talk a little bit about how we're driving forward to a platform vision that I'm going to talk about here a little bit my -- later in my presentation. And we're very proud and humbled to have continued to receive accolades from a variety of external sources around our culture, and our cultural commitment continuing to build on the Magic of Equinix and attract, inspire and develop the absolute best talent in the industry. I want to talk a little bit about the setup that has occurred over our 25-year history and how this series of catalysts have created a cumulative and reinforcing set of effects that now position, I think, us in a situation where we are seeing the greatest underlying drivers of digital demand and demand for digital infrastructure that we've ever seen before. So if we go back to sort of the turn of the millennium in the 2000s, really the 2000s that first decade was probably more of a consumer-led decade, where web, social, mobile was really orienting us around an increasingly digital world. But also around this 2020 time frame is when the groundwork started to be laid for enterprise transformation. 2020 happened to be the year that Marc Benioff and team put out a little button, there are no software buttons, remember those. Well, in sort of the typical crazy like a Fox way that Salesforce. The reality is, is this sort of no software gave rise to an environment where software is more important than it ever has been and more pervasive and higher volume than it ever has been, but it's delivered through a fundamentally different delivery model that really started to set the stage for enterprise transformation. Fast forward to 2010, and that is really, in many respects, although not the beginning of it happening, but the beginning of -- at the beginning of really accelerating cloud transformation. In -- in 2010, AWS was a $500 million business. That almost seems unbelievable today. Yet that sort of ignited what I think we are now seeing still in the somewhat early innings to build on my earlier metaphor of what I believe is a multi-decade transformation of enterprise IT and the sort of the emergence of hyperscalers and even the term hyperscalers because of the hyper growth that has been sort of demonstrated from those companies over the COVID, which was candidly a huge pain in the you know what, in many respects. But it was also an incredible opportunity and a learning opportunity for us, probably as individuals, as companies and as a global society. I know one thing I learned as an individual is replacing airplane time with time on my bike, made me a much healthier person. I'm challenged to sustain that now as we're back on the road, but that's probably less relevant to this group. What is really relevant is I think one of the key things we learned was that those that were prepared for a digital world are outperforming those that were less prepared. And that reality really came to bear during the course of the pandemic, and I think really fan the flames of digital transformation over the last several years. And now we find ourselves here in 2023. Probably at the beginning stages of another wave of transformation and a catalyst that has been there a while, yet has now emerged into the public consciousness and is beginning to be adopted at absolutely unprecedented levels and really is gasoline on the fire to transform both business and society. And so you're going to hear more about all of these things and about their self-reinforce -- mutually reinforcing effects of these various catalysts on our business over time. So collectively, these things have created an environment that I think despite a series of challenges and macro pressures, including a pandemic war, energy disruption and a macro environment that is as complex and as fast changing, as we've seen in a very long time is creating an incredibly durable environment for the demand for digital transformation. The reality is that this -- it is -- we're seeing our customers have a deep commitment to digital transformation, a commitment that's driving a continued migration from owned data centers to hybrid infrastructure that delivers superior performance, greater agility and a credible path to people achieving their sustainability goals. All of that is translating to an incredible growth rate, 8x IDC estimating that digital transformation is growing at 8x the rate of the broader digital economy, a huge economic opportunity, which I think, candidly, is significantly underestimated from this 2006 estimate of $100 trillion upper grabs. And an emerging reality that companies, particularly large global companies really must embrace digital or be left behind. And interestingly, and I think important for us at the heart of this digital wave is an irreversible movement to as-a-service as the primary consumption model. And service providers are really leading the way. On the left panel of this slide, you'll see sort of a breakdown of the Global 2000 market cap. Actually, this is just the top 200 of the Global 2000, which represent about half of the total market cap of the Global 2000. And it shows a breakdown between service providers and enterprises. In 2012, you'll see that the combined market cap of the top 200 companies was about $17 trillion. About $3 trillion of that in the hands of service providers and about $14 trillion in the hands of traditional enterprise verticals. Fast forward 10 years, and you're now at, what is it, $36 trillion collectively, again, about half of the total G2000 market cap, 200 companies, 25 of those service providers, 175 of the traditional enterprise. Yet the market cap is now $11 trillion in the hands of those 25 service providers and $25 trillion in the hands of the other enterprises. And I think that if you fast forward another 10 years, I think you are probably going to see an inversion of the ratio. Service providers continue to command more and more of the value capture or enterprises who are forced to behave like service providers. Now why is that relevant for Equinix? Well, the reality is Equinix's bread and butter has been and will continue to be service providers. We have built our business on the backs of providing the foundational infrastructure that makes it possible for global service providers to scale. As you can see here, we are -- we -- I have the privilege and pleasure of serving all of the hyperscalers, 100% penetration of those in the G2000. 96% of the network providers in the Global 2000, 1 in Russia and 1 in China that are not on the list. And 80% of the other 2 sort of service provider-centric verticals, content, digital media and cloud and IT. And so our position, as I said, has always been to serve these customers and really has been the bread and butter of Equinix. And I believe that dynamic is going to continue to serve us very well in terms of our future-looking growth. And from the -- this is really not an accident. This was the genesis and the intent of the business and our sort of founding vision from its very start. We set out to create a platform company. Perhaps it wasn't called that at the time, but we always knew that it would be fueled by ecosystems. At its core, we started to create a peering fabric and an ecosystem appearing partners that we knew would fuel an ecosystem effect. What we probably didn't really fully appreciate and realize is that original peering ecosystem rapidly on the sort of back of the increasing returns phenomenons that are central to ecosystems rapidly created Equinix as a de facto standard for network interconnection around the world, and created a base of now 2,000-plus network service providers that form the foundation of that ecosystem. And that -- it's that ecosystem in many respects that has been the catalyst for all other ecosystems to follow, financial trading, media, digital advertising, smart vehicle in more recent years. But powerfully, it also was the catalyst in the gravitational pull for the hyperscalers and for scaled service providers who came here to interconnect to networks and have now created their own gravitational pull that is creating a broader ecosystem as broad-based service providers and Global 5000, 10,000, 20,000 enterprises are implementing hybrid and multi-cloud as the architecture of choice. Those sort of center ecosystems tend to be still more colo centric, more consuming our data center services portfolio. And then as you move to the outer markets, you see a more hybrid approach with people consuming some level of colo and private infrastructure and then using our digital services to integrate that into hybrid multitiered architectures. And then -- and now digital services also opening up a broader and more expansive opportunity for us to reach influencers and new personas who are shaping IT architectures around the world. And that's application owners, application developers, application architects, et cetera. And so all of this together is creating a huge and rapidly expanding market opportunity for the firm, all stitched together by a market-leading interconnection platform that makes value delivery and value creation, more frictionless and more powerful than ever before. So let's talk a little bit about the market opportunity. In 2018, when I was up here on stage, we estimated that the 2023, the current day TAM would be $32 billion for colo, which by the way, was significantly undershot when you look at the total market. And at the end of -- we naively size the incremental enterprise opportunity at $10 billion. Since then, a number of things have happened. Hyperscale demand has accelerated in an almost unimaginable way. We've added 20 new markets and significantly expanded the geographic reach of our platform. We've expanded our DS portfolio both in terms of offerings and reach. We've captured 41% of the Global 2000, meaning that we've made significant strides, but have a lot of addressable market left to be had. And AI has rapidly gone from experimentation to a full-scale phenomenon. Every day, we're seeing more and more of the market move from this giant gray bubble, which is not to size and is $5.8 trillion of spend and moving into the blue bubble and becoming digital infrastructure markets. And you can see in there that includes sort of core data center infrastructure, a large amount of as-a-service infrastructure that supports the serve x-as-a-service broad market opportunity and now the early stages of a massive opportunity around AI. We believe that, that translates to roughly by 2026, $140 billion market opportunity. Much of that in sort of our traditional sweet spot of data centers and colocation. Some of that in the form of advancing our cloud fabric and other things into a richer set of services and opportunities around cloud networking and beginning to have deeper penetration into the hybrid cloud infrastructure, both with our data center and digital services portfolio, and then beginning to tap into the AI opportunity. So -- and this is actually our serviceable addressable market, which will continue to increase as we expand our geographic reach even further. So whether our real TAM or SAM is $140 billion or $100 billion or $200 billion, I'm not that sure because there's always some element of false precision in these things, right? But what I can tell you is the market opportunity; the market is there for us to drive continued very attractive growth in our business. I would say that a perfectly acceptable answer for how big is the TAM is big enough. And in this case, it is a very large and we think significantly expanding addressable market opportunity. And we think that, by the way, the -- we are moving to the market and the market is moving to us. What does that mean? So let me talk a little bit about that. If you overlay the $140 billion of market opportunity that we see in 2026 against how the market lays out today. We believe about a relatively smaller portion of that, about $30 billion are in the hands of digital leaders. Companies that have the skills, the experience, the need, the motivation to really accelerate digital transformation and who are investing and who typically are using our platform and the capabilities of that platform in a rich and a very complete way. We think about $40 billion of that would be in the hands of people that are currently sort of in that digital follower category and about $70 billion in the hands or the wallets were accurately of digital starters, companies who are just getting going in their digital transformation journey. And as these companies advance from left to right on this chart, we -- and as we expand both the reach and the capability of our platform, the SAM and our ability to capture it will continue to increase. So digital transformation is increasingly dictated by a data and application-centric world. And that is the need for data and applications and the performance requirements that underpin them is driving very different demands on digital infrastructure, as I said earlier. Customers are demanding that it'd be more distributed, more cloud connected, more ecosystem enabled, more on-demand and more sustainable than ever before. Fortunately, these requirements map beautifully to our distinctive advantages, and they continue to position Equinix as the partner of choice. And you're going to hear that, I think, from our customers today in a powerful way. So let's talk briefly about each of these evolving customer needs and how we're responding to them. We'll start with the customer need being more distributed. I always say to our teams around the world are selling teams that the map continues to be one of their largest sorts of selling tools and most powerful selling tools. And if you look at it, almost all of our growth in terms of deployments over the last 3 years has come in the form of multi -- of distributed infrastructure deployments. In fact, single metro deployments actually declined over a couple of years. They've come back a little bit probably on the backs of our aperture increasing a little bit with digital services, but almost all of our deployment growth has come in the form of truly distributed deployments with 3 region deployments continuing to lead the way, people who are doing business with us across all 3 regions. And to put that into a little bit of a sharper focus in the middle panel of this slide, this shows the average sort of composition of deployments for our top 200 customers, our top 100 service providers on the left of that panel and our top 100 enterprise customers on the right of that panel. 83% -- 80% on a blended basis of our customers around the world are doing business -- of these top 200 are doing business with us in all 3 regions of the world. And that means that multi-metro deployments are now 2/3 of our total revenue. And on average, service providers are deployed in 12 countries and 21 metros with enterprises sort of rapidly growing towards that in an average of 7 countries and 10 metros around the world. And by the way, the more distributed deployment is the more sticky it is, the lower churn rates, higher customer lifetime value. And these customers represent 60% of our total recurring revenue. And so it's a really powerful sort of articulation of how people are using Platform Equinix today. So on the right-hand side, you can see how we're continuing to invest behind that. We're now at 6 continents. We are running out of continents. I'll grant you that. But we have plenty of room left on countries and even more on metros, right? There are 200 countries out there. We're in 32. We do believe that we continue to be the best manifestation of the digital edge, and we are going to be -- continue to be selective about where that expansion needs to occur, but it will continue to need to occur. And so I think you'll continue to see us invest behind the expansion of our platform, and I'll talk more about that a little bit later as well. Secondly, customers really are demanding and needing that their infrastructure be more cloud connected. Cloud is transformational, and I have talked about it many times and characterize Equinix as in many respects, the trusted center of a cloud -- an increasingly cloud-first world. And our interconnection performance continues to show up in that way. Interconnections to hyperscalers are the single fastest growing element of our interconnection portfolio, growing at 16% CAGR and now at 64,000 or about 15% of the total interconnections built over the course of our history. And again, I think that's going to continue to over-index in that regard. And if you look at provision capacity on Equinix Fabric, which is really the primary means by which people are interconnecting to these clouds, it is growing at a 42% CAGR given the significant increases that are occurring in average connection size in bandwidth. Now 178,000 gigabits per second, again, growing at 42%. And so we're continuing to invest in ensuring that we are that trusted center of the cloud-first world. And it starts really with our investment that we've made, and we set out a number of years ago to try to be the center of that cloud ecosystem, and said we have to go win network knows and on-ramps for all the major hyperscalers. And we've been enormously successful in that pursuit. Let me show you a little bit what that looks like graphic. I know this is hard to see from out there, but I'll orient you around it, and you'll see it in the online version of the materials that are posted. This is our map of locations around the world. This shows roughly the top 50 or so markets that are out there and all the markets in which we have some level of native cloud connectivity. Each of the bars shows essentially the number of clouds that we have connectivity to. And if they're a solid color, that means we have a native cloud on-ramp to that cloud provider. And so what you see is all these sort of large bars that are there means that we have deep multi-cloud connectivity in all of these markets. We have 210 cloud on-ramps, have added 35 since our last Analyst Day together. And we have -- you now -- anybody who has decided that hybrid and multi-cloud is their architecture of choice. By selecting Equinix as their partner, they can immediately access, as you'll see here, 25 markets around the world where the top 3 cloud providers are simultaneously available and 12 markets around the world where 5 or more of the cloud providers are available. No other provider in the world can support more than 5 in more than 1 location, and we have it in 12. And so we continue to be really the dominant force in cloud on-ramps and cloud connectivity through the combination of our coverage and cloud fabric. Customers also are continuing to invest in ensuring that their digital infrastructure is ecosystem enabled. And we've done a phenomenal job of attracting the magnets that fuel these ecosystems. Essentially all of the top providers in all the major sectors that are really driving ecosystem growth and increasing returns phenomenon. Top 10 of 10 cloud providers, 10 of 10 media companies, 10 of 10 largest telecoms. And that, by the way, 10 of 10 on telecom goes to probably 100 of 100 or 200 to 200. It's virtually everybody is popped into our facilities around the world, 9 of the 10 largest banks and 85% of the Forbes 100 digital companies. And so Equinix continues to be the place really a critical point of nexus for digital transformation strategies around the world. And you've seen these charts probably over the years in terms of the health and the diversity of our ecosystems. And all of our ecosystems continue to have an increasing level of diversity, which is what this chart shows with again, 16% growth in unique AZ relationships in the cloud ecosystem, which actually matches the volume growth as well. So I showed 16% on an earlier slide, which is a different 16%, and that's volume growth. But at the same time, we're seeing 16% growth in the diversity of AZ relationships. And so incredibly healthy ecosystems being facilitated as customers need their infrastructure to be more ecosystem enabled. Next is more on demand. And this is an area that is newer and more challenging for us as we continue to extend our capabilities. But people want to interact with our platform in different ways, more programmatically, more API driven. And we're seeing that begin to be the case in terms of how people interact with our platform. And in the center, you see that we're investing in our digital services portfolio, which is shown on the right, Equinix Fabric, Equinix Metal and Network Edge, really the 3 cloudy type services that are really on demand, have on-demand availability for our customers. And those are growing at a 44% CAGR double the rate -- I'm sorry, triple the rate of our broader business. And so while -- and we're going to continue to invest in those on-demand services and improving the customer experience and making it more -- the sort of demand capturability of our data center services footprint also continue to evolve in those same ways. And finally, customers are demanding their digital infrastructure to be more sustainable. And this, I think, is an area where we're distinctively advantaged. Gartner's recent survey finds that 75% of companies are going to increase their spend with IT vendors who have a demonstrable and committed time line and goals on sustainability. And vice versa, they're going to decrease the spend for those who do not. And so we've been able to really establish ourselves as the partner of choice for customers that are looking to meet their sustainability goals. And we've done that by continuing to invest. We believe -- we have a 96% renewable energy coverage in 2022 with a commitment to getting to 100%. We've -- as I said, we've got made a 23% reduction in our operational emissions against our 2019 baseline and have been recognized by a number of external parties for our commitment to sustainability, including an A rating on the CDP climate change report. So that ability for us to meet those evolving and changing needs of our customers is what fuels our ability to powerfully and passionately pursue our purpose every day. And that purpose as a company is to be the platform where the world comes together, enabling the innovations that enrich our work, our life and our planet. I say this one a lot, and it's something that I continue to believe gets our teams around the world to spring out of bed and to serve our customers every day and to be excited about the positive impact they're having on our world. And to fulfill that purpose, we aspire to a bold future vision for our platform. Continuing to build on the most differentiated and extensive physical footprint that we have, we often refer to ourselves again as the best manifestation of the digital edge with 248 data centers across 71 markets in country, 30-plus countries around the world. We're going to continue to have that foundation, something that is exceptionally difficult to duplicate, particularly in an environment where the capital to do that is harder and more expensive to come by. On top of that, physical footprint advantage, we're going to continue to build the most comprehensive portfolio of foundational infrastructure services to meet the needs of our customers. Both those who want to consume the more traditional interconnected colo and related services and those who want to consume more on-demand software-enabled digital services. And then the most comprehensive interconnection portfolio to really stitch all those together. But importantly, we want to package all of those and leverage the physical footprint on which they're built to build a fully modernized software-enabled platform that allows our customers to architect and assemble hybrid infrastructure where they need it, when they need it from a rich ecosystem of partners. That is going to require us to build and extend our capabilities in various ways. This sort of vertical text tier label that ecosystem enablement represents a substantial investment on our part to continue to make the ability -- make it easier for other technology providers, ecosystem partners to bring their value to Platform Equinix faster and easier to solve customer problems. The vast majority of the time, the customer solves its problem by combining our value with other technology partners, and we need to continue to reduce the friction required to make that possible. And on the left-hand side, sort of the other side of the 2-sided marketplace, continue to increase our ability to reach a broader set of customers, a broader set of personas and give them the customer experience that they want. That includes a traditional enterprise selling motion as well as channel and go -- other go-to-market sort of digital go-to-market, including product-led growth. So underneath that, we're going to continue to invest and prioritize the objectives and priorities that really sort of map to that platform vision. And so you've heard many of these already. We talk about our 4 Ps really continue to ensure that the business performs, sustaining and building on our booking's momentum. Mike is going to talk about that, driving operating leverage, which is unequivocally a priority for the business, maintaining a fortress balance sheet, which Keith is going to take us through and not only delivering on but expanding the scope of our xScale aspirations. Pressing our advantage in the interconnected colo business, extending both the capacity and the reach to serve our customers. It's really productizing our sustainability value proposition and tapping into a huge AI opportunity, which we'll talk more about. And then enabling the capabilities that are going to allow this vision of the platform, starting with product-led growth and the ability for our customers to self-serve our value proposition, really investing in that platform enablement to allow customers to deliver their value on our platform -- partners to deliver their value on our platform and evolving the go-to-market, which again, Mike is going to talk about in depth. And all of that done future -- done people first, investing in the future of work, where, why and how people work, investing in creating a culture where every person every day can say, "I'm safe, I belong and I matter." The center -- the centerpiece of our diversity inclusion and belonging efforts and continuing to evolve our talent to ensure we have the best people to execute on the vision. So I'm going to just touch on a few of these underlying pieces and then wrap and hand this off to Nicole and the team to talk a little bit more and start to get you a little bit of exposure to how our customers feel about all of this as well. On the xScale side, we have -- when we were here 5 years ago and laid out this early vision, it was not nearly this aggressive. But we have found huge market opportunity. I think we really were the leader in taking an approach that has now been frequently mimicked or attempted to. But I think we're in an incredible position to continue to expand our aspirations on xScale with 800-plus megawatts of planned capacity on the horizon. And by the way, this isn't wishes and dreams. This is 800 megawatts that are fully committed by some of the biggest balance sheets in the world. And again, the way we went about this is by attracting some of the most powerful players, the deepest pockets in private capital. And so these 800 megawatts are going to come to bear. By investing in xScale, we've been able to extend our relationship with hyperscalers, which now represent 550 megawatts sold across both our xScale and retail footprint. The retail business on the bottom there continues to grow as we have network nodes and other elements of the architecture that continue to support the hyperscalers. We do some level of on-balance sheet larger footprint, particularly for cloud on-ramps, and you're seeing the dark blue bar continue to scale out as xScale grows quickly. Altogether, resulting in about $1.5 billion, both on balance sheet and off. We don't consolidate all of that revenue, but that's the extent of our relationship with the hyperscalers, which again is growing at about 1.6x the broader business. Extending our reach. I want -- I've talked about this in depth. John will probably cover some of this in the Q&A -- I mean, in the panel session. But this is going to continue to be an area of focus for us. We believe there's incremental expansion for opportunities for us in the Asian markets in Africa and the Middle East, in portions of LatAm, and we're going to take a hard look at whether, how and when we might expand our aspirations in xScale in U.S., which I think is very relevant to the AI topic. Speaking of AI. AI is a clear demand catalyst, and we think one that is really well aligned to the Equinix advantages. Proximity and control, we think, are going to increasingly shape buying decisions. And even more so as we move through was probably a bit of a sort of a pig in the python relative to training requirements for AI. And as we move to more inference in the demand for inference deployments continues to accelerate. Customers are really demanding proximity to a variety of data sources to cloud, but more latency, more automation. And I think our platform and the breadth of our platform, retail data centers, xScale data centers, digital services and fabric represent a powerful sort of value proposition for AI as an opportunity to scale the business. And this, I think, is going to be a major driver in our next quarter century as we look ahead. And so with that, I'll finish where we always start, and that's with people. And so artificial intelligence will continue to be fueled by human intelligence. And so we're going to continue to invest in our people. We're going to continue to try to be the best, most compelling place for people to pursue their own vision, their own aspirations and do something that they believe is important. We're very proud of what we've built there in terms of the Magic of Equinix and a culture that is widely recognized as a place to attract, inspire and develop the best talent in the world. So with that, I'll wrap. I think I'm a little bit over my time, sorry, guys. But I think Equinix is uniquely positioned to capture an enormous opportunity ahead. And so with that, I'm going to leave you with a video that gives you a little insight from -- at a personal level into how people think about the Magic of Equinix that gives us this opportunity. [Presentation]

