NETWORK SERVICE PROVIDERS

DIGITAL EDGE PLAYBOOKTransforming network service provider delivery for digital business

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PURPOSENetwork service providers need to evolve their network platforms to enable digital business at the metro edge. This playbook can help NSPs accelerate their network evolution by implementing an Interconnection Oriented Architecture™ (IOA™) strategy leveraging Platform Equinix and its new SDN capabilities.

TARGET AUDIENCE

• Business Strategists

• Network Architects

• NSP Ecosystem Partners

TABLE OF CONTENTS

ABOUT THIS PLAYBOOK• The pace of the digital economy is accelerating

• Consumer and enterprise expectations of service are rising, as they demand a better digital network experience

• Application needs are shifting, requiring more bandwidth, lower latency and ubiquitous availability

• These challenges provide a growth opportunity for network service providers. They will need to upgrade their infrastructure, transform service delivery and enable new digital services

• The enclosed playbook will assist NSPs leveraging an interconnection-first architecture deployed on Platform Equinix™ to reach everywhere, interconnect everyone and integrate everything to transform for digital business

CALL TO ACTION

3 PLAYBOOK STEPS1. Network evolution 2. NSP IT re-architecture 3. Digital edge service creation

2 Call To Action

3 Storyboard

4 Market Trends

5 Interconnection Insights

6 Current State Constraints

7 Future State Capabilities

8 Playbook: Strategy

9 Playbook: Roadmap

10 Playbook: Platform

11 Getting Started

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CONSTRAINTS & CAPABILITIES

PLAYBOOK

The Digital Edge (DE) Playbook provides NSPs a differentiated strategy on how to accelerate this transformation.

STRATEGY PLATFORMPlatform Equinix provides the critical capabilities NSPs need, including SDN interconnection, ecosystem density and global coverage.

ROADMAPLeverage the IOA roadmap customized for NSPs to implement the DE Playbook.

NSP platforms are architected around their core network, creating constraints that must be addressed for digital business.

CONSTRAINTS CAPABILITIESTo solve, NSPs are implementing new capabilities, including dynamic provisioning, and distributing network controls, and moving functions closer to the digital edge.

STORYBOARD

TRENDS &INSIGHTS

Digital business is reshaping NSP sources of growth and forcing changes to the NSP platform.

TRENDS INSIGHTSInterconnection Bandwidth use is anticipated to rapidly grow and be NSPs’ preferred approach to scale for digital business at the edge.

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MARKET TRENDS

…AND TRANSFORMING CAPABILITY REQUIREMENTS OF THE NETWORK

Implications

• Technology innovations are trans-forming the role of the network and how services are delivered end-to-end

• Network service providers and supporting ecosystem partners need to create heterogeneous, end-to-end network models to interconnect people, locations, clouds, data and things with digital services both locally and globally

Source: Accenture, CommsDay Summit: Accenture's David Ellis

…WHILE CHANGING APPLICATION NETWORKING NEEDS…

Implications

• Digital is creating new commerce and collaboration models that require increased bandwidth and lower latency with tiered quality of experiences

• Network service providers and supporting ecosystem partners will need to upgrade infrastructure, backhaul and rewire topology to accommodate digital app needs

Source: GSMA, Intelligence — Understanding 5G

DIGITAL IS RESHAPING NSP's SOURCES OF GROWTH…

Implications

• Digital services are creating growth opportunities for network service providers and supporting ecosystem partners

• Consumer and enterprise expectations of service are rising, as they demand a better digital network experience

Source: EY, Global Telecoms Playbook

Summary: Digital business is reshaping NSP sources of growth and forcing changes to the NSP platform. Demand for digital services is rising. This is creating the need to support new application networking models. At the same time, technology innovation is transforming the role the network plays and how services are delivered to support digital business.

OPERATOR PERCEPTIONS OF 2020 REVENUE MIX

Q. What proportion of revenues do you believe digital services will account for at your organization

in five years' time? (Please select one.)% Respondents

0 5 10 15 20 25

19

19

22

13

1316

0%-5%

11%-15%

25%+

6%-10%

21%-25%

16%-20%

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UNITED STATES LATIN AMERICA

ASIA-PACIFIC EUROPE

INTERCONNECTION AROUND THE WORLD2020 PROJECTION

LARGEST VOLUME

40% PROJECTED GROWTH

AND

1795 TBPS BANDWIDTH

FASTEST GROWING

62% PROJECTED GROWTH

AND

626 TBPS BANDWIDTH

STRONG VOLUME

44% PROJECTED GROWTH

AND

1451 TBPS BANDWIDTH

HIGH GROWTH

46% PROJECTED GROWTH

AND

1120 TBPS BANDWIDTH

Opportunity

Network service providers and their supporting ecosystem partners can target growth scenarios based on use cases to build and monetize network capabilities around increasing demand for interconnection of digital services.