Please welcome Chief Transformation Officer, Nicole Collins; Executive Vice President and General Manager, Digital Services, Scott Crenshaw; and Executive Vice President and General Manager, Data Center Services, Jon Lin.

All right. Well, hello, everyone. It's great to be here. Thank all of you for being here. My name is Nicole Collins. I'm the Chief Transformation Officer here at Equinix. And I'm super excited to be joined by my friends and colleagues, Mr. Jon Lin, the leader of our Data Center Services Organization, and Mr. Scott Crenshaw, the leader of our Digital Services Organization. And we feel like the next 3 or 4 minutes, what could be incredibly valuable for us to go a little bit deeper into the vision that Charles shared to talk about our organizations and how will help drive scale, growth and execution towards that vision. And then we'll also dive into some strategic topics around data placement, AI and sustainability. So with that, if you're ready and you too are ready, we'll dive in then.

Let's do it.

All right. So Jon, it's hot off the plane from the Discover conference actually with HPE. So maybe we start there. How does it go? You were great on stage yesterday.

Yes. It's -- I mean, great energy and just -- super exciting to think about how we've been able to work with our partner ecosystem and just position ourselves with incredible brands being on the main stage with AWS, VMware, HPE and just talking about the future of hybrid cloud and the role that we can play in it to make it easier for customers and land all of that activity. It's just an incredible opportunity there.

Yes, a great job. And it was great to see the partnership on stage, right? So -- and actually, Jon, I'll start with you because you talked a lot yesterday as well about just our competitive advantage, which is our physical footprint, our IBXs. And I'd love for you to just go a little deeper maybe for a few minutes on what is firing you up about that strategy? And where do you see tremendous value in the future?

Yes. I mean when you think about our platform strategy as a whole, just building on the differentiation that we've built over 25 years now in the market around our global reach around the interconnection services that we provide that are unparalleled that are out there. The ecosystem of customers and partners that we've been able to build and the curation that we've done around that customer base, the trust that we've built both in terms of our operational reliability, but also our business model, also our business dynamic, how are we going to be performing there and being the neutral place for everyone in the land and also our entire focus around sustainability. When you start with that as the core, it's just an incredible moat to be able to build on top of. And so we think about, all right, well, that's amazing. It's an amazing business that we built there. How do we layer on top of that. And the data center portion of that is only part of the solution. We've heard that loud and clear from our customers. They're looking for easier ways to interact with us, easier ways to interact with our solutions there and consume that value. And I think of that in 2 ways, it becomes really exciting because, one, there's obviously revenue growth opportunity inside of those buckets. But 2, when you start building that relationship and integration into how the customers are using us, it becomes stickier, right? Once you start building that and become entrenched into the workflows it becomes a greater relationship and the switching cost becomes higher. And we've known that. We've seen that. Its digital services is not new to us. We've been building this for a while now and the track record that we've seen with fabric and other service offerings. For customers that take both data center services and digital services, they spend 6x more on the colocation and data center services with us than customers that are just taking data center services. So that gives you an idea of just how powerful that is for the portfolio.

Yes, totally. We know that customers are looking for those new capabilities and ways of doing business, right, Scott, which leads me to you, right? When we think about digital services, what thoughts come to mind when you start to think about our customers evolving, IT needs and how we can meet those?

It's really a profound change that's happening in the market because customers are increasingly consuming their infrastructure in new ways. They want to consume infrastructure via software on-demand. And so what we're doing with digital services is delivering the core value proposition of Equinix, the core differentiation of Platform Equinix. But we're doing so on-demand, so they can consume it via software. And as enterprises increasingly move to hybrid multi-cloud architectures as their standard for IT. They find that they need a place to have some of their workloads and data that aren't in the hyperscalers, but are adjacent to the hyperscalers, and that is the fundamental demand driver that we're satisfying. They're asking us to deliver the value of Platform Equinix, on-demand as-a-service delivered via APIs and infrastructures code. And -- the -- as Charles said, the world of applications and data become more distributed, so they need to connect applications. They're running in 1 cloud service provider to another, perhaps running an HP, GreenLake or Dell, APACs, or to applications that are running inside an app, one of the colo facilities. And so what we're doing with digital services is we're building an inventory of services that allow them to assemble solutions from our capabilities and our ecosystem partners capabilities. I mean fundamentally, with digital services, what we're doing is we're following our customers' evolution. And as their needs evolve, we're expanding our offering set to conform to those needs. And as we do so, our position as the trusted neutral partner in this complex world becomes so much more important.

Yes. No question, the acceleration of that hybrid cloud will mean we have to provide offerings that allow our customers to take better advantage of that opportunity, right, which will be very critical for us. And so maybe we click down there a little, Jon. And when we say like data center services, what do we mean?

Yes. It's -- I mean, everything physical related with the business. You think about the real estate that we need to acquire, the construction work that we need to do, the data centers that we operate, the location services that we're offering our customers, our xScale portfolio, how we can leverage that, our supply chain work that we're doing every day to make sure we're staying in front of that, and our physical interconnection, making sure that we're as efficient and scalable and secure as possible to help these customers go ahead and drive and run their business and infrastructure together. And again, all through a lens of, how can we make sure we're doing right by the planet on a sustainable basis going forward?

Yes, we're definitely going to come back to sustainability, right? And Scott, our digital offerings, they build on the strength of that data center services foundation, right? Would you share some of the details around our digital offerings in more of?

Yes. As Charles showed on one of his charts, the set of infrastructure services we're providing right now on-demand as-a-service, accessible via software includes our bare metals compute service, Equinix Metal, software-defining interconnection, which is the fabric and via our ecosystem partner, storage. So it's the basic collection of IT services that enterprises need. And we make these accessible to our customers in the same way that they're used to consuming cloud services, and that's via software. It's a really a good fit for many of our customers, high-performance or highly cloud-connected workloads and data. And so the other part of the Equinix Metal, Fabric, we have Network Edge, which is our virtual network functions as-a-service product the way to get network components that are available on-demand in a virtual rev than the physical format. So if we look at Metal, for instance, what Metal allows customers to do is consume a complete server that they don't have to share, and they can consume it as-a-service. Contrast this with cloud virtual machines, when you get a cloud virtual machine, you're sharing a server. And by having the full capabilities that server dedicated to you, not share with anyone else, you get to have control over it in ways that allow to make it more performant and arguably more secure. One of our customers, the big telco company, Orange is using Metal as the basis for their international next-generation network. So they're delivering 5G SD-WAN, CDN and voice services, and they can -- around the world, and they can spin these up very rapidly because they can provision these servers almost instantly on-demand via software that's in a huge contrast they need to buy and ship, and configure and provision those physical servers around the world themselves. So it allows them to respond to demand changes faster. It allows them to be more agile and it just gives them a great deal of flexibility. And as we've offered these services, our customers -- well, they've responded very enthusiastically. And we've used that feedback to drive and expansion of our road map and expansion of our ecosystem capabilities. One great example of this is that earlier in the year, we announced a partnership with VMware to provide VMware Cloud on top of Equinix Metal. And this is a joint offering that will be an ideal home for many enterprises as they move their applications out of their own facilities, well, they want to move them into cloud-like environment, but with high performance or with very favorable economics. So for the so-called lift-and-shift workloads, we think this is going to be a really big hit for a portion of the enterprise workload portfolio. Another example of this is our Network Edge offering, right? Customers with Network Edge can set up points of presence around the world in minutes. And that lets them accelerate their time to market with new offerings, address new markets quickly, have the flexibility to spin up and spin down capacity in new markets in a way that's just game changing compared to what it was like when they had to do this with physical network equipment. One customer of ours, a major airline is using Network Edge to rapidly spin up entry into new markets and save themselves months, sometimes quarters in their -- the pace at which they can respond to new demand. So fundamentally, we view digital services as an accelerant to our business. It gives us the opportunity to expand our value to the customers, capture new workloads and data and ultimately capture more of our customers' wallet share. And in doing so, we're exposing the core differentiation of Equinix to new users inside these customers and in new ways. And so we think that's really powerful and provides us with a lot of upside.

Yes, absolutely. It's physical and virtual isn't either/or anymore, right? It's both end-to-end. And I think something powerful that we also have, obviously, as an advantage is our interconnection strategy. And I think it would be good for both of you to chat about this for a second, but that across both sides is incredibly compelling. So Jon, maybe I'll start with you, right? Just interconnection at a basic level, what is it? But also, why is it so important?

Yes. I mean we've been talking about interconnection for so long for the folks that have been tracking our story and just as our secret sauce, that probably isn't so secret anymore. But the intent and focus behind what we do there is how do we help our customers scale and drive their traffic in a private secure on-demand way. And that started with the genesis of the company, helping the Internet scale at large. And by doing that and thinking through with intent all along the way, what other use cases can we solve them with that capacity? How can we be looking out there? I've had the benefit of being at Equinix now like 14 years, and every conversation that we have on far-reaching strategy ends up at some point with, well, does it make more bits come to our sites. The answer is yes, like let's invest behind that. Let's figure that out. And that's proven like incredibly powerful for us all along the path. You look at our investments in pursuit of subsea stations. 5, 10 years ago, we were like why are we doing this? Like, well, we'll probably drive more bits back into our site. We look at cloud on ramps. Our conversations on how can we pivot them from just using the Internet to doing private interconnection that's going to be a plus. Let's do that. And we drill that in ways that no other provider could help them envision because it didn't even exist as a solution in the market and so that's really powerful. And again, that position of trust we have, they know that at the end of the day, we're trying to help them find new ways to use us and expand their market opportunity across the board with all the providers and that's why we have the track record we do with the service provider community. And that's continued to grow in scale. I think our Internet exchange is now delivering over 30 terabits per second of capacity, and that's the public exchanges. And we know private traffic is growing even faster than that. In our 2023 GXI report, we said, hey, that's -- it's over 35% CAGR of overall bandwidth and the private side is growing 50% faster with 15x the volume. So that trajectory continues to accelerate.

Yes, scale is crazy that we're seeing, right? And exciting to think about that and how that will help our customers achieve their goals. Scott, I'd love your perspective on it as well. Where do you see significant value?

Well, I mean, as customers are building distributed applications as they're using multi-cloud and hybrid cloud is their core infrastructure. By definition, that requires a great deal of connectivity between the clouds, among the clouds with their ecosystems. And for some of this, they can use the public Internet, but they increasingly find that they need performance, they need reliability and they need security. And so they come to Equinix for that. And so with digital services, what we're doing is we're making the capabilities of that interconnection available in new ways enabled via software and on-demand. This is just sort of the core evolution of our offering set and the core value prop of Equinix being exposed to more and more users and more and more applications than our customers.

Yes. Yes. So really, whether it's Rack stat, click and configure, it's all about simplicity, right, and making sure that we give the optionality to our customers and our partners. And Scott, I'll stay with you for a second, right? When you think about next step on market permission around digital services, and is it competitive with our cloud providers? I'd love to know your thoughts there.

Yes. So I mean, first of all, we have market permission to extend the digital services and know it's not competitive with the hyperscalers, it's quite the opposite. I mean when you think about what we're doing with digital services, we are taking the core value proposition of Equinix and extending it to different use cases and different users. And we're following the evolution of what our customers are asking for. So it's an extension of the core capabilities, the core value pillars of Equinix, location and reach, interconnection and ecosystem. And in some cases, the people consuming this are the folks inside our customers, the personas insider customers that we already have relationships with. But in some cases, we actually have to forge new relationships and expose our capabilities to different people. We're moving away from primary focus around people who run networks, and network operations and infrastructure and starting to talk to people who are application owners, a line of business owners or what we call the practitioner community. These are people who build applications or run applications or optimize applications or architect applications. And we're reaching these new people through both our full-service motion, our traditional full-service motion, but also through an emerging capability we call product-led growth. And while our product-led growth initiatives are early, the results are really encouraging. Now when we say product-led growth, what we really mean is the ability to give a wonderful, easy, self-service experience, so that users can try, can learn about, try, evaluate, consume and then grow their consumption of our on-demand offerings without intervention from us. And it's -- although very early stages, the results are really encouraging. We had -- in the first quarter, I think we had 300% increase in traffic to our main PAG site deployed on equinix.com, I encourage everybody to go try it out, buy a server. We value your revenue. And -- the tail end of that pipeline, we've seen over a 400% growth in the users who convert to 12-month server reservations. So again, early days, but very, very encouraging. And I think that is -- that provides clear proof that we have market permission to extend into the on-demand as-a-service world and customers are quite enthusiastic about it. Now when we speak about hyperscalers, what we're doing is not competitive with hyperscalers. It's a big complement and enabler for them. We are accelerating enterprise cloud adoption by making digital transformation faster and more successful. We're not trying to change customers' minds about where their workloads or data should go, we're just giving them options so they can find the optimal place and make their transformation work. And that's a win-win-win for our customers, for our partners like the hyperscalers and also for Equinix. And so we're doing so, we're seeing our ecosystem expand in new ways. I mean I think one of the key examples of the hyperscaler support for this is the announcement we made on Monday with Google. We are -- Google has chosen our new capabilities as the basis for a lot of what they do in connecting their customers to other clouds. And that's really a powerful relationship. I think they're showing very clearly that they value us. And I think we'll -- we believe that the ecosystem that we are developing, the services we're providing with our hyperscalers will continue to grow and deliver unique value for customers. We're also seeing the ecosystem develop in other ways, too. For example, there's a new emergent group of software vendors that are providing multi-cloud networking software. And these are virtual machines that make it easy for someone building an application in Google to find their application in AWS and connect them. And they can do this over the public Internet, but as they start to sell to enterprise customers, those customers increasingly want them to use Fabric because they want better performance, better security, better reliability. And in many cases, these vendors are building their solutions on top of Metal or on top of Network Edge. And I throw HPE and also Dell into the mix too. We're seeing an expansion in the depth and breadth of our portfolio of partners as we expand the depth and breadth of our portfolio of products. And fundamentally, what we're doing here is we're meeting customers where they want to be met where customers have a wide portfolio of applications in different stages of the digital transformation journey. And in some cases, what they need is colo to help them with that. But in other cases, it's an on-demand digital service. And we're meeting the customers increasingly where they need to be more -- that adds a lot of value.

I think it's a combination of where they need to be met and who they want to meet, knowing that it's not just those providers for today, but again, our commitment and what they've seen for us is we're always going to be talking to every technology provider that matters in the industry, and they're going to be available at Equinix. Every single one like full stop. So when you talk to an enterprise and they're like, well, I have a requirement now, but I can -- well, we can help you future proof that requirement and deployment for the next 5, 10, 15, however long your life cycle is of whatever your digital transformation is going to look like, they know that they can trust that those people will be at our sites.

That's right. Yes. It's incredibly powerful, right. And Scott, I know I speak on behalf of the whole team and thanking you for the leadership in this area since you've joined, right? So really appreciative of that. One thing you both brought up was scale and reach, right? And I know the 3 of us are thinking about that a lot, right, when we look at that platform evolution and how we want to pace towards that. I think we should touch on that for a second. When you think about the scale and reach elements that our platform vision now offers customers, what excites you the most when you think about your respective areas? Jon, maybe you want to jump in first.

Yes. I mean, scale, first off, I love building stuff. All credit to Ralph and our design and construction teams around the world have got 50 major projects around the world going in 25 countries right now, which is incredible, and we're going to continue to deliver that. That is challenging. I think the environment is tough. We've talked about supply chain and how ahead of the curve we are there and making sure we're leaning in about using xScale and using other people's money to be able to help deliver incremental capacity into the market, which is incredibly powerful. And so being able to continue to drive the scale of the business as we continue to see market trends and secular drivers on growth of data centers. But scale also means, how can we keep making it easier for customers and easier for our employees? How do we drive additional operating leverage? How can we use automation and technology to reduce the amount of work and kind of gain for all of our customers, so we can continue to offer our world-class customer support, but do it more efficiently and effectively in the years ahead. And on the reach side, as Charles mentioned, obviously, 248 data centers in 71 metros in 32 countries, and we're not done. And we've talked about our expansion opportunities and done recent announcements in Asian, and we are still not done, Jeremy's in the crowd here and he's continuing to advocate and our customers, more importantly, are advocating on, hey, where are we going next, not just in Asian, but also in Middle East, in Africa, in the rest of Latin America. And so you'll continue to hear us again, be customer-led on that demand, but digital transformation is continuing to accelerate around the world, and that just creates opportunities for us to go ahead and deliver there.

Yes. Scott, how about you?

Well, I mean, when we think about our on-demand services, we're enabling customers to rapidly scale up, rapidly expand and as we think about the need for cloud adjacency for workloads and data, we think that's a key dimension capturing even a portion of those workloads gives us the chance to scale substantially, really expand what we've been doing and provide a new level of flexibility and growth. I think that as -- we think about digital services, it's going to be a significant growth driver for us. We're pretty early in the investment curve here. But we're already seeing encouraged -- very encouraging positive momentum here. And I think that -- it's a high revenue opportunity. And as we grow scale, the unit economics are going to be likely be as attractive, maybe even more attractive than what we have in data center services. So there's a real scale opportunity there. But when we think about reach, what we're doing is we're targeting new personas and new use cases and new workloads and new data inside our customers. And so that just expands the value that we can provide to more and more people, more and more parts of the budget, the wallet that our existing customers have, and that's a wonderful expansion opportunity. Now I know when we think about scale and reach, there's a lot of implications for how the company adapts to capitalize on this opportunity and to do so with efficiency. And that is the key focus of the transformation obviously that we built, Nicole. So how do you think about it?

Yes. I do wake up every day thinking about simplification and efficiency, right? And we stood the team up over about a year ago, I guess, now and couldn't be more proud of the team we've built. And really, we did it on 3 big pillars. One was deliver efficiencies. Two was fuel growth. And the third was really just the acceleration into this new platform vision and how do we orchestrate and organize around that. And I think there are critical areas that I put on my shoulders to own for the team, right? One is we've got to have a very healthy operating model internally. And how do we think about acting like a connective tissue across our functional areas, not just ours, but all of our other team members, right? Two is prioritization. What becomes really important when it's easy to get distracted because there's so much going on is keeping the most important stuff. The most important stuff, right? And I think we've worked really hard as a team to lock on those priorities for the next 18, 24 months and really build execution plans around that. And then lastly, Jon, you mentioned it, right, focus on process -- processes, excuse me and just customer experience, right, and making sure we keep customer centricity at the center of everything we do and decide. It should make it easier for customers and partners to do business with us. So yes, so it is a daily thought.

And I would just give like a huge thanks to Nicole, you and the entire team. I think when you look at the impact that we're driving and the rate of change that has candidly accelerated quite a bit in the last year -- just the connective tissue that your team provides on making sure that we're still orchestrating that well, not like stepping in or how to think around all of that alignment, but then helping us keep the pressure on, right, keep the rate of change going is incredibly valuable.

Thank you, I appreciate that. One team, one goal, right? All right. So with that, let's dive into some strategic topics, and I know the audience is probably excited to hear from us on, right? And maybe we start with data. Charles talked a lot about it. It's at the center of everything right now. Data placement and workloads are becoming a more critical decisions for our customers to make. And Scott, I know you're thinking about this a lot, right? And I'd love to start with you on just what's top of mind for you? What do you think is top of mind for customers and share some of that with the team today?

Yes. Sure, maybe 2 thoughts here. I mean the first is that as customers move to cloud, they're discovering that workload and data placement really matter because what happens is they run into surprises with respect to cost, with respect to performance, with respect to liability. And I mean cloud transformations can go very, very well. And best practice is typically you rearchitect a portion, but a small portion of the enterprise workloads to be cloud native. And that yields really -- generally yields really good advantages as they move to cloud. But for -- but that re-architecture it's expensive. It takes time, incur some risk. And so -- another part of the best practice, you typically don't re-architect your whole portfolio you re-architecture a small portion. And you do what's called lift and shifting. You move workloads from on-prem into a cloud with using a virtual machine and relatively few changes to the application. And that's a big area where these surprises happen. And so what we're discovering is that our enterprise customers are finding that they need for some portion of that workload portfolio, they need a place that's not in a hyperscaler for the application, but adjacent to the hyperscaler for the application. And that can give them the economics they need, the performance or reliability that they need. And so that's a big area of interest and opportunity. It's one of the drivers for that relationship with VMware. Another area of real interest is that customers are getting much more sophisticated about where data needs to be located. Because if you have data that needs to be shared between different clouds, between clouds and other SaaS applications or with your colo or you're on-prem apps. It can be very expensive, and you can also incur significant performance concerns. And sometimes, data sovereignty concerns, if you're not careful about your data placement. And so we're seeing a lot of interest and demand for cloud adjacent data placement. By storing it in Equinix, either in colo or in our digital services offerings. Customers can get many of the advantages of cloud, but with the neutrality and the ability to be very close in terms of latency to all of the third parties they need to share that data, use that data with. And so that's becoming an increasing driver for our growth.

When you think about -- for years now, we've been talking about, hey, the right workload or the right use case in the right location and now it's also in which platform do we want that running on, right? How do we help support our customers? Is it cloud? Is it colo? Is it something in between? Is it a digital service. Now we've got a full solution that we can talk to the customer about and meet them wherever they are in kind of that transition or technology transformation path or candidly, on the buying journey, right? So we can engage right there whenever they need that. And those workloads can be different. And so again, I think the work that Mike and the team have done on our sales transformation educating, being able to be conversant in those discussions has been incredible and again, a huge differentiator for us as we're talking with the enterprise. And I think the other part that we're seeing on the workload in addition to location now on kind of site proximity on latency being in kind of, again, which metro do you want to be in based off of your end user. But also what we're seeing is these workloads need to come out of their enterprise data centers because enterprise data centers are just hard, right? I think the sustainability requirements that are driving the needs for all organizations, along with the technology advancements that are happening, the kind of densities that are increasing, the efficiencies that can be driven by going into a purpose-built scaled facilities such as ourselves is huge. And so being able to be the easy button then for sustainable solutions saying, like, hey, you want your workload to actually be sustainable, just put it in Equinix and here are the varieties of opportunities that are on in Equinix is immense.

Yes. And still very much related to data is the topic of AI, right? Which is top of mind for everyone, the next era of technology. I know we're thinking about it daily. I know all of you are thinking about it...

Did you see all the laptops come out.

Exactly everyone [indiscernible] we always knew that chatGPT in college, right? Life would have been so much easier. My niece and nephew haven't made right now, right? So -- but Jon, I mean, this sits direct at the heart of your world right now and would love for you to share some of your energy and excitement around this new technology with the team here?

Yes. No. I mean I think it's -- obviously, the conversation increased over the last like 3 months has been intense and amazing. But this is one of those areas where, again, we've been practicing and talking about this for years now with our customers in the previous Analyst Day, that was 2 years ago. Now Jensen was with us talking about delivering and launching AI LaunchPad as-a-service at Equinix. And so we've been on the forefront of these discussions, finding out where customers need this, how they can apply this and actually deploy this around -- with Equinix and kind of across our footprint. And there's 2 different sets there, as we talked about, I think, both the training models that need to happen there. And that training use case ends up being not particularly latency-sensitive, but incredibly like data sensitive about the amount in quantity that needs to be loaded in there and increasingly needs to be secure. I think there's a lot of concerns about data leakage. You've seen that in the early days of ChatGPT around, how is the enterprise going to handle that, how do we make sure that, that data actually stays private and resident within a training model that can be controlled by the enterprise, and a huge opportunity for us as we think about that as just another private cloud to some degree. But -- and then once that training is done and the model is created, well, that model is only delivering value if it's being provided to the user as quickly as possible. And so if you're doing ChatGPT, and it ends up taking 30 seconds to be able to generate that result or 100 milliseconds. Well, that doesn't feel conversational. That doesn't feel like an actual person having that talk with you. And so being as close to the edge as possible, whether that's for end user purposes or closer towards the manufacturing floor or whatever the use case can be, that's why we have our footprint there. And so we've got a great solution for both. And those workloads on the training side can be large. I think for the enterprise, there are not hundreds of megawatts or tens of megawatts even their megawatts, which we can go ahead and house in our facilities. On the inference side, those are footprints that actually fit extremely well within our retail footprint and inclusive of our metal footprint, right? We've had A100 GPUs deployed on Metal for a year plus now, and so we can help support some of these workloads as they're coming. And again, we're certainly seeing a lot of interest and activity around that space. But I do think it's still early days. I do think a lot of the work that our enterprises have been doing and using around machine learning and AI is going to get more investment in the near-term and be able to create more business outcomes as everyone thinks about, well, how do I use generative AI in a different way, which maybe end up being the next wave of growth as Charles said, for next quarter century for us.

That's right. Yes. And Charles also mentioned our xScale strategy could really play a significant role here potentially, right? You want to share some?

Yes. I mean when you look at really generation of large language models and kind of the size and scale that, that ends up needing to be deployed against, it is the east-west traffic, kind of the internode traffic ends up being extremely important. So they need huge amounts of cluster density in those use cases. And so probably the number of providers that will be able to actually build that and afford to have that level of scale are the hyperscalers that are already our customers that are used to deploying with us in our xScale facilities. And so we've been thinking very closely and working with them around, well, what does that mean in terms of the design that we need to support for them. The densities for them could be higher around this, kind of the scale of this from a campus perspective, could be larger. How do we make sure we do that and xScale is an incredible tool for us there.

Yes. I mean it's going to be fun to watch and be right at the center of all of this, right? So more great things to come, I'm sure. We've got a few minutes left, but I want to go back and touch on sustainability for a few minutes, right? I know this is a very front and center for us as a team. I know it's critical to all the companies around the world right now. And Jon, you and Keith's organization are really leading the charge here on our sustainability strategy. And I know as leaders, we're all very proud of the progress we've already made and the progress we're going to make, right, in the near future. And so it'd probably be great for you to share some updates with the team today?

Yes. I mean, sustainability is such a -- it's been such a driver for us for such a long period of time that we were talking about it before it became a trend before it became a requirement. And that gave us a head start candidly about one, organizing and thinking through what does it really mean? How should we be approaching this? How do we make sure what we're doing is real, right? I think that say-do ratio, as Charles mentioned, is like -- so front and center around that is -- customers can tell what greenwashing looks like, right? The market can tell what greenwashing looks like. And it's been incredibly important for us to say when we're making statements, when we're actually setting targets, when we're doing projects, these are very real like a testable items that we can deliver. And that's important for our customer. Now increasingly, the reporting requirements that they're thinking about around their sustainability requirements are very challenging. And again, we can become an easy button for them. That's not like hand waving, not estimates like this is actually what your footprint looks like. This is how we're supporting it. This is how we're delivering that. And so that's incredibly important for our customers. And the investment that we've been making in engagement with not just our customers, our technology providers, our supply chain, but also with regulatory bodies. Being front and center there, working even with, in some cases, our competitors to band together to think about what the future of our industry needs to look like is just incredibly powerful and we're very proud of leading in that regard. We've made statements about how we're thinking about moving our standards on our SLAs for environmental's and actually changing that to deliver a more sustainable future. Like those are the areas -- it's not just about what you're building, it's what you're operating, how can we make that more efficient every single day, and then deliver that for our customers. And so more to come there. It's a huge area of investment focus and pride for all of us in what we're doing every day.

Yes, I mean it's truly powerful. I think you say it well, right? The word pride comes to mind as leaders and just as humans, right, to know that we're part of something that's going to hopefully leave the planet in a better place than where we found it, right? Well, listen, we're at time. I want to thank both of you for being up here and sharing those perspectives with the team, right. And we want to thank all of you. We recognize that you took time out of your day to come here and be part of our team for the day, and that really fuels us and drives us to continue to accelerate and move towards the platform vision that Charles shared today. So a few quick logistics. We're actually going to break for lunch. There are kiosks downstairs where we have even more team members and leaders here to chat with you and answer any further questions. So we'll meet back in here at 1:00 for the continuation of Analyst Day and hear from Mike Campbell, Taylor and customers and also from Charles and Keith and wrap with the executive Q&A. All right. Thank you very much, team. Enjoy lunch.

Please welcome, President of the Americas, Terra Risser.

Thank you, everyone. So this morning, you heard from Charles about our platform vision. You heard from John, Scott and Nicole about the various ways that you can leverage Platform Equinix. And I have the distinct honor and pleasure of really being here to talk about how it all comes together to talk about our purpose, our customers. If you ask our customers and you think of the words they might say. They may say critical infrastructure, digital, yes, we all know that. But you heard up there in that video that our customers are also talking about other words, really prominent words actually enable, access, innovation, easier quicker. You heard vision, and of course, you heard partner. Equinix is really a true partner. We work to understand our customers' challenges, and we make sure that we can provide a platform to deliver on the promises that they've made to their own customers. That's what this is really about. And it's why we're purpose-built to solve for any workload anywhere in the world and achieved at software speed. We thoughtfully selected a diverse group of customers to bring here today to really show you that global reach interconnection, ecosystems, trust and sustainability are fundamental in why they partner with us, and that's really regardless of the industry, and I hope that really comes through today. And to that end, we are pleased to host one of the top scaling service providers, a large and critical enterprise customer and a $1 trillion innovation customer. So really, really very exciting attendees here today. We are so thankful for the time that they're willing to spend with us and each of whom has been partnering with us for a number of years. So today, I'll be chatting with Misha Kuperman, Senior Vice President of Cloud Operations and Ecosystems at Zscaler, Lou Madono, Senior Vice President, Chief Information Security Officer and Global Head of Corporate IT at NASDAQ. He's very busy. And Matt Hill, VP of Global AI platform solutions at NVIDIA. So first up, as the world's largest in-line cloud security platform, Zscaler protects thousands of customers from cyber attacks and data loss. So without further ado, I'd love to welcome Micha Cooperman. Micha come on up to the stage. I'm so excited to have you here. I know the audience is excited, and we really appreciate you taking the time out. You are very familiar with Equinix and have a long history with us and so we were really hoping you could tell us a little bit about your background and what you've done with Equinix over the years. Let's start with that.

Yes. I've been a customer for over 20 years, I think, right around there. I know you guys have your birthday coming up. Okay. I wish although that would make me older. And for the entirety of that 20 years, it was really around building global infrastructure for service providers such as content delivery networks. And now the last 7 years, I think, basically building the world's largest cloud security company that supports over 50 million users and their workloads for the largest organizations. In fact, I think Equinix has almost the same Global 2000 penetration as we do. So that's really interesting.

Well, it's incredible. And thank you for your long partnership. We would like to continue it for the next 20, I mean if you want to keep going with us here, we'd love it. So we talk about Zscaler as a scaled service provider, and there's a lot more to know about what Zscaler does and what you provide your customers and also, what role Equinix plays in that? So do you mind just sharing a little bit about that?

Yes. So as I said before, we're the largest cloud security company. We're distributed in over 150 markets, hundreds, if not thousands of buildings. And really, if you look at our gross margins, they're very good and very important to us. And Equinix really helps us operate at scale in any market. It helps my team maintain sanity and consistency in how we procure data center and how we actually operate data centers because many people don't think beyond the sales order, right? The sales order is the easy part, keeping that thing up and running and supporting the largest enterprises is really the challenge. And more importantly, we also connect -- nobody wants to go to Zscaler, people go through us to get somewhere. So our customers' workloads, our customers' employees are trying to get to places that are, for the most part, all present inside of Equinix facility. So I don't have to try to run fiber across metropolitan area networks. I don't have to buy waves. I'm getting a little geeky here, but effectively, I can basically procure data center space almost anywhere and be connected to the things in places I need to be connected to.

Yes. Well, we love your geekiness Keep it going. It's okay. And we know that Ralph here is in the front row and smiling when you were talking about the criticality of operations and not just getting the deal in the door. So we can certainly appreciate that. So you mentioned the number of markets that Zscalers in around the globe. Could you talk a little bit more about that? I think you said 150? So we've got a ways to go. We can continue to grow our market position in order to keep up with you, but talk a little bit about how you kind of set up your markets around the globe and how we play into that.