Source: Equinix, Global Interconnection Index

Opportunity

Network service providers and their supporting ecosystem partners can strategically plan coverage and target markets to take advantage of increasing demand for interconnection of digital services across markets.

Source: Equinix, Global Interconnection Index

Opportunity

Network service providers and their supporting ecosystem partners can capitalize on increasing demand for interconnection to integrate digital services.**

Source: Equinix, Global Interconnection Index

MPLS

24%

Internet Interconnection4%

45%

Summary: Interconnection Bandwidth is anticipated to rapidly grow as NSPs’ preferred approach to scale for digital business at the edge. Interconnection Bandwidth is outpacing internet and MPLS traffic growth. Interconnection creates monetization opportunities for NSPs, as enterprises interconnect with NSPs to rewire their topology to scale for digital business.

* Interconnection Bandwidth is the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points.

** Interconnection is the private exchange of data with a diverse set of counterparties.

…AND NETWORK PROVIDERS BECOMING THE PRIORITY INTERCONNECTION USE CASE

INTERCONNECTION BANDWIDTH* IS PROJECTED TO OUTPACE GROWTH OF INTERNET & MPLS TRAFFIC...

INTERCONNECTION INSIGHTS

….WITH COMPOUNDING GROWTH YEAR-OVER-YEAR ACROSS ALL REGIONS & INDUSTRIES…

100 200 300 400 500 600

1986372

286

5

12547

45

88

52%

48%

73%

160%

38%

68%

1%

2%

19%

11%320

NetworkProviders

Financial ServiceProviders

Cloud & IT Providers

ContentProviders

Supply ChainProviders

CAGRInstalled Capacity (Tbsp)

2020MIX

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CURRENT-STATE CONSTRAINTS

Traffic

$Investment & Revenue

Center

XNew Service Opportunity

IT & Data Analytics

Network Controls & Functions

Physical PoP

CloudsHQ Centralized Systems

Contracts & Processes

Media & Entertainment

Video Chat & Conferencing

Smart Home/

City

IoT/ Connected

Car

Carrier Hotel

Problem 1: • Many layers, devices

and complexity• Fastest growth is in

metro traffic with more bandwidth across more devices and mostly local interactions. This traffic needs to be localized in order to offload the backbone.

• Demand for more services in proximity with lower latency

• Result impacts user experience

Problem 3: • Access to inter-region

bandwidth is not well integrated

• Limits optimization of global flows

• Limits expansion in new geographical markets

Problem 2: • Traditional edge infrastructures

need to evolve into agile, effi-cient and integrated services

• Not designed for frequent change

• Not fully positioned to leverage ecosystem partners (share costs and leverage innovation)

Problem 4: • Cost and time to produce

new services is too high, incurring risk

• Markets and requirements can change in the time it takes to assess and execute on an opportunity

• Uncertainty further reduces speed

• Margin pressures increase cost of failures and reduce willingness to invest

Expensive to scale: Scaling and upgrading requires signifi-cant long-term capital investment—up front, and with risk—given the pace of change.

Slow to provision: Customers need on-demand service to keep pace with digital. While the lead time to supply is improving, the gap is not sustainable.

Expansion risk: Barrier to entering new markets is high and the expense incurs significant risk if the anticipated demand does not materialize.

Narrow services: Changing traditional services is diffi-cult, and creating new service offerings is expensive and time-consuming, with risk of failure penalty.

Summary: NSP platforms are architected around the core network, creating constraints that must be addressed for digital business. The first comes from the expense and risk of owning and maintaining all aspects of the infrastructure. Combined with time, process and contract-intensive activities slowing things down, it becomes clear why market expansion and new business development is limited. Key changes are needed to architect around these underlying problems.

3

1

4

2

Cable Landing Station (CLS)

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Network Control Points

FUTURE-STATE CAPABILITIES

Shift 1: Flatten metro edge• Metro-based network

control point (NCP)• Intelligence moves out to

endpoints (programmable NID)• Application services shift to

metro interconnection hub• Simplify topology and

reduce hops• Remove equipment from

COs, aggregate and backhaul into NCP

• Service chain in NCP with lowest cloud and ecosystem latency and greatest bandwidth

• Connect to wholesale capacity

Shift 3: Subsea interconnection• Subsea cable landing stations

terminating inside metro interconnection hubs

• Simplifies the topology • SDN enables inter-region

connectivity• Expand market access

Shift 2: Software-defined, on-demand platform• Economies of scale come from

shared re-use• Commoditize the physical and

monetize the virtual (NFV)• Apply software-defined

interconnection and networking (SDN)

• Enable speed with the right (distributed) controls

Shift 4: Create new adjacent services • Platform simplifies new service

offerings and scale requirements• New services have lower risk

with low sunk costs• Generate new revenue streams

by commercializing those services you use internally to optimize costs (e.g., network monitoring for enterprise)

• Distributed analytics provide decision-support insights

• Explore new problems to solve in the global digital marketplace

Digital scale: Converged functions in ecosystem-dense metro locations. Leveraging cloud, SDN and NFV to reduce risk (and IT debt) with right-sized, pay-as-you-go model.