Yes, there's, I'd say, 2 major areas. One is existing and one is emerging. I'll talk about the emerging one in a second. But the existing one is really we go to where the people are. We go to where the growth is. So a lot of multinational enterprises, a lot of governments, a lot of educational systems. They're located in places where Equinix exists. And so this is how we leverage Equinix is when we want to enter market if Equinix is there, it makes life a lot easier. One thing always tell my accounting team is you guys aren't the cheapest, but you bring good value, right? It's not just about the dollar, but really about what happens after, just like with sales orders. And then the emerging area, really, I'm really excited about the partnership that Zscaler and Equinix have. We're leveraging some of the metal offerings. We're leveraging network edge. And the reason that this is really interesting is because a lot of our customers are in Equinix. And again, as you think about Zscaler, we started with securing the employees of these large enterprises and then eventually turned into securing workloads and machines and things that communicate with other things. And all of that generally is -- Equinix is the heart of that. And so we see a lot of synergy and being able to run workloads in basically things like metal and other places because they're close and approximate to our customers, and we can offer more aggressive SLAs, for example, and just good performance that you can't offer anywhere else, frankly.

Yes. Yes. Well, I appreciate continued geekiness there. So we were -- we've been really working with you on the digital services side. And I know that you are really looking at other ways that our global platform helps Zscaler. Do you want to expand a little bit more on kind of the digital service aspect of things? I know you briefly touched on metal, but...

Yes. So I mean, again, I would say, without getting too geeky, it's back to the workloads and also the special use cases. I mean, I'm sure you guys see where Amazon offers outpost and there's Azure on-prem and GCP. So this hybrid world is here to stay, especially in the regulated and the government front, like people still need to have specialized workloads or we call crown jewel workloads that are not destined for the cloud for whatever reason. There's some talk about repatriation of some of these workloads into basically data centers or having the redundancy. And so this is the area, I think, where the most cooperation around these digital services will be with Zscaler and Equinix.

Awesome. So I know that last week, actually, there was some excitement around how Zscaler is actually partnering with Equinix, and we actually have Justin who is on stage that last week at your Zenith Live event, would you tell us a little bit more about what we're doing together?

Yes. I think I've been plugging the partnership pretty hard here. But again, this was really around the existing demand that we see from our customers. Zscaler, many people don't know about this, but we run a certain percentage of our workloads as private workloads. And that's -- this has been historically true. Again, if you think about government, federal, highly regulated industry. It's not a monolithic like you go to the -- people have a vision to go to the cloud, but it's not monolithic. Like, yes, 95% of your workload go, but 5% stay.So the partnership is really about providing and reducing friction for customers to go under cloud journey, but also secure the workloads that have to stay in the data center. And what our customers tell us is that, look, we want you to do this as a service, right? And ultimately, deploying private infrastructure, while we can do that for our customers. It's not our forte. We're a cloud provider, we're a security cloud. And so partnering with Equinix really makes sense because we can now cover the entire enterprise, especially if they happen to be a joint customer, and there's a lot of overlap.

Yes. And you actually referenced that your customers want everything easier. They want to make it streamlined and they want you all to deliver that. And how does -- how do we partner together specifically on that ease of doing business? Do you see things that Equinix is doing that helps make your lives easier on the Zscaler side so you can deliver that experience through to your customers?

Yes. Right now, I'm speaking as an operator, right? I'm a consumer of the service, and I can tell you I can have a leaner team. It's much more consistent experience under the brand. There are other players out there that have a brand, but the experience underneath is still -- you're dealing with unique properties and at our scale, it's very hard. I don't want to -- have to go to a different portal to place an order or to file a ticket. The consistency of smart hands is very important. And frankly, also dealing with issues, right, as an operations person, I love it when my phone doesn't ring or when things are quiet, but we do something like 300 billion transactions per day. There's rarely a day when something doesn't go wrong. And having a trusted partner that we can call and we know we can resolve the issue is really critical, and that's a big value that Equinix brings to Zscaler.

Yes. Well, 300 billion transactions a day, that's like a hard number to even fathom. So thank you so much. We appreciate you being part of this. We're going to bring out our next guest. So next up, we actually have a large enterprise customer that you all will be very familiar with probably in this room. -- a leading global technology company, NASDAQ delivers a world-leading platform that improves liquidity, transparency and integrity of the global economy. So just a small importance there. And so I'd like to welcome to the stage Lu Madonna. Thanks for being here, Lou, come on out. Thank you. Thank you so much for joining us. It's so great to have you here today. So

I mentioned to a few of you when I was -- most of you have probably had this experience, right? In your careers when you're asked to participate on a panel discussion or invited to an event. And when my account rep, who I think he's in the audience, Bob O'Connell, asked me, my immediate reaction was absolutely. But I think most of you may have heard, we made -- we just announced a recent acquisition of ours. So that was going on in the background. So I was excited to be able to be here, but at the same time, I told Bob, Bob, I have to check, just to be sure. But I just want to be very clear, I'm really excited to be here, and I think it's a great event. So thank you for...

Well, an exciting announcement also that just happened. So we appreciate you taking the time and coming and joining us in the midst of any time there's an acquisition going on. We know how crazy it can get. As you saw earlier, we've gone through a number of those ourselves. So we completely understand and really appreciate the fact that you're here. So maybe share a little bit about what doing business with Equinix? Like how is it that you've been -- had such a long relationship with us? Why?

So my relationship actually proceeds by time at NASDAQ, but it's been about, I would say, about 15 years or so. And like every relationship that anyone has, there are certain ingredients that make it work and then there are certain ingredients that make it work really well, right? So the way I look at our relationship is the hardest thing to earn is it money, it's really about trust. And that's also the easiest thing to lose when you talk about trust. So for us, the reason we've been a customer for a long time and continue to be, is the trust factor. And I think that's something that I think resonates with most of your clients. They all know they can trust Equinix at any point. Now aside from trust, you got to deliver. Performance has to be there and the excellence in the performance has to be there. And then you have to innovate, right? So you have to put all that into perspective. And when we look at our vision at NASDAQ, and when we talk about being the trusted fabric of the world's financial systems, but we need partners that think the same way. And that's so important to us. And when we try to differentiate our services, we also -- we really worry about our customers. So the voice of the customer here is paramount. I think if you -- as an analyst, any day spent with your -- with the companies that you're focused on, when you get to hear from the customers, I think it's so important because it gives you the transparency, the insight into really what goes on. It's not always about pricing. It's not always about footprint in Equinix's case, it is footprint, by the way, because we love that. It's global. It's all over everywhere we want to expand to. We leverage Equinix when we can. So it's a lot of those factors that you have the trust, you have the client-centric and then you have the technology from an innovation standpoint. And you put all that together, and that's what we expect from a relationship.

Yes. Well, I love the first part around trust. I know that we've built that trust over the years working with you and your team. And I think we've innovated together and grown together, frankly. And so to have partners here on this stage that have done that with us is incredibly meaningful. So obviously, NASDAQ has many critical assets and certainly, data being a big piece of that. Can you share a little bit about how Equinix will really help you address data and critical assets over the next decade? What are you thinking about?

Sure. Sure. I think -- when you look at I talked about Nasdaq's vision, right? And you look at how we do our own strategic planning. We entered into this 10-year renewal with Equinix. So that was not an easy decision as much as we have a great trust for Equinix. You really have to plot long-term needs. What enablers will be -- will come into the marketplace? How do you maintain your leading positions as a global financial service organization. You have to put all those factors in the background. And then you look at our strategy is like how do we continue to innovate? How do we modernize all markets, not just those of our own or those of our customers. How do we help that? How do we help foster greater liquidity with the use of the infrastructure. How do we expand on that? So there's so many factors that come into play. And I think when you think of Equinix from our standpoint, you think of where are your customers, where do they live? Where do they exist, right? So the match or the crossover in our entire client base, if you ask them, you don't have to hear this from me, you can ask them directly or your other clients, it's probably in an Equinix data center. So when we think of Equinix and you think of our journey, which we announced to bring markets to the cloud, of which last year, we completed our first options market. You think of what a better way to do that, that's secure, that's scalable, that's trusted, right? Trusted again, a big factor here. And you take the best of what our premium and preferred cloud operators, which is AWS, and then you match that with the strength and the global reach of an Equinix. And you tie that with NASDAQ on top of that, and you talk about a global powerhouse, a truly trusted fabric of the world's financial system.

Yes. That's -- I mean that's an exciting picture that you're painting, and I know you're -- this acquisition is another proof point to the fact that you're continuing to innovate in this space. And so obviously, meeting the needs of your clients is your #1 focus as is ours. And so what do you really think about the role that Nasdaq is going to be playing in this like cloud-enabled capital markets world?

So I think a lot of what I said forgive me if I repeat myself, I'm big on repeating messages because I am a CECL, right? So that comes with the territory. You have to tell people more.

At least 7 times.

I can't do that. Why not? But flexibility is really key. And I think Micha made a couple of really strong points about workloads and the different considerations you have to have of workloads. And when you look at the different workloads, you also have to consider, again, your clients. So the majority of our clients sit within our Equinix facilities. So obviously, the on-ramp for anything that we do naturally in the cloud, and of course, there are government or regulatory hurdles involved when you take those steps. And this was a long process for us from watching our market systems to the cloud. So naturally for us, because of the significant overlap in our customer base, it made sense to build an outpost within the Equinix data centers. And we do have plans to have further expansion of that globally.

That's awesome. Do you want to talk a little bit more actually about how you kind of envision leveraging the combined capabilities of AWS and Equinix and how you see that expanding into this like hybrid multi-cloud architecture -- so even beyond what you have right now.

Sure. I mentioned AWS as a preferred cloud provider, but we do listen to our customers, and we do have engagements with Azure for portions of our environment. And it really is about leveraging multiple cloud providers. It's not just about one. You have to be engaged with all of them, especially when you're listening to your clients. And given that Equinix is vendor-agnostic, Again, it helps to provide the perfect on-ramp for use of those services.

Yes. Well, we're excited to be the part...

I noticed you've pulled out all the heavy weights on...

Don't be intimidated -- you can say anything you would like. So we talked about operations a little bit earlier, and operations is critical to your success obviously, small importance there uptime. Could you really just talk about, I guess, the level of reliability and how that is important to you and how we have demonstrated and ensured kind of smooth operations frankly of NASDAQ's mission-critical systems and services.

Absolutely. I have a phrase that I like to use when I talk about, again, a lot of stuff I do on the securities side is, it doesn't meet the pillow test, meaning when I put my head on the pillow, do I go to sleep or am I up at night worrying about things. And when you ask me about the service levels that we get from Equinix, I always think of a service level agreement as sort of the minimum that someone should be performing. And I will say, again, very transparently that -- when I think of Equinix, you have always exceeded those service levels. So that helps when the organization has so much else going on like we all have going on in our own lives, you have so much stuff going on. I can't worry about that, Equinix has got it. I can't worry about that. Zscaler's got it, et cetera. By the way, Zscaler, we're also a customer and happy customer of Zscaler. Misha had nothing to do with that comment.

Well, we strive to ensure that you have a good night's rest every night. So -- and that -- we'll make sure we get that out to our entire operations team. That's our goal to make sure that you get a good night sleep every night. So how is Equinix maybe uniquely positioned? Because you've talked a little bit about the criticality and you've talked about what we've been doing together. But like how do you see us? What differentiates us really?

Yes. So I think, again, Equinix is the leading data center provider and more globally. And I think that the affirmation of that is not in any marketing collateral that you all share. I think the proof of that is, again, in the client base. And I'm talking purely from the financial industry, but I know that in other industries, there's a significant base of clients that leverage Equinix globally. So I think that speaks for itself. And the prominence of that, I think and the evolution that Equinix has gone on, as you've added more and more to the base of services, sort of tells its own story. Without having anyone here as much as I -- I'm sure you appreciate the corporate comm team to share that story. It sort of tells its story on its own.

Yes. Well, it's helpful when you've got a story that can tell itself. And it's even more helpful when you have customers who can tell our story. So Again, I'm so thankful that you're here, especially in light of everything that you've got going on at this point in time. Let's bring up actually our next guest. So in case you missed the abundant, and mean abundant media coverage, NVIDIA is a pioneer in accelerated computing and really the backbone of the AI industry right now. And so I'd like to welcome Matt Hall up to the stage from NVIDIA. Thank you. All right. I'm so excited to have you here.

Absolutely. It's a pleasure to be here.

Yes. Well, it's wonderful to have you I know that we've been working with NVIDIA for more than 4 years now, and we've even got a joint offering in the market already. And you've been working with us prior to your time. There's a theme here that we're seeing you at NVIDIA. So I see this theme of partnership -- and Charles earlier mentioned that AI represents a $21 billion TAM for Equinix. So just before we even dive into anything about Equinix, like tell us what's happening. AI has been around for a while. We've got the source here himself of seeing this transition and experiencing it live. Why is it suddenly such a big deal?

Yes. It's been in the press a lot recently. As you guys know, AI has been around since the '50s. If you remember, 1960 Space Odyssey 2001 how, if you think back to Big Blue beating Gary Kasparov at chess, if you think to AlphaGo, Google's AlphaGo beating the Go. The reality is that the premise of AI has existed for a long time. But at its core, AI is about taking lots of data and processing it to outcomes. To do that, you need a lot of data and need a lot of processing power. So what's happened over the past 5, 10 years is we have achieved critical massive data, every time you open your refrigerator, you're generating data. Every time you get in your car, you're generating data. So we have more data than we've ever had with the technology that NVIDIA has brought to bear, we now have processing power that was unheard of, unthought of back in the '50s and '60s. So you combine those 2 things with data science, with math and AI is now becoming real. What happened in the past few months with the whole GPT thing, was really a realization of what we knew at NVIDIA, what Equinix knew with our partnership has been happening for many, many years. AI has been around in reality for the past 5 to 10 years. Companies are making massive gains with fraud detection, with customer service, with routing, supply chain. AI is real. And I think the ChatGPT thing really made people wake up and said, "Oh my god, I got to take a look at this AI thing, I got to get started." So it's real. It's here. It's brought to bear because we have data, because we have very, very fast, high-powered computing and we have the ability to coalesce it into business outcomes. So we're really, really excited about where we've come with AI, and we're excited about the journey ahead. We're just at the tip of the iceberg.

Yes. I think that it also just seems like it's brought it to the everyday person ChatGPT. I think that it's now really embedded across the whole globe. I mean my kids use it, everyone is using it, right? And so -- it just puts it front and center and makes it so relevant. But to your point, I think we've really been seeing this trend for already quite some time. And so excited to have you here talking a little bit about this. So AI acceleration, it's obviously a huge driver of compute, and this is a big impact for the data center space. How do you think AI is going to be supported? What does that look like? What are you seeing? And where do you think it will be done?

Absolutely. AI is going to be done everywhere. AI is going to be public cloud to the device edge. It's going to be the robot that's performing surgery. It's going to be the car that's carrying our children and their self-driving capabilities. AI is going to be done in the public cloud, and it's going to be done everywhere in between which is why our relationship with Equinix could not be more important. Equinix has the breadth, they have the scope and the interconnectivity. When we think about AI in the future, going back to the example of your kids getting into a self-driving car, milliseconds matter. You want the transfer time to be very, very fast. You want the interconnections to be robust. And that's why we partnered with Equinix to make sure that we can bring AI to bear everywhere. With that said, there will be density of AI. Charles said it earlier, he talked about interconnection being this gravity. We talk about data gravity. As I mentioned, data is being created. We have more data being created every year than we've had in the history of human kind. That data is going to have to live somewhere. Data center seems like a pretty good place for it to live. It's going to have to be computed somewhere. It seems like the compute and the data center is a pretty good place for that to happen. Regardless of the compute and the storage and all the equipment is owned by a cloud provider and an Equinix data center, whether it's owned by an enterprise, whether it's managed by a third party, it's going to live in a data center. So we're really at the explosion of AI in the enterprise data centers, and it's a huge opportunity for both of us.

Yes. Well, it's a little scary to think about my children getting to self-driving cars. Although we've seen, I think, Paul Denner, one of our sales leaders actually did a nice video of himself in a self-driving car, very nerve-racking to watch. But yes, it's coming and it's real. And what do you think about how Equinix specifically is positioned in this market to help capture this opportunity?

It's a great question. So what we hear from customers, our mission at NVIDIA is to democratize artificial intelligence. We want every single enterprise out there to have their own AI capabilities. We don't want to just be a few large folks that control the entire AI market. We want every enterprise to easily adopt AI. So with that said, you guys have -- what was the number, 41% of the Global 2000. You already have their data, you have them on your interconnection. You guys have interconnections like no other. You have more availability zones undersea. I mean it's absolutely stunning. The breadth, scope that you have, plus the density of data, you guys are better positioned than any other provider out there to capitalize on the opportunity. As Lou mentioned, it's about trust, it's about the relationship. I'll tell you. Our relationship with Equinix is multifaceted. We're a customer. You guys are a customer of ours. I think somebody earlier, maybe, Scott, talked about the fact that you have A100s running in your infrastructure. We're working with you guys on how to look at to deploy AI in your data centers? How do you take the data that's coming in data centers heating, cooling, the video security. But at its core, we're partners. And if we can work together to democratize artificial intelligence, take it to that 41% of the global enterprise market and create really easy ways to deploy artificial intelligence. It's going to be a huge win for us. And it's going to be a massive win for all the enterprise out there.

Yes. I mean I really like the idea of democratizing the data and the access to AI and those capabilities coming from Equinix, where we're focused on being a neutral place where the world can interconnect like this is -- I feel like such a good fit here. And anything else about just how we're positioned differently? Do you see something that we do that's very specifically unique?

Yes. I think it stems back to the willingness to partner, right, and look at new things. How do we deploy our technology in metal? How do we do other things together. So I think you'll see a lot between the 2 companies in the next couple of years as we look to innovate. And it's that willingness and the creativity that attracts us. As Lou said, it was a no-brainer to be here today. As Micha said, he got a great plug-in for you guys. I got to get a plug in for an NVIDIA as well. At NVIDIA, we've been working very hard to bring together all of the infrastructure and the technology to do AI. If you look back 5, 6 years, you mentioned AI people didn't know where to begin. Now we have entire AI infrastructure with the software stack. What we're missing is where do you put it? How do you run it? It's going to be a hybrid multi-cloud world. Somebody mentioned earlier that Equinix is the heart, right? So what we bring to bear, what Equinix brings to bear is perfectly complementary. And again, I think you'll see some big things from us in the next few years.

Yes. So we're excited to continue to be creative and innovate with you. I know that it's some of our favorite things to do. Again, it goes back to how are we going to find joint ways to serve our customers and make sure that we're serving them in a way that really lifts us all up. I think all tides will rise. And so changing subjects a little. I have a question around -- how do we actually -- how do you think about sustainability with AI? I mean that's -- obviously, this is massive amounts of data. We are the stat you've said about we're creating more data every year than we have and like all of history is hard to comprehend. And it's certainly not going to be slowing down. So how do you think about really creating sustainable solutions?

Yes. So I think there's 2 parts to that question. Number 1 is the compute that we're offering. If you look at what NVIDIA has been able to do, we picked up where Moore's Law left off. [indiscernible] x86 has really leveled off. You can't get the performance. So now with our new technology, we need to deploy one GPU-enabled server, you can replace literally thousands of CPU servers. That means your compute is more dense, which puts stronger requirements on what's needed from the data center, which is another reason we love partnering with Equinix, but it also means you're removing a ton of waste and power, of wasted infrastructure that you didn't need. So the GPU at its core is really helping us drive the reduction of power usage, the reduction of waste. And then on top of the partnership with Equinix, we know you guys are driving for a very, very green footprint. You guys are doing some extremely innovative things. I believe wholeheartedly with Charles' comments earlier that every enterprise out there will take into account the sustainability in greenness as part of their selection of vendors and partners in the future. We're very cognizant of that. We want to be a great partner to the earth and to our customers as well. So that's a big part of the partnership with Equinix.

Yes. Well, thank you. Thank you for sharing that. It's -- again, it's hard to comprehend how we're going to continue on this path, and we're thankful to have companies like NVIDIA out there that are really thinking about how we create a sustainable future, but continue to innovate and grow and bring technology to people around the world. And so I guess, one of the final questions for you all. We talk a lot about ecosystems. You've heard that throughout the day today. And obviously, they're incredibly important to us. But we would love to hear a little bit about kind of each of your specific areas and what the ecosystems mean to you? And so maybe we could start with Lou, if you want to just share a little bit about ecosystems and your perspective on the importance.

Thank you. And you had me on a little by the way, on the AI discussion. That was really cool, and I -- I don't think it's as easy as you -- from a security standpoint, there's a lot of security things that need to be factored in, but we are embracing it as well. So thank you for that. On the broader ecosystem question and you're getting a lot of out of us today.

I love this, I love this.

So again, we are -- Nasdaq is at the center and as is Equinix as Matt called out, of what we consider the financial ecosystem. And the question is, what does that evolve to? How do we leverage AI going forward to do more? How do we leverage likes of Zscaler to protect us. And I talked about the trusted fabric, right? That's our vision. So we're going to do everything that we can with our partners and the right partners -- to enable that. We want to ensure that whether it's ESG related, or any financial crime related, because it's a very important product set that we offer as well and fits when we talk about the trusted fabric. We need all those components, cloud. We need the global reach that Equinix offers us. So you put all that together, and I think that is what we consider part of the main ingredients of our ecosystem and why we know, again, we know it will be successful.

Yes. I mean that's -- I think it's interesting just how you're going beyond just the financial ecosystem, right? You're pointing out that you're partners in AI and partners even on the cyber side. So maybe moving over to Micha, I hear a little bit about the security ecosystem and how you see that growing and evolving and how you think that Equinix maybe helps in this ecosystem play?

Yes. As a service provider, the first job is to deliver the service, right? It's really period the end. It has to work. As a security cloud, we replace -- I like the Matt's comment on replacing thousands of servers. We also replace thousands and thousands of appliances and the need to run them for our customers, and put them into our cloud, right, which a lot of it is in Equinix. Now what comes with that is the ecosystem and becoming one with our customers' environment. ESG is top of mind. But with Equinix, for example, we -- my team interacts with them on a fairly regular basis to collect all the data around ESG and then we packaged that up and give it to our customers and say, "Hey, look, you're 100% green here" right? Because we see all the transactions, because we see the entire ecosystem we can basically tell them how much of their transactions are going processed in the data center that basically is relying on green energy. So there's a lot to ecosystems actually, I don't know if you guys noticed, but I have ecosystem in my title, so compliance. And a lot of these frameworks also, Equinix is a big partner in that because as a cloud provider, everything underneath is also in question, right? Clouds are still physical. It's still somebody else's computer. And so if you can trust in the underlying environment in the protocols and the sort of standard operating procedures globally, then customers can leverage it better. So if you remove the speed bumps and the friction of the adoption, and so that's what ecosystems ultimately means to Zscaler and to me.

I'll be sure to pass the memo on that clouds actually are physical somewhere. To my parents, next time I talk to them, who still are trying to understand the cloud, but yes. Thank you for sharing that. I think that the sustainability lens of that is interesting. And the fact that the data continues to grow, that we've got to be passing on all of us say passing on to our own customers and making sure that they are aware of everything that we're doing and the improvements we're making is a really good point. So thank you so much for sharing that. Matt, what about anything else on your side on ecosystems? I know you've already spoken a little bit about it, but any other last thoughts here?

I think just to add on, I mentioned democratizing AI. It's really tough to democratize something if you don't have partners. Doing it all by yourself means you're not democratizing it. So we pride ourselves on having a very robust partner ecosystem, everything from open source software to developer, ecosystems to partnerships with storage providers to cable providers, to compute providers, to cloud providers, to data center providers to energy providers. It is the only way that you build a market. It's the only way that you open things up and democratize them. So we're very, very keen on our partner communities. We have lots of them. As evidenced by me sitting here today, this is extremely important to us. The ecosystem couldn't be more important. And the fact that Equinix is really looking at this in an ecosystem lens looking at customers as partners as well, is extremely important to us. So very, very important.

Yes. Well, clearly, all 3 of you are leaders in your respective companies and also in your own industries. So we honestly can't say thank you enough for taking the time to be here with us today. Together, we're going to continue to innovate and accelerate how we move through digital transformation. And we're going to be working on things we can't even imagine in years from now. I was laughing earlier. I mean, 6 months from now, I bet we can't even believe some of the things that will be happening just at the pace that we're seeing AI transform all of our businesses. And I think you've heard the word service provider, which ties very closely to what Charles mentioned earlier that companies that are really transitioning to be service providers, it's becoming more and more prevalent. And I can see that all 3 of you on the stage, like we've all got the service provider mentality and how we're going to be sure that we're supporting our customers and evolving to really be that true service provider. So, thank you for that strong partnership. Fortunately, we will have some time this afternoon in our next break. So not right after this, but in just a little bit. And a couple of the gentleman here on the stage will be around. So if you do want to ask them additional questions, they have been gracious enough to be willing to talk to you. But yes, so I just can't thank you enough. I appreciate your business and appreciate the fact that you're willing to be here on the stage and work as our true partners. So thank you. [Presentation] Hello. I am Antonio Neri, President and CEO of Hewlett Packard Enterprise. HP and Equinix are long-standing strategic partners, providing customers with trusted digital infrastructure and IT services. We share the belief that most customers will operate in a hybrid world to enhance savings, simplicity, security and sustainability. A hybrid multi-cloud approach enable organizations to minimize economic and environmental costs, navigate changes in security and risk strategies and adapt to the complexity of managing these environments. At HP discovered early this week, we announced the availability of HP GreenLake pre provision at Platform Equinix, extending a cloud-like experience to anywhere in the world from edge to cloud. By integrating our HP GreenLake cloud with Equinix software-defined network and infrastructure automation, customers will have the DevOps benefit they need, including dedicated control over security and data privacy. And it is all available in a fully managed scalable private cloud at Equinix centers around the world. with a single paper use HP GreenLake experience, customers can now focus on creating business value instead of running a data center. HP and Equinix are well positioned to provide a trust and sustainable path to future proof their businesses with an integrated solution to begin their business transformation today.

Please welcome, Chief Sales Officer Mike Campbell.

Well, how are we doing everybody? Okay. Yes. I feel like I just walked into one of Keith Taylor's finance meetings, just a lot of excitement, a lot of energy. I'd tell you. So it's kind of interesting because you actually learn a little bit about the management team. What I learned about from Charles and Keith is that they have their favorites. So earlier today, Charles gets to kick off. He's the CEO. He can do whatever he wants. Keith gets the wrap up. But then Nicole, Scott and John say, "Hey, we want to go early in the morning, why everybody's got energy. [indiscernible] says "Hey, I want to go right after lunch," And then they're like, there's only really 1 spot that nobody wants -- and that's the -- right before the break. So let's give it to soup. Sorry, that's my last name a little play on thing. So why not give it to him because he should be out selling anyway. So anyway, so I've got this bad spot. But I'm going to share with you a little bit behind the scenes. So you actually heard from some of our fantastic customers, which was great. So thank you very much, Matt, Lou, Micha for being here and sharing your story. Because I'm lucky as a sales officer, my job is to basically go out and meet with customers and prospects, learn where they are, where they're going, and how we might be able to help them get there. So it's the best job in the world. You get to go out and meet with exciting people that are doing exciting and innovative things. And so they've actually already told you kind of a little bit about how we partner, why we partner with them and what we do. So instead of repeating some of that, what I thought I'd give you is a little bit of the behind the scenes look at our go-to-market engine. And some of the reasons that we've been fortunate to have success over the last years has not all come by accident. I do believe it comes a little bit with luck, but the harder you work, the luckier you are, right? And so when I think about sharing that with you, it's to try to have you be able to try to understand there's actually science to what we do and how we do it. We're also now continuing to innovate and think about how do we even go to market different than what we used to do before. This is what it's going to take to really fully recognize and take advantage of the opportunity that's in front of us. So if you start to look at Charles, I'll bring you back to where Charles started the day, there's a big opportunity out there. Okay. Great. We know that. Actually, I look at that number sometimes and say, it actually looks kind of too big. It's a little bit too broad. And so what can we do to actually focus my sales team so that they go after the right companies, not just all of the companies, the ones that have the best chance to buy. The ones that we actually have the best chance to partner with and build solutions together so that they could be competitively at an advantage in their space. So this 650,000 is made up of established companies that have been around for hundreds of years, that are ready and willing to think about what they do today and where they're going to grow to in the future. And it's got a whole bunch of companies in there that just know, I got to figure out what my future is. And I need somebody who can help me get there. And how are we going to do that? So we actually built a tool, a couple of years ago that's based on artificial intelligence and machine learning. So I don't know what the big hype is, Matt, I'm with you. We've been doing this for like 6 years. We built the program a long time ago. But what it does is it actually takes 100,000 attributes that we then apply to the 650,000 companies. And what we've looked at, is all publicly available information, so it's not proprietary. And so it's the search tools that go out and find all the different things and areas of software and hardware that is publicly available that these companies have done. We've then matched those companies with other companies and say, well, if this is what this company has done and this is how much they bought, these are the kinds of things that they are able to start to do. And so now what happens is, our sales team knows who to go talk to. So they do that. And this star that we've called stands for segmentation, targeting, activation and then reporting out on it. So the segmentation and the targeting piece is saying, "Who are you going to go after?" and then now it's like how do we activate them. So what we do is, we actually take all that information that we've gotten and we put together what we call the digital strategy briefing, and we go out and meet with those customers. And we say, here's all the stuff that we've seen people in your industry doing. Here's the technologies that they're buying, here's how they're implementing it. Here's some of the use cases that they're doing. Not tied to a certain company but what the trends are, what's the market. So now those customers are saying to Equinix, "I'll actually take the meeting with you, because you're going to bring me something that I can learn from and that I can get value from." So they're targeting the right ones. Then when they're there, they're activating them by sharing the right information. It allows us to then figure out how do we become a part of your digital strategy moving forward. And you can see this year alone, we've signed about 40% more of Star customers and prospects. And when we've signed them, here's what we know. They do more than 2x the number of interconnections that everyone else does. And they deploy in more regions. So they are important to us. They are important to each other, and they continue to build on what the platform is. So that is we use these tools to actually help our sales team be more productive. So let's just talk to you a little bit about this go-to-market engine that we're all so proud of. You can see it's about 3,000 people strong. And of those 3,000, 2,000 people are meeting or interacting with customers every single day. So that means 2,000 people are out learning more every day what customers need, what they want and how we might be able to help them. It's exciting. And I'm really proud to represent this group today to tell you this go-to-market engine is unmatched in the industry. Sales is only just a little cog in that wheel. As you can see, a bunch of my partners, you ever noticed that like, I should just look at the slide down here because in my head, I'm thinking my wife says to me, "Hey, by the way, don't turn around and look at the slide, because they're going to tell that you're balding." And so as they get ready to look, I'm thinking to myself, "Hey, here's my wife telling me, don't turn around because they're going tell you baldy. Okay. So I'm going to look down at this slide every once in a while. But as you look at that group, what you'll see, we meet every week together. The team is tight. All of the leaders, everybody who heads up the care group, our marketing team, the sales team obviously, our business development, we are all working together to try to solve problems for customers. And when we do that, it comes up every day. Well, what's happened? What have you heard? What's new? What can we do? That's why we are acting as one team united in our go-to-market approach. The sellers are really important to me, obviously. And so when I look about that, one of the things that I'm really, really excited about is just in the last 7 months, we have hired over 100 new sellers that we've brought on to the family. Now that puts us a little bit over 700 quota-bearing heads out in the field. They partner with a lot of the folks up here to actually spend time with customers. We've got over 400 technical sellers. Those people -- salespeople are averaging about 11 years of industry experience. Our technical sellers have over 15 years of experience. So again, when we go out and we're talking to customers and prospects, we're able to bring them insights and help them to be able to learn what other things are happening that can put them at a competitive advantage in their space. They're also joining us with real-world knowledge. A lot of these people that have joined recently have come from Amazon, Cisco, AT&T, VMware, named the list of companies that they've come from. So they've all sold as a service before. They've sold networking. They understand cloud. They add that to the group of people that have already been here. You can see up here that our average tenure of somebody who's been with Equinix in the sales team is 5.5 years. Gartner says that that's 2x, 2 times, what the industry average is. So when people come here, they stay here. They want to be here. And as I'm doing a bunch of interviews now for a lot of those other sellers as they still continue to come, they are telling me, I'd say, why do you want to come? You're Atlas behemoth of a cloud company now or whatever you happen to be at? Why would you come here? And what is true in every single case is, Equinix is special. You heard it even and saw it in the videos earlier, people understand that it's the perfect trifecta. We have great history, so you can look back and you saw Charles' slide that talks about 20-plus years of revenue growth. You've got the opportunity that we mentioned. So there's lots of companies out there that have good history. There's lots of companies that have great opportunity. But then you also have people that you really like that you enjoy working with, whether you have fun with and that are really good at their jobs. So Equinix is where all 3 of those 3 can meet. And I will tell you that this team knows and understands that they're at a truly differentiated and unique place, but we never take it for granted. We actually spend every single day obsessed trying to figure out how we can do better and how we can solve more customers' problems. But the buyers and sellers out there are actually evolving. So we need to evolve with them. People want to buy differently than what they've bought before. So many of my sales team is really focused on those large mid-market and above type companies that want to have somebody they can meet with and they can talk to you about everything that they're doing. A lot of other people don't actually want to talk to sales. I've heard that before. Some of you are actually thinking I actually wouldn't want to talk to Mike either at the break. I understand that. But Scott talked a little earlier about what we call PLG motion. So product-led growth. What we are hoping by that is they are marketing. Our marketing team is fantastic. And what they've done is created a machine that goes after people that we don't normally talk to in ways that they want to be talked to in the tools that they have access to. You can see up on the screen up there, these are tools I have no idea what they are. I don't need to because I'm not using them. The people who are we are reaching because that's how they want to be talked to. So we target those different personas.

I understand that. But Scott talked a little earlier about what we call PLG motion, so product-led growth. What we are hoping by that is they are marketing. Our marketing team is fantastic. And what they've done is created a machine that goes after people that we don't normally talk to in ways that they want to be talked to in the tools that they have access to. You can see up on the screen up there, these are tools I have no idea what they are. I don't need to because I'm not using them. The people who are we are reaching because that's how they want to be talked to. So we target those different personas. Another thing I do love about it is brand new group of people that we could be talking to every day. Teaches us more and more about the company. We now can spread out. We're not just in our traditional areas of talking to the C-suite or talking to the infrastructure or the IT buyers. Now we're talking to developers, we're talking to business unit leaders, all kinds of different things. So these buyers want to buy in different ways, and they want to actually do things differently. Back at the beginning of the pandemic, we had a situation where a very large food distributor customer of ours, called and said, "I'm home, this is my new office. I'm in the U.S. I have to deploy and extend my infrastructure into London and Frankfurt. I can't travel there. How am I going to do it?" They used our fabric and our interconnection capabilities to send compute, connections to internet, et cetera. They did it all sitting at home in a T-shirt. It was probably a University of Dayton T-shirt. I don't know what T-shirt that she had on, but it doesn't matter because the person was in their T-shirt, and they got done what they needed to get done. We've now seen that same quest for being able to do that, that happened in the pandemic to now everybody is saying that's the way to -- they just want to order that way. Just in 2023, we've seen 25% increase in people ordering off the portal. It's now become like 20% of our bookings every quarter come from people that self-serve. We don't even need to talk to them. So the buyers want to buy differently. And the sellers want to sell differently. So we have been working with a lot of these channel partners out in the space before the hardware providers, people like that -- HPE, you heard the great announcement, right, before I came on from Antonio, their CEO, that announced basically being able to do it as a service, buying colocation as a bundled service. This is the first time that something like that's happened. We have a few other partnerships that haven't been announced yet. Some have with VMware, but we have a few others up our sleeve that you'll hear about very soon with a lot of these other companies that want to do the exact same thing. And that is the sellers are meeting with my sellers in the field, and they're saying, "how can I still figure out a way to sell hardware, but I need to do it as a service." So they want some of the applications to be able to go to the public cloud, which is great. Some of them, they need to be holding in the on-premise. And so in that on-premise, let's put it right next to the same place where you're going to the cloud. Who can you do that with? Equinix. So we've already been kind of tight with the clouds. We saw them be able to bring more cloud adoption because of what Equinix and them could partner to do. Now the service providers are saying the same thing. They want our platform capabilities to be their service capabilities moving forward. But to do it, we have to change. We can't just do it the way we used to do, so we've got to be more automated. We've got to do things more cloud-like. And I know most of you, if -- the ones that aren't dosing off or sitting there, looking at your phone, getting ready to write up your research, hoping that Keith starts talking and Mike stops talking. But I have to admit, I looked, when it sounded like I was going to do a demo, a couple of you looked up hoping with a little chuckle in the back of your mind, like this is going to be kind of funny. The sales guy is up there, getting ready to do a demo, we'll see whether it works. So this is actually an example of how somebody can go and order a new server. So you basically go in and say, where do you want to be based, Amsterdam, which server do I want to pick? What operating system? Then, of course, our team used a sloth, which is known for being slow to say how fast it was. Now that server is able to be connected in that amount of seconds that we just talked. You have now deployed a server on Equinix. This is the way that a lot of our customers want to be able to buy, and how they can take advantage of our servers moving forward. But as you start to think about it, there are this huge opportunity. There's all kinds of new automation to do it. Can we attack it? Yes, but we don't have to do it alone. We've never had to do it alone. We have channel partners to go to market with. When we first started our channel program years and years ago, we partnered up with referral and agents. And what those means -- those are basically think of them as consultants. You can see some of the company names on there. These are trusted advisers to many companies out there, and they say, "You know what, who should we go with? Who's the best? Why are they the best?" Some of them actually have them put together their RFPs and then we respond to. So we've got that market. We've had it. It's working, going to keep working. Then we started to work with some of our network service providers and other service providers who said, "We want to bundle this together. Our solutions, actually, people are buying a little bit less of, but I've still got their commit together how can I add services to my portfolio? I want to add Equinix services." So we've partnered with a lot of these companies and many more to give that perspective of now it's a bundled solution. Now you can buy it from whoever you are, Verizon, Zenlayer, et cetera, but Equinix is just a part of that. Super excited about what that brings to us. And then now you also have the cloud and tech alliances. This is a massive opportunity for us and a very critical part of our channel program. Let me just start by saying one statement. I get asked this all the time. Cloud is not a competitor to us. When we are on a sales call and someone says, we want to go to the cloud, we smile because we can help them get there. It's not competition for us, it's actually opportunity. So we partner with all of the large clouds and say -- they actually send leads to us to say, this is somebody that we don't have a direct connection with the easiest way for them to connect with us is through Equinix. And then what I mentioned a little earlier about some of the hardware providers and OEM providers, that's a massive opportunity for us as we continue to move forward. From the tech-alliances perspective, they are wanting to do business with us. Lots of companies now are starting to get out of their own data centers. They can't move it all to the cloud but they need to move it somewhere close to the cloud. It's gone away from that time when you used to say, "I need to hold on to all of my data myself." It's actually -- I don't need to be located in my own buildings anymore. I actually need to be located where the data is. And that's where they say, "I got to go do it with Equinix because they are next to all the clouds and all the service providers." So this has now grown to be about 35% of our bookings come from the relationships that we have with these partners. And so far this year, 60% of the new logos that we brought on to the platform have come about because of these relationships. Really excited about that. And it's also not just the example of they bring good customers. They actually bring the right kinds of customers to us that actually make us proud. One example is precision robotics. It's actually a partnership with NVIDIA. They are out there using our network and our platform to be able to take pictures of all the different surgeries that are happening so that they can build robots in the future to be able to mimic that. So we are using -- working with NVIDIA to actually make the world a better place. And I'm super excited about what that means and how we can help the partnership to help us get there. And those partners actually help the platform. Because what happens is, all the suppliers are here. All the providers are here. All the enterprises are here, and they're all talking to each other. And they say to each other, "you've got to go do it in Equinix. And once you get to Equinix, we will be easier to work with." So they are sending people to our platform. If you think about it, and this is publicly available, we've looked at a lot of people that consider themselves competition that the closest one to us has hundreds of thousands less interconnections than what we have. So there is no other place where you can connect to more people than Equinix. And all of these companies are creating value together. That's why they want to be a part of the platform. So lots of companies out there can hire more salespeople. Lots of companies out there can add to their channel program. They can even try to innovate and build a faster sloth. But they can't create an ecosystem of that magnitude, and they certainly can't do all 4 of them at the same time. We are the only one that has it all. So if I take you back to the very beginning, and we start to think about there's lots of things out there that we could try to learn about and try to sell. We've got the right experienced sales team to go do it with the right partners, all part of the same one platform working well together, nobody can match that go-to-market engine. And I have no idea, no idea what will happen in our world in the future. The only thing I know with 100% certainty is that Equinix has built a go-to-market engine that has sustained over time and succeeded over time. So whatever the world throws at us, we're going to be able to handle it. So thank you for listening on that part and our go-to-market piece. This is the time you've been waiting for, which is a break. So we're going to be back here at 2. For those on the phone and on Live chat, we'll be back at 2:35 Eastern time. So please take a break, and we'll come back with our finale of Keith and our executive Q&A at the end. Thank you very much. [Break]

Welcome back, Chief Financial Officer, Keith Taylor.

Wasn't that great so far. We've had 4 segments, and you get a good sense of why somebody like me that's been with the company for 25 years -- for almost 25 years is so enthusiastic, not about what we've done in the past, but where we're going in the future. And it really was impressive. And also, you can tell by my colleagues, just how much fun it is to actually be at this company. And I do mean that. It is a lot of fun. Now Mike, what was that thing that your wife was saying? I know quite a show [Indiscernible]. Okay. Okay. Anyway, I am delighted to be here. And I think it's great. As I've said before, it was 5 years since we stood up in front of you and 2 years since our last Analyst Day. And I have a lot to talk about, a lot to tell you. So the first part of it really is when you look at the track record of delivering, a lot of that is really about we're fundamentally different. We're fundamentally strong. When I think about expanding the market opportunity is because we have a differentiated market position, managing through the complex and dynamic environment that we live in, it's because we're investing in digital infrastructure, and we have teams that are in place to deal with the complexities where there's interest rates, currencies, power, supply chain, we have durable value -- sorry, we have a strong balance sheet that creates durable value. And that balance sheet is not only strong today, and it's been strong for an extended period of time, we want to position ourselves for tomorrow as well. When I talk about the fundamentals are strong. They've been strong for 25 years. And there is no reason based on what you heard from our customers why they can't be strong for another 25 years plus. So first thing, I want to tell you about bookings. Part of the reason I'm so optimistic about our bookings. Is it the demand environments there? You hear me say it on a regular basis when we meet on our one-on-ones or what have you, all things digital belong inside Equinix. I believe that. But I also believe, given the complexities that we have around the globe and all the challenges that we have in running this business that we have I would suggest the supply environment is going to shift as well. Not everybody can do what we can do. And particularly customers are willing to pay for those customers -- those -- sorry, customers are willing to pay for an environment like ours, high-quality, multi-tenant data center because we have something different to offer. Now as you can see by the slide here, between 2018 and 2023, you see that our book -- our net bookings -- pardon me, our bookings are up roughly 80%. They're up roughly 80%. It tells you just the momentum in the business. Now part of that is coming from channel for sure. And Mike highlighted that we have a great channel business. But it's great to see that the customers are seeing something different than what Equinix has to offer. Now the price points, you hear me talk about this on a regular basis on the earnings call. The price points, when we think about net positive pricing actions, that's really about when we think about price increases relative to price decreases for as long as I can remember, we've been talking about positives. Doesn't mean prices don't go down. It just means as we negotiate in this world that we live in, the price points end up being a net positive. And that should add roughly about 6% to our bookings this year. That does not include the PPIs. And so when you look at that, you go, wow, between that and just the growth, tens and hundreds of millions of dollars of value will get created over some period of time, certainly over the next 5 years. What's also interesting is churn. So bookings has increased roughly 80%. Churn has gone down as a percent of our PAG, our price-adjusted growth by about 10% to the lower end of our guided range. So it gives you a sense how phenomenal the business has performed relative to our initial expectations. So we're at the lower end of the range. What we like to say at Equinix, nothing delivers revenues faster than simply eliminating churn. And that is true. The fundamentals are also strong because our revenues are durable and they're diverse. When you look at this chart, whether you think about regions, whether you think about industries, you think about currencies, our revenues are diverse. And they're durable. 95% of our revenues recur, and they're predictable. On the far side of the chart, you look at that currency mix. 60% of our revenues come from non-U.S. sources -- non-U.S. dollar sources. One of the things I've said recently, and we all feel this a little bit, the markets, the public markets, the macro conditions have been very difficult. And those who believe that the U.S. dollars -- those -- many of those -- many people believe that the U.S. dollar is going to continue to weaken or weaken 5% to 15%. And again, some of you have heard this directly from me before. But if you have 60% of your revenues outside the U.S. And the U.S. dollar weakens 5%, that adds $250 million of revenue to our top line when that takes effect. Of course, if it's 15%, that's $750 million. And let me put it into EBITDA terms, it's $125 million to, $375 million of EBITDA as the U.S. dollar weakens. That's $1.35 to $4 per AFFO share that would increment. So it gives you a sense that we have a diverse revenue base, but we also have a diverse set of operating environments that we live in. Now what's less predictable, of course, is our nonrecurring revenue, largely because of xScale fees and custom installation work. What's more predictable, of course, is our smart hands and our deferred installation. But the purpose of this chart is really to just let you know that nonrecurring revenue will be roughly 5% to 6% of our revenues on a go-forward basis. But if you look at any given year, and you can tell year-over-year, it has some volatility to it. We'll do our best to make sure that you're aware of what happens over the coming quarters. Now as just the fundamentals are strong. And part of the way you see that as you look at the core operating metrics, and I have 4 right in front of you here. The first one on the far left really talks about our top 10 customers. You can see, as Charles alluded to earlier on, our top contempt -- pardon me, I'm going too fast. Our top 10 customers are growing substantially with us. A lot of -- they're the hyperscalers, another -- significant companies. So they're growing. You can see the size of that bar chart. But as a percent of our total revenue, they're actually going down. It tells you -- by the way, we see that as goodness. So yes, those large customers continue to grow and scale with us. But that long tail of customers are growing faster than the largest customers that we have. And then you look at a number of customers that are in multi-regions, greater than 3/4 of our revenue comes from customers who operate in multi-regions. And as a result of that, then you look at our stabilized asset revenues and the MRR per cabinet. That has been going up, again, exclusive of power price increases. And that's exciting because that tells you the customers are -- they appreciate the diversity that we have of our asset base, the diversity of our platform, the depth of our customer base. And they're also willing to pay different price point for it. And we've been able to grow that over the years. Sorry, customers, but it doesn't -- it's not you guys, but I can assure you, it's not you guys. But it gives you a sense of the momentum. Those are strong operating metrics. There we go. Our interconnection is strong. Our business is strong. And as we continue to invest and grow the business, interconnection is only going to get stronger. It's more valuable. It's another point of differentiation for our business. You know that. You heard about it today. All the stories are true. And one of the things that we've seen as of late is our net cross-connect adds has been down a little bit, but we're looking at the gross aspect of it. The health of our interconnection franchise is very, very strong, very, very strong. And you heard Matt talk about earlier on from NVIDIA, just about all the opportunities with AI. I'll spend a little bit of time on that. But suffice it to say, when you think about how customers are going to need to access their data, I only see interconnection continue to be a stronger aspect of our business. It is a point of differentiation. And in this chart, you can see on a global basis, we're by far the #1 player. And certainly, in every single region, we're a #1 player. Again, interconnection is a point of differentiation, and we're #1 in the world. And how that represents itself, if you have strong interconnection. And as you go to new markets, and we can take them all together, you've already got a competitive advantage as you move to a new market and more networks come with you. And so when you have more metros and the networks are following you, the cloud on-ramp sit on top of that. And then, of course, the customers want to be there. Again, just talks about the importance of our global platform and the diversity that we have. And you've seen by some of the charts that put up -- that had been put up by Charles, we talked about where we are today, but we're very ambitious on where we want to go tomorrow. And so this chart is something we want to pay attention to on a go-forward basis. Now let me tell you a story about Ashburn. And thankfully, I was there when it first started. In fact, at the time, 100% of the employees flew out from California to DC1 as we opened that data center, probably about 40 employees in total. DC1 was a 21,000 square foot facility. As you can see here, roughly 400 cabinets. But since then, as you all know, we've built another 15 or 14 data centers. We now have 15 today, and we're delivering roughly 100 -- or greater than 100 megawatts of IT load. So an impressive increase. But what's really interesting about DC is everybody followed us. That's Equinix in the middle. We are at the epicenter of the largest data center market in the world. As you can see here, 32,000 cabinets, 38,000 cross-connects, 91% utilized. All that's around as they're trying to access our ecosystems and get to SaaS. To me, it tells you about how important Equinix is in the DC market. And we meet our capacity into that market. We're not trying to compete for that large wholesale business. We're very deliberate about what we do in Ashburn. And we have the price points and the profit consistent with our market position. So when I think a little bit about the retail side of the business, and by the way, when -- if you think of Ashburn, think of the other major markets that exist around the world where we're trying to replicate that same exact portfolio. It is impressive, and it excites us. And that's why you continue to see us invest behind our own momentum. But equally, we see a real opportunity in xScale. It was 5 years ago, we really talked about it in earnest. It was an idea. And Krup who is here with you -- with us today, he's had a very large impact on what we've accomplished here. But let me tell you about it. Part of it was making sure you believed, you understood because the difference between -- when I start talking about strength, our financial strength, part of the reason we have financial strength and we've had success in xScale as we went and we sought partners. GIC and PGIM have done a great job of partnering alongside us. What's impressive since we started, we've deployed about $3 billion of capacity over those years. As you can see, we've built out roughly 19 data centers in 13 markets. And by the end of this year, the joint ventures, which we are a part owner of and who also pay our fees, will do about $400 million of revenue. That's impressive in such a short period of time. Now $3 billion is nothing compared to the $10 billion or greater that we plan to spend. Nothing compared to $10 billion or greater. But what I like about it is, again, we're using other people's capital to create that strategic value, that advantage that others can't get. They're not enjoying the profit structure that we have as a business. It will generate roughly 2% of revenues attributed to Equinix. Today, it's predominantly nonrecurring fees as we move over time, that nonrecurring fee goes down and the recurring fee goes up. But on a $10 billion business, or thereabout. You can see it's roughly it will be $200 million of revenue. But what's really important is over time, we see xScale, it will contribute 3% to 5% of our AFFO. So think about if it's -- for roughly a $40 AFFO stock in a few years, 5% of that, it's $2 given current trading multiples, $50 value, and that value is not yet -- we've not yet delivered it to you. That is what we intend to deliver. And what's really important about xScale as well, it's not just catering to the hyperscalers. We have this great opportunity because this is part of what we offer to our customers, but we also offer a solution. On one end of the extreme, you have xScale, you've got the retail in the middle. And then on the far right, you have all the digital services. So I see xScale not only as a provider to the hyperscaler, I see them as also a potential seller to Equinix, a provider to Equinix. Again, it's using other people's capital and again, a part of ours, to invest in markets where we wanted to put our capital somewhere else, let's use xScale because we can create an economic advantage for ourselves. I'd take it one step further, why can't metal, which sells into our retail space, operate out of an xScale asset. So again, we're tremendously excited about this. And I leave you with -- it's another point of differentiation. So okay. We have a history of acquisitions, no surprise. You've seen this slide before. We believe that we've done well. We've done 30 acquisitions plus. One, we're very, very adept at integrating acquisitions now. We create value with it. We will continue to do very targeted acquisitions where appropriate, and we'll integrate them. But what's important is we create value when we do that. I'll share some slides with you on a go-forward basis. But at times, we might not do it at 100%, and that's one of the things Equinix has drawn very comfortable with. We don't necessarily have to own 100% xScale is a perfect example of that. We own 20%, and we get a fee structure. I can sort of guide you to a transaction that we recently did in Jakarta. It's one of the new markets. It is yet to be -- it's not yet built, so it's not a dot on our map, but when we built out Jakarta, we wanted to go find a partner. And our team in Asia found a great partner, somebody that not only can invest today in size. They give us the advantage of local market knowledge and they can invest more with us and they potentially could go to new markets. And so I'm excited that we own 75% of that. Our partner owns 25% of it. But it just it gives you a sense there's a lot of tools that we can pull that out of our share to create economic value for our business. And sometimes using partners can go a long way. So I'm excited about our M&A strategy and where we go. And so when we do M&A, one of the things I say we don't do it just to scale. We do it to create value. We added into the platform. It's an extension of what we do. And over time, and you'll see in the next few slides, I'll tell you why that matters. But when I just look at the activity over the last 5 years, I look at the markets we're in, the interconnection that we have, I look at the contribution of EBITDA. Just based on those acquisitions over the last 5 years, we would argue that we've created $3 billion of equity value. I'm not going back at the beginning of time. You know how successful some of those acquisitions have been. But just over that short period of time, we believe we've created $3 billion of equity value. And it's representative, again, in the market, in the interconnection and in the profit. So it wasn't long ago when I stood up on this stage 5 years ago and we had just concluded the Dallas Infomart acquisition, as you see here. We also had done Metronode. Both those transactions were very, very expensive at the time for you and for us. But we knew what we could do with that platform. And so today, I'm not going to spend time on Metronode, but it's a very successful transaction. I want to spend some energy on Infomart. It's the most iconic network-dense building in the United States. And yes, that was important to control. But it wasn't just the Infomart. What we really were -- we were seeking out was the capacity just adjacent to it. And so since that point in time, again, it was an $800 million acquisition. You see the Infomart there. We've now built is 37 megawatts of capacity, 11,000 cabinets, 18,000 cross-connects. We've put up a new tower. We're 93% utilized on that new tower. But fast forward, we're putting up a second tower. And over a very short period of time, we've taken an asset that was expensive on the surface. And our Dallas 11 asset, which is adjacent to it, has filled up 3x faster than we anticipated because we had less large footprint. We filled it up faster and we did it at a better price point. And relative to the business plan that we wrote at that time, we've augmented that business plan by $700 million. That's about creating value. We knew what we could do as a business. And I think we've got a very special situation. And Dallas has just -- it exemplifies that situation for us. Now in this segment, I just want to talk a little bit about some of the complexities of the world in which we live. We have a lot going on. And part of what we have to deal with when we have a lot, we have to bring in professional teams. And over the last few years, Ralph and I worked really hard at building out professional procurement and strategic sourcing team. It makes a difference. That team has strong relationships with vendors and partners. That give us access to supply chain and production slots. We're living in a world of inflationary pressures and limited supply chain. And we knew we had budgets deliver and delivery dates to hit. When you have a professional procurement team, that's what you get. We've also taken our balance sheet because we have strength, and we've been able to prebuy. Some of it went on balance sheet, but most of it sits in the form of a commitment. We have a commitment. And the linkage between procurement and our global design and construction team is unparalleled because they're buying on behalf of that team. And as you heard before, I think Jon mentioned, we have 50 projects underway, 37 markets, 25 countries. But what he didn't say is we have another 120 projects of all shapes and sizes that we need to procure against. Another 120 projects, it gives you a sense of the magnitude of this team and all they have to worry about. And then take it one step further, our sustainability program office, our sustainability initiatives. Critical is linked to -- pardon me, it's linked to construction, it's linked to our procurement team. When we become more sustainable, our customers become more sustainable. We're of the pack here. We're going to blaze that trail for our industry. We're also going to put ourselves in a very competitive position because we're making this investment, a very competitive position. And it's costing money. We're investing behind it. But -- and on the flip side of that is we think we're going to be one of those preferential partners whether it's NVIDIA or NASDAQ, Zscaler, whomever it may be because we are going to be more sustainable. It's a competitive advantage. We also have a -- we also have a power procurement team, high credibility who focuses on contracting and sourcing. And as you all know, power has been a very disruptive, we'll call it a cost line for us over the last couple of years. But given their efforts and the work that they've done, we think we've put ourselves in a better position for our customers. Nobody likes cost increases I get it. But relative to what you would pay one, if they did business with somebody else or 2, they did it themselves. We've put them in a much more favorable position because of our power sourcing team, very, very successful. But you do see the aberrations. And then when you look at this chart in the middle, power was relatively predictable as a percent of revenue. It was relatively predictable. And then 2022 hit, where we got caught off guard in Singapore, and to a lesser extent, France. And then in 2023, boy, did that change. A lot of markets around the world, but in particular, Europe, really struggled. And as a result, you saw power costs as a percent of revenue really spike up. Now as you know, we did a very good job of projecting our cash flow, hence the AFFO per share. That's paramount to us. And so when we look forward with that, we go, "well, I know the customers didn't like it, but we at least put them in a better position." But on a go-forward basis, when you think about regulated markets represent about 2/3 of our power consumption. That means roughly 2/3 of that line we're a price taker. Effectively, therefore, the customers are going to be a price taker. We have no choice. It's a regulated market. But where we can influence it, we're going to get ahead of it. We're running at the front of the pack here. We're going to blaze that trail for our industry. We're also going to put ourselves in a very competitive position because we're making this investment, a very competitive position, and it's costing money. We're investing behind it. But then on the flip side of that is, we think we're going to be one of those preferential partners, whether it's NVIDIA and NASDAQ, Zscaler, whomever it may be because we are going to be more sustainable. It's a competitive advantage. We also have a -- we also have a power procurement team, high credibility who focuses on contracting and sourcing. And as you all know, Power has been a very disruptive, we'll call it, a cost line for us over the last couple of years. But given their efforts and the work that they've done we think we'll put ourselves in a better position for our customers. Nobody likes cost increases. I get it. But relative to what you would pay one, if they did business with somebody else, or two, they did it themselves. We put them in a much more favorable position because of our prior sourcing team, very, very successful. But you do see the aberrations and then when you look at this chart in the middle, Power was relatively predictable as a percent of revenue. It was relatively predictable. And then 2022 hit. Where we got caught off guard in Singapore and to a lesser extent, France. And then in 2023, boy, did that change? A lot of markets around the world, but in particular, Europe, really struggled. And as a result, you saw Power cost as a percent of revenue really spike up. Now as you know, we did a very good job of protecting our cash flow, hence, the FFO per share. That's paramount to us. And so when we look forward with that, we go, well, I know the customers didn't like it, but we at least put them in a better position. But on a go-forward basis, when you think about regulated represent -- regulated markets represent about 2/3 of our power consumption. That means roughly 2/3 of that line, we're a price taker. Effectively, therefore, the customers are going to be a price taker. We have no choice. It's a regulated market. But where we can influence it, we're going to get ahead of it. we're going to buy or we're trying -- we're going to mitigate those cost increases and enter into commitments to offset that exposure to the customer. On the far left in that chart, you can see the stack bar. Each component of that utility cost, go look at your own utility bill and you look at all the different things that are on that utility bill. Well, we have the same issues as a company. But those 3 major components, you can see each one of them increased but none increase more than the commodity price, the cost of energy. And so our effort to become more efficient and invest in those efficiency initiatives as paramount for us as an operator, but also for our customers. We want to be the most cost advantage to deliver power in our marketplace. Then on the far right, you can see a percent by region of metered power as a percent of our overall consumption. It's roughly 10% on a global basis has metered 90% is circuit-based. So development capacity strategy. So you know that we've been very active over the many years. You saw in that acquisition and capital deployment slide. We spent billions of dollars. Again, a point of differentiation is dispersed all over the world. Today, 346,000 cabinets, 82% utilized. That's important. But remember, we're in 71, 72 markets going to 75, 76, 80 whatever, we have land for development. And we're going to take that, and we're going to invest it. That land for development. And what's important, as you see here, whether it's a retail build or whether it's an xScale build were procured land, we're willing to put a certain amount on our balance sheet for future development. And because we do that, it gives us an advantage, but we do that because we have the balance sheet. We have the liquidity. Order of magnitude, or upward limit is 5% of our balance sheet. So if it's a $30 billion balance sheet, we would be okay up to $1.5 billion of investment. The reality is it's about $700 million, $800 million today. And of course, as we take and deploy it, that number goes down. But at least gives you a sense that it's an important aspect of our strategy. But if you take that strategy and then you start to think about specific markets, one of the things I wanted to share with you was your development strategy has to be tied to outputs. And one of the things that we think about is time line. And I use the U.K. market, London as an example for this. The London market has subsegments. It has Docklands, it has Slough. And so for us, it's really important to understand what we need where what's the time line, the capacities? What is the empirical data, what's the fill rate, what is basically the pipeline on a go-forward basis. And because we know it takes longer to build, going back to my earlier comment, I would argue that supply eventually will get constrained because it will take longer to build. It is getting harder to get permitting. It is harder to access power. And so the advantages that we have, when we look at this, we say, well, let's meter that in. And so that's us getting ahead of it. Again, we have the competitive advantage with the strength of our balance sheet to make some of those investments stay across a wide array of markets, knowing that we're not just managing 1 year out or 2 years out, it could be 3 years out, 4 years, 5 years. In this case, in Slough 10 or 15 years. So we know we have that capacity, and we're working hard to set ourselves up there. And this is just one of the core major metros in the world. When I think about customer-facing investments or I think of it as SG&A, our SG&A has been increasing. But you see the stacked bar, that goal part is customer-facing investments in support of our go-to-market engine. Mike alluded to the fact that we've invested this year in 100 new quota-bearing heads. Those heads will continue to deliver. But remember, our bookings are moving up, and we anticipate over time, our bookings will continue to increase. I'm now okay with this investment. I'm okay because I see, as Charles alluded to, the size of the addressable tamper for us now has increased. We need more feet in the street. We know we're going to grow. We know we're going to scale. So I'm okay with that. But what we've also told you is we're working really hard to build in all these efficiency initiatives. And we are becoming more efficient. And we're taking that money and putting into place so we can give you the growth that is so important. And the opportunity has never been greater. It's the right decision. Now I will tell you, SG&A as a percent of revenue is going to go down between here and the next 5 years. We are going to build more efficiency in. And it's not we're deploying today for tomorrow, but we don't have to do that next year or the next year or the next year. Yes, we're going to be very selective. And Charles has been good. I've been very specific. There are certain things that we want to do because we know the value it will create. It's about creating long-term shareholder value. Just harvesting the cash on the balance sheet and not investing it. That's not what you're looking for. And if some of you are looking for that, this isn't the right place to be. We are going to invest in growth and the opportunity that's in front of us. Our balance sheet is strong, is very strong. We have the cash, our working capital is in a really good position. Our construction in progress is not a big number -- it's big, but it's not significant on our balance sheet. So whether it's the cash that we have, the cash that we generate or the levers that we carry, we're in a very good position as a business. Now we do have some debt that's going to mature over the next 5 years, $6 billion of debt. I've highlighted it here, $6 billion of debt. The weighted average cost of that debt today is 1.6%. And we are going to have to refinance that. It starts in November of next year, starts in November of next year. But what's most important right now, and I'll get to that the debt piece in a second, is our balance sheet is a competitive advantage, and it is. And when I look at it compared to many of our peers, we are not many public peers, at least in our space, you can see how we're positioned. Our leverage is much lower. Our coverage is much higher. And our AFFO payout ratio is low, 42%. Again, $0.58 of every dollar that we generate post dividend goes back into investing in our future. It gives you a sense of how we're performing. Now as I said, we have a track record of delivering. In the June 2021 Analyst Day, with '21 through '25, we give you a sense of what we thought we could do. Well, 2 years have passed, and if I take guidance from this year, that's 3 of the 5 years. We're basically doing more revenue, more EBITDA, more AFFO, more AFFO per share, and we maintained our competitive -- our operational and competitive flexibility. We are strategically still flexible. We're being able to deliver against that. So as we start to think a little bit about what to tell you about our future. Well, this one, it gives you a sense that as a business, we're going to continue to invest. The opportunity is great. I see a situation where we could spend upwards of $3 billion a year for the next 5 years. That's $15 billion of capital. But go back to one of my prior slides when I talked about AFFO and the payout, we're going to be able to fund the majority of that from the cash on the balance sheet and the cash flow that we generate as a business. We're also going to be able to support digital. We will have disproportionate investment in digital services relative to the revenues that they generate. I didn't forget something that Scott says, but I'll say it on the next slide. So where Scott. You can remind me of something, Scott. But it gives you a sense that we can -- we'll take the cash and we'll invest in. But we're also going to invest in sustainability initiatives. We're also going to invest in efficiency initiatives. Again, we have the balance sheet and the momentum that will allow us to competitively win One of the things I didn't say earlier on is, I believe, given our situation and where we've invested, how we've expanded our platform and extended our services. Many of the competitors that are out there, whether they're owned by private equity or public, they're not even willing to compete in this space. They're not going to -- as Mike said, they're not going to take all the resources and invested in a go-to-market engine like we have. That is an opportunity for us to win. And hence, why we think $3 billion or something close to that, over the next 5 years will represent the momentum of our business, the opportunity in front of it. I believe that we will win more than our fair share that's out there, largely because of all what our customers have said and the opportunity. So where does that leave us? So if you have the growth, you have the opportunity, what do we think revenues could do? Well here, we're telling you we think revenues can grow 8% to 10% per year on a normalized constant currency basis. Again, I'm not including that FX stuff I told you about early on. 8% to 10% on a normalized and constant currency basis. That does not include M&A. It does not include any price increase or price decrease associated with power. I don't know where power is going to go. But it gives you a sense of what we think we can accomplish. The natural question that you will have, I assume, is can you do better, the answer is yes. There's 2 accelerants that were not yet willing to forecast forward because we don't have enough information. But what I can tell you is, Scott told you about the momentum in digital services. We're excited about it. And if we can deliver against what we would like to as an organization, that 10% can grow. That tells you the opportunity or the potential opportunity that we have out there. The other one is AI. I know when everybody saw the NVIDIA stock and all the deployments, you wanted instant gratification from a data center company. We can't give you instant gratification. But what we can tell you is and you heard it from the customers. That was very, very clear. We have a very preferential position because we have xScale. We also have retail in a diverse set of networks and cloud on-ramps and cable landing stations, a set of customers that put us in such a preferential position. But even though we're winning some business it's still too early to forecast what could it mean, again, 2 points of acceleration. We're not yet forecasting that. So we think we'll do $12 billion thereabout by 2027, all else being equal. How does that translate into value on a per share basis? Well, if you have growth and you're building efficiency initiatives into it. We believe we can grow, accelerate the cash that we generate in the business. We represent that with EBITDA. AFFO as a percent of EBITDA is going to be roughly 78% because we're going to take a higher burn for interest expense in this guidance. That then turns into AFFO on a per share basis of 7% to 10%. Of course, when you look at that, we're absorbing not only the debt that we have to refinance, and we're making assumptions on that, but incremental debt that we might draw down to fund that future growth. Again, the majority of our investment in that $15 billion of capital before any M&A is going to be funded from internal sources. But then we're going to draw down on some debt as well where we can in the most efficient market. And what's even more attractive is because we see the momentum in our business, the amount of distribution that we will deliver back to the shareholders is now going to grow at 10% or greater, 10% or greater and is coming from operating performance. It is not about capital recycling, and it is not about returning capital. So it gives you a sense of the momentum in the business. Let me leave you with these thoughts. We have a track record of delivering. We're fundamentally strong. We're expanding our market opportunity because we have a highly differentiated model. We are able to manage through a very complex and dynamic global environment. And we're doing a good job at it that is hard. We have durable advantages, and those advantages are delivered because we have such a strong balance sheet, and we have the liquidity today, and we're going to have the liquidity tomorrow. And we believe that we can create sustained value for our shareholders through growth and a scaling dividend. That's it. That's all I have to tell you. So with that, I'm going to pause here. And I think Charles and Katrina are going to come up, and we're going to take some Q&A if I'm not mistaken. Okay. Thank you.

Well, now you guys are in the comfy but hot seats. So first off, thank you so much, everyone, for spending the day with us and doing a little bit of a deeper dive on Equinix. We truly appreciate the time and the conversation. So we're going to move next to our executive Q&A. We're going to be taking questions live from this audience or you can also submit them online, and I'll be reading them off the iPad. Go ahead and e-mail invest at equinix.com, and we'll get those loaded up. So we've had a few questions come in throughout the day. I'm going to first start with a question from Simon Flannery from Morgan Stanley. So it's a 2-parter. So starting with pricing, what is the opportunity to take more pricing action? And the second part is any additional comments on supply chain, inflation or long-term energy constraints.

Sure. Yes. I mean I think that we've already taken some level of pricing action in the business over the last several quarters. I think that's a reflection of increasing cost of doing business, also a reflection of, I think, the exceptional value that we deliver to our customers. And while, again, as I always tell people we're rarely applauded for those price increases by our customers, I think our ability to pass them through effectively is extremely well established. So I think there are more opportunities. We've talked about, I think we still have work to do in terms of normalizing -- more thoroughly normalizing interconnection pricing in Europe. And so I think we'll continue to look at that. And I think we'll continue to adjust pricing. So I think that is going to be part of that we're -- we got to continue to drive both P and Q, right? And so I think our ability to drive units of volume continues to be good. The bookings engine remains strong. Pipeline and pipeline conversion remains strong. But certainly, I think price is going to be a lever. I think it's going to be depend to some degree -- to what degree and extent that lever is exercised, is going to depend on a number of factors. I do think the supply situation in the market is one that's going to be very interesting to watch over the course of the next 1.5 years or so. And I think there is a very real possibility that you'll see supply/demand constraints that may elevate broader pricing. And so we'll evaluate that. And to the extent that feels like the right actions for the business, then we'll take those actions. So I definitely think -- I think it is something that play will into the model and into our ability to deliver the results that we've laid out. I think we fully expect that. And I think we're in a better position than pretty much anybody else to make it happen.

So I mean just on that. So just one other point on pricing. One of the things I feel to say when I talked about the customers is that 90% of our quarterly growth comes from the installed base as we continue to expand and grow. So we think about pricing all the time, but we also recognize that we want to grow with our customers. And hopefully, they want to grow with us, and that's sort of being therefore rational with our pricing structures and making sure that it's good for everybody. So we can deliver the value to the customer at the same time without being overly aggressive on our price increase, notwithstanding. At some point, we've got to moderate our price structure for cross-connects in Europe.

Great.

You want to the second part of the question rep yesterday.

You covered some of it, but any additional comments on supply chain inflation or long-term energy constraints.

Yes. Let me take the very last part of that because it's the 1 that maybe I worry about most in terms of I think energy is going to continue to be part of this complex and dynamic environment. That's code for it's all screwed up out there. So -- but we -- I do think that, that is going to be an area that we have to continue to watch. I think we have to be in a position to be the preferred partner for nations and municipalities and energy providers, et cetera for a variety of reasons, both because of the value that we can create in terms of stimulating digital ecosystem and the economic growth that it's capable of delivering and doing that in a responsible fashion. So sustainability plays into that. But I think we're going to have to continue to watch that in terms of both the availability of power at the utility level and the availability of power at a permitting level in terms of being able to permit that power for our use. And so those are areas of real focus for us. And I think we tried to highlight the fact that we are in a business that requires a level of expertise in these areas that is simply hard to come by. It's hard to fund and hard to come by. And I think we were ahead of the pack on that and I think are going to continue to stay there. But it is something that I think will continue to potentially impact the supply side of our business, which, again, affect sort of volumes, supply demand and balance and potentially eventually pricing. But we are seeing costs continue to rise. That's probably sort of flattened out a little bit. I think we've seen a lot of that now. I think we've -- we continue to underwrite to the same levels of returns that we were at. That does inherently mean you're going to raise pricing, right? Because it costs us more to build. And again, it's back to that -- back to the question of what our ability to price pass those pricing increases and higher costs, also higher cost of capital. And so -- but all these factors are kind of built into our overall model. I think supply chain is working its way through. I think we've been able to ahead of that for the most part because of the strength of our balance sheet, our ability to pre-commit, our ability to actually put some of that on balance sheet. And so -- but it's not -- it's certainly not easy out there. It's a lot of hard work. And luckily, we've been able to make the investments on the supply chain side. Anything to add there?

Our third theme of the day, right? I mean is there a complex environment. So our next question comes from Nick from Affin Nathanson. So Charles, in your opening remarks, you were talking about faster growth rates of hyperscalers versus other customers and how also the AI will be part of this -- how should we think about the puts and takes of growing alongside these customers versus having a potentially more concentrated customer base?

Sure. First, let me address what might be cognitive dissonance there between sort of Keith's statement about our top 10 customers, a lot of them being -- a significant number of them being hyperscalers sort of coming -- that concentration going down. And my slide, which shows hyperscaler is growing at 1.6x the broader business that sort of is like, hey, how the hell does that math work? Recognize that my 1.6 includes our off-balance sheet revenue. And so which is a significant driver there. And so I think in the -- within the sort of on balance -- our on-balance sheet stuff and the revenue that does hit our income statement. I think we're growing actually that probably at or maybe slightly above the general pace of the business with the hyperscalers. And absolutely, I want to continue to do that because I think it's all about cementing our cloud leadership and ensuring that we can still be that trusted center of a cloud-first world. And by the way, let's just be frank, the hyperscalers are dominant driving forces in digital transformation period, end of story. And so we have to continue to support that cloud migration and adoption of cloud or movement of clouds or workloads to cloud are going to continue to happen. And we have to continue to be positioned to go alongside that. They are also are some of our most productive channel partners. So they are bringing the deals. So not only are they coming and saying, hey, we need interconnection, which I think one of our customers mentioned that to connect to these folks. Very frequently now that they are trying to live on deals of -- they're trying to do $500 million, $600 million, $700 million TCV type contracts on a quarterly basis. Those often come with a discussion with the customer that says, love it, I want to sort of continue to drive digital transformation about cloud, but I've got a bunch of stuff that I need to have in private infrastructure. And so how are you going to solve that? And so -- and that really is often when we're drawn into that. And so the -- so I think the bottom line is we have to continue to cultivate really strong relationships with them and continue to drive that. And if you look at that, I think a very healthy mix of business right now, I think that we're seeing good growth in the sort of more traditional retail side, a little bit of large footprint retail, which we actually work into our underwriting and then really shunting the really large stuff off to xScale. So I think we're in a great position there.

Great. Let me take one more online then we'll flip to the audience. So this is from the buy side from credit sites. Will Equinix target higher ratings or propose a new leverage target.

Yes. Look, we work very closely with our credit rating agencies. And over the last few years, that relationship has only strengthened. We've had more flexibility with how to upgrades I think we're at a very good rating level right now, largely because as we look forward in time, I don't know where interest rates are going to ultimately go but I get a sense at some point, they're going to cap and then they're going to go the opposite direction. So for me and for the business, I think leverage is going to be our friend. And today, as you saw, we're 3.4x net levered. We want to continue to move that leverage up. But I think operating at the level we have today feels appropriate because we want to make sure that we use that leverage accordingly. And I don't think having less flexibility in a period where there's substantial growth in front of us, a vast opportunity that is unparalleled in -- probably in our history, it just feels that we're at a very good spot. So we can access cheap capital or cheapest capital available at the time and operate with the flexibility that we need.

Yes. And the reality is, is that we typically sort of punched above our weight class, if you will, in terms of our ability to access capital under terms that are very similar to what sort of a notch up would do. And so we -- again, dynamics of the market are always shifting. But I think we believe we can get, as you said, best available capital and have a little more leverage on the business, which I think right now with the opportunities in front of us that we talked about on the stage here today, I think, is the right play for the business.

Great. Let's go ahead and live to the room. So if folks want to ask a question, go ahead and raise your hand. We have 2 mics.

Alex Waters from Bank of America. Maybe just first on the long-term guidance. I appreciate the update. Just wanted to touch on the 50% EBITDA margin that was in the 2021 guidance? And then secondly, just on the power transmission issues. I just wanted to get your commentary on how that's impacting the development pipeline.

Sure. So we, of course, knew that would come that question. And -- so look, I mean, as we've been telling folks, we absolutely believe that continued driving operating leverage is critical to the business. So I still believe that we are going to have the scale to generate 50% EBITDA margins in the business over time. But we're always balancing that pursuit against long-term value creation. And so rather than sort of lay out a new time line, which you guys would ask us about every quarter. We are, instead, I think, saying we are committed to long-term margin expansion. We believe the 50% is achievable, and we'll look to achieve it on what we think the pace is that is most value creating for the business long term. And so that's kind of where we are in that. I do think that there are a number of areas that we are investing in ensuring operating leverage. So simplification and automation across the business continues to be a priority for us. But there's also areas where we're invested a little ahead of the curve. I would say if you look at Mike's chart and all the head count that he seems to have grabbed we've invested ahead of the curve there. And so -- but in all series, that's because it's a very productive go-to-market engine. And so -- and we're continuing to shape it for the opportunity that we think is ahead of us. So -- but over time, we would expect to scale into that and drive more -- drive better margins. And so -- and on the operating side of our business, Ralph is constantly looking at how to continue to streamline automate, and we are investing from an IT perspective to help them do that. And John as well in terms of just the broader how we operate the business day to day. So there are sources of operating leverage I think we're going to be very tight on G&A. The S part, we've been a bit more forward leaning on because of what you've seen here today, but I think we're going to be very tight on G&A, and our teams understand that and are aware of it. So that's where we are on the EBITDA margin side. On Power Transmission, I think power availability probably is what you're talking about. We don't see it meaningfully impacting our development pipeline. We are in a good position, we've got the allocations that we need to continue to drive the committed projects. As I said earlier, my concern is longer term, ensuring we can get the use permitted that we're going to have the availability. But we're also going to continue to invest from a technology standpoint to try to mitigate those risks over time. I think on-site power generation going to be a key part of the future for our industry. And so we're already investing ensuring that. We've already got a facility that we've got up and running in Ireland that we -- for a variety of reasons, that people understand well in Ireland that we already have fuel cells on natural gas that are a primary source of power availability there. And so those are the kinds of things that I think we'll continue to look at to mitigate that, but we're going to have to be working every day to make sure that we're positioned well on the power front.

Frank Louthan with Raymond James. I guess 2 questions for Keith. What sort of incremental cost of debt do you have in your assumptions for the outlook? And then looking at your capital plan going forward. Can you comment on what the sources of that capital will be between debt and equity and other.

Yes. I'm looking my -- Yes. I give you a sense at roughly our source of debt over -- again, recognizing it's not going to be until the back end of next year. It's 4.5% to 5% to give you a sense. And so we recognize that, that is meaningfully higher than what we are borrowing at. But as you also know, we've been sourcing capital in different markets. We recently took down $600 million in Japan at roughly 2.2% over 14.6 years. We're looking at Switzerland right now. I think you could see us accessing the Japanese market again. But to the extent that we have to go to the market and actually source investment-grade debt over term. I can see a scenario where we might just draw down on our unused line of credit for some period of time if we ever had to If the market conditions weren't permissive, if you will, to driving an efficient borrowing rate. And then as it relates to just generally speaking, our sources of capital. Again, it's -- the vast majority of it is going to come from internal generation. So the cash that we generate in the business. Secondly, it will come from the cash that we have on the balance sheet. Thirdly, it's going to come from debt. And I would say probably an overweighting of debt, probably 60-40 debt relative to equity.

I guess I'll just make one comment and that is that we -- I am very pleased to be playing the hand we're playing from a balance sheet perspective, and our team deserves a ton of credit for that.

Yes. I think what's most important as we think there's real value in raising debt, but at the right time, we use equity because we try and find that balance gives us the comfort strategic and operational flexibility that you certainly see today. puts us in a competitive advantage. It certainly is seen very favorably with our rating agencies, but also takes a little bit of risk off the table in periods of great volatility or transition I just feel a lot better with it. But that said, we're going to be very disciplined about our equity capital and when we raise it. And we've used the ATM sporadically, and we've done it at a very effective time where we've been able to access the capital markets efficiently. And so we'll continue to do that. But our -- I guess our position is that we will look at more to debt than we would to equity, but we're always going to nibble a little bit on the ATM just because we think it's is a good practical way to put capital on to the balance sheet.

Irvin Liu with Evercore ISI. Thank you for the presentations today. Charles, you mentioned earlier the prospect of a U.S. xScale facility. And given the opportunity presented by AI. Do you expect purpose-built AI model training facilities to be part of your xScale strategy looking forward? And my second question, I'm going to stick with xScale. How would you characterize the appetite for JVs among the financial sponsor community given some of the cross turns such as higher rates?

Great question. So I would say that I don't see it as much purpose built for that specific use case. I do think AI is going to be one training in particular, but over time, a broader, I think, AI opportunity as a driving force for growth, both Axtel and retail. But I think sort of we -- I was talking to somebody at lunch about this. I think we have to be very careful in terms of the notion, for example, we've heard from some people is, hey, we don't really care about resilience. And so we just want capacity to build us an end facility. Well, I don't -- I think we're going to think very carefully about that kind of thing because sitting there holding a white elephant after some term on a facility that may not be valuable for some other use case is probably not the kind of thing we're going to do. So now do we need to adapt our design and ensure that we can provide the power density and the cooling capacity, et cetera, to handle the workloads and some of these things that were -- yes. But I think our team is adapting the designs effectively for that, and I think we'll be very careful with the underwriting. We're not going to be all things to all people. That's not the game that we play. But I do think there are going to be opportunities where we're going to have some level of distinctive advantage on both the training side and over time, more specifically on the inference side. So I do think xScale will benefit from that. And it does probably mean -- and I see Keith smiling at me already that we're probably going to have to sort of increase our aperture of customers. We have been very focused. In fact, almost all of our leasing has come from a handful of customers. All of our leasing has come from hand of customers, I think we're going to probably need to take a little bit of a click out and look at what some other strategic customers who would be generating those types of workloads there. And so I think that -- and then what was the second piece, the JV appetite. Look, it's not what it was, right? And we feel very fortunate to have the partners that we have. GIC's pockets are as deep as they come and they've been a great partner to us. And so we're -- but I think as we look at kind of where we go next, I do expect that we would entertain other possible JV partners around the world. I think that, as you've seen, a lot of people have tried to sort of what is -- what do they say off to imitated, never repeated. There's a lot of people that are going and trying to do some of the same things. And there's some hard slogging in the market, I think, to try to get people all the way there. And so it's definitely not going to be, I think the current environment even for us, wouldn't be as easy as it was as receptive I guess as it was. Nothing is easy. But I do think that we're going to be differentiated in our approach and I think we will find the right types of partners in -- if that's what we decide to do.

Great. I'm going to go grab one from online. So this is some synergy, John [indiscernible] on M&A. So the last 2, 3 years, you've seen a distinctive slowdown in your scale of acquisitions. How do you feel about the incoming money or squeeze coming from potential deals by private equity? And do you foresee any really large acquisitions in the future?

Yes, I get that question a lot in terms of, hey, do you see any sort of transformational or platform-type acquisitions. I would say I think those are less available to us. But I think there are still deals that are going to have meaningful sort of accretive value to our strategy. And that could come at a variety of price tags. And so I think some of these -- particularly, I think Jeremy and his team in the Asia region and the ASEAN markets, in particular, identified opportunities that might be opportunities for us to continue to expand some of those organically and some inorganically, that might be not those larger ticket-type deals. And I think we'll see other opportunities like that around the world. So I think that's probably going to be the more typical but I think there are also things that as we look at exercising the full strategy that come -- could come with slightly larger price tags, but not be as comprehensive or as so they're not going to look like a Verizon or a Switch & Data, Telecity, et cetera. And so I think it's going to -- the landscape on M&A is going to evolve a little bit. And then eventually, I think that as we get our feet under us on digital services, I think that's an area where we may look at capabilities that could be additive to that strategy. But I think right now, we're really focused on driving execution of the plan in front of us.

I'll just add that -- and again, we talked about very targeted. And also remember my comment, we're not fearful to actually find partners or people who want to partner with us inside some of these markets. So that creates sort of an attractive situation for us. So we don't have to go all in and it gives us maybe opens the aperture and opportunities that will present themselves. Another thing, when I was talking about the acquisitions, I used Infomart as an example, when I think about Axtel, Entel, MainOne, GPX, I'm missing one, Bell Canada assets. We see those opportunities as we continue to integrate them into our platform. and expand from that initial investment. Again, they were very targeted investments, but we believe that they can create immense value for us. So it doesn't have to be a massive acquisition for us to have success. And so whether private equity chooses to bid up an asset doesn't necessarily mean that's the asset for us.

Michael Elias, TD Cowen. A question for you guys. I guess a bit of a philosophical one. So the -- as I think about it, the competitive advantage of Equinix goes back to the pioneer -- you guys pioneering the carrier-neutral data center, right? And bringing the networks in. That lent itself then to your market position of cloud on ramps. But you invested ahead of that, right? You guys essentially help bring the direct connect to market. As we think about the next evolution and potentially AI being one of those, how are you getting out in front of that to ensure that as with the first 2 evolutions, you have -- you're able to garner a large market share of that. That's my first question, and then I have a follow-up.

Yes. I think it's about the platform vision and our ability to really execute on that vision. So it's -- I was -- I talked about when the addressable market that we were moving -- the market is moving towards us and we're moving towards the market and people like, okay, Charles is speaking in codes again. But I think that -- I think there is really -- what that means is I showed that chart of the how the $140 billion market cap -- I mean, sorry, addressable market might split between digital leaders, digital followers and digital starters. And the faster they can move towards us and become those digital leaders, that we -- our ability to execute and our probability of win goes way up. And the way that we can do that is execute on the platform vision one, continue to invest in the resources that we have that are helping them advance their digital transformation agenda, but also investing in the platform vision, which requires a level of platform enablement. There's this -- I talked about that sort of sideways text on that platform vision chart, this is platform enablement. That's a heavy lift for us in terms of saying, how can we ensure that key technology partners can bring their value to the platform to create whole solutions to solve customer problems faster. If we can do that, that's when -- that's how I think we accelerate because we did this more in sort of a hand-to-hand kind of combat ways, right? We were sort of go and finding the magnets, bringing them in, doing that. And we're really good at that. We've done that extremely well, right? But I think we've got now unlock the power of technology to say, we're just going to open it up so that you can come here and you can frictionlessly deliver your value on the platform. And so -- now that's easier -- way easier for me to say on stage than it is to actually do but I think that's how we sort of continue to maintain the relevance and the sort of power of our business model in a forward-looking way.

And then the second question would be on the M&A front, I mean, you've talked about it. You said in the past that you'd be willing to stretch for the right acquisition. It seems like even here you're talking about Infomart, what was strategic about Infomart was a key exchange hub. As I think about it, we know that there are some interconnect assets out there in the wild. It feels like you're teeing us up for something that's coming down the road. Am I interpreting that correctly?

Well, we're not going to -- I think we look at all transactions, as you know, Michael. And so again, right out of circumstances where the right opportunity, we'll certainly -- we'll go after it. But again, that's our business. And that's the foundation that we've created for ourselves. It starts with networks, it's the cloud on-ramps, cable landing stations. It's all things digital. And again, we've created this environment for ourselves. And as we sort of extend that platform, if we can do it, we're going to continue to do it, and AI can sit on top of that as well.

Great. So that actually concludes our executive -- oh, one more.

Let's do -- we're going to do more there. All right. Michael was desperate to get in there.

Mr. Rollins.

Mike Rollins from Citi. So if I could ask 2.

Of course.

Do I need to read the reminder again, Mike?

In a -- parts. So the first 1 is just go back to the EBITDA question. So with the revenue growth guidance, and the AFFO per share guidance and EBITDA sandwiched in between. Is there just a simple way investors should think about what the EBITDA growth should be over the next few years to get to that AFFO goal and take into account the comments you're describing on efficiency and operating leverage.

Well, I know you've got a very sophisticated model, Michael. And so you don't need me to tell you how fast we can get there based on the AFFO per share. Suffice to say, Charles was very good. Look, we want to invest in things that are important, but we are going to build efficiency into our SG&A base. I also think Ralph can -- I'm committing you to Ralph. I can -- he's going to run the IBXs more efficiently over time. And I think our gross profit can improve. So it's going to be a combination between the 2. But certainly, to drive to 50%. We just don't want to put a time line on it, largely because we want to be discrete about our investments. But the other part that's really challenging right now, we have no idea what Powers is going to do. And it just doesn't feel like we should be talking every quarter about an EBITDA target when we really are focusing on value per share. So hopefully, that answers your question. But it's relatively formulaic as you can appreciate. We're going to grow the business. It's going to drive more value. We're going to run the business more efficiently in the SG&A line.

And then secondly, regarding the growth in the business. So you described earlier some of the penetration you have in the Global 2000 accounts. And you outlined in another slide, the Global 5000 opportunity that the company is focused on. As you look at that 5-year business plan, how do you want to see penetration improve or deepen from where it is today to what's that base case level look like in 5 years?

Yes, I don't know that we have a specific, but I would tell you that -- so we're -- I think 58% on the -- or something like that on the Fortune 500, 41% on the Global 2000 and -- so we've come a long way in the last several years in terms of our enterprise penetration, and we're really seeing good momentum there. But the beautiful part and the reason that I -- the team originally had the Fortune 500 because they were like, well, it's a bigger number, let's put that on there. And I said, well, no, I would like to put the G2000 on there because it still demonstrates progress but also demonstrates the additional opportunity left to be had, right? We've got it's the 59% still left to go get and significant wallet share in the 41% to be had. And so I would say that right now, we're probably getting those people that are those digital leaders, right? And the -- and we're able to access wallet share more effectively. And this is what I really mean by can the market move to us. And it's about accelerating their -- both their appetite for digital transformation, which I think AI is going to continue to contribute to and their ability to execute. Oftentimes, I actually think it's not budgets, but its ability to execute that are holding people back from the pace at which they're accomplishing their digital transformation. So I don't know what the right number is, but more Star new logos is absolutely required. I'm getting the head nod from Mike, he understands that. And then -- so that's clearly got to be a part of it. And I think -- I don't know exactly what that number is, but that's one that I think we're going to want to continue to watch I think it's a major driver in the business for sure.

Great. So we're going to go ahead and ramp on the logistics side. For those in person, please join us for cocktails and kiosks after this. And let me turn it over to Keith for any final words.

Great. And -- so let me just take this opportunity, again, to thank all of you for making the effort both in person and online. Secondly, I want to take this opportunity on behalf of all of us to thank our Investor Relations and IR team and certainly the production team for putting this together. So -- thank you to all of you that put this together. And we look forward to having drinks with you. So again, thanks very much, everybody, for joining us today.

Thanks, everyone.

Great.

That concludes our scheduled program. Thank you for attending Equinix Analyst Day 2023. To the access recordings or copies of today's presentation, please visit the Investor Relations page at equinix.com.