Dynamic provisioning: Integrate on-demand cloud services and software-defined interconnection into the larger SDN and automation platform.

Global market access: Create a low-cost, virtual presence via a remote connect, validate demand and then invest in that new market as needed.

Opportunity ready: Adapt to business changes with new differentiated services, available anywhere, with small investment and low risk.

Summary: Interconnection Bandwidth use is anticipated to rapidly grow as NSPs’ preferred approach to scale for digital busi-ness at the edge. By focusing on metro-based network control points–which are highly interconnected–scale can be solved more seamlessly with pay-as-you-go models. Existing SDN capabilities can be adopted and integrated. New markets can be initially accessed remotely, and together, they enable a modern IT platform to launch new digital edge services.

1

3

2

4

Traffic

$Investment & Revenue

Center

IT & Data Analytics

Network Controls & Functions

Physical PoP

CloudsHQ Contracts & Processes

Media & Entertainment

Video Chat & Conferencing

Smart Home/

City

IoT/ Connected

Car

Cable Landing Station (CLS)

Hybrid Systems

Virtual Network

PoP

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Body CopyBody CopyStandardize on metro interconnection hubs as your network control points

• Flatten metro edge into the hubs

• Distribute network functions and controls to the hubs

• SDN interconnect and automate

Leverage the combined network and IT functions in the network control points

• Commercialize network & security management

• Offer smart city/home services from the hubs

• Interconnect and resell digital payment services

1

2

3

Integrate IT services in the network control points

• Deploy hybrid cloud footprints in the hubs

• Distribute IT analytics and security controls to the hubs

• Integrate with SDN interconnect fabric

PLAYBOOK: STRATEGY

1

2

3

1

2

3

1

2

3

EVOLVE THE NETWORK

NSP IT RE-ARCHITECTURE

CREATE DIGITAL EDGE SERVICES

1

2

3

When solving for digital, think Interconnection-first!

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PLAYBOOK: ROADMAP

Create DigitalEdge Services

NSPs Re-architect

IT

Evolve the Network

Capacity Expansion

Establish vPop(s)Implement Multicloud Connectivity Across Geos

Integrate Software-defined NNI

Cloud

Dist

ribut

e BSS

/ OSS

Ser

vices

Deploy

Hyb

rid C

loud

Foo

tprin

ts Lo

cally

Distrib

ute A

nalyt

ics &

Mon

itorin

g

Expa

nd IT

Sec

urity

Per

imet

er

Edge

IT &

Agg

rega

tion G

atew

ays (

e.g., I

oT)

Tower Backhaul

Enterprise Security Management

Enterprise Network Management

Monetized Customer Data

Smart Home / Smart City

Digital Payments

Digital-readyNetwork

NSP

1

2

3

2 Integrate IT services in the network control points

Leverage the combined network and IT functions in the network control points

1 Standardize on metro interconnection hubs as your network control points

3

Summary: Leverage the IOA roadmap customized for NSPs to implement the DE Playbook. Evolve the network by converging into metro network control points that integrate SDN, NFV and cloud access. Re-architect IT to further optimize support services with cloud and gain more insights into efficiency and customer usage—with distributed analytics. Create digital edge services (and new revenue streams) leveraging the new secure intelligent architecture.

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PLAYBOOK: PLATFORM

REACH EVERYWHERE

Deploy digital infrastructure anywhere you need to be

INTERCONNECT EVERYONE

Discover and reach anyone on demand, through one connection to the world

INTEGRATE EVERYTHING

Activate your digital edge through leading technology tools, partners and services

Summary: Platform Equinix is being physically and virtually connected around the world, providing NSPs one global platform to dynamically connect to their customers, partners, clouds and between their own points of presence. NSPs now have access to the largest interconnected ecosystem of enterprises, clouds, networks and IT providers to achieve differentiated advantages. With these capabilities NSPs can realize their IOA Strategy.

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Equinix Marketplace Promote network services to installed platform customers worldwide. eqix.it/MarketplaceLogin

The Platform Equinix™ VisionSee how platform coverage, new dynamic SDN connectivity, and ecosystem access enable new capabilities for NSPs.eqix.it/PlatformEquinixVision

IOA™ Knowledge BaseDownload proven network architecture blueprints and design patterns based on industry-leading implementations of IOA.eqix.it/IOAKB_PTC

Global Interconnection IndexLearn how Interconnection Bandwidth growth is shaping next-generation opportunities for NSPs.eqix.it/InterconnectionIndex

GETTING STARTED

WAYS TO ENGAGE

Request a more detailed briefing or strategy workshop with our experts.

Contact your Equinix Account Executive and learn more at equinix.com

Equinix AmericasMain: +1.650.598.6000 Email: info@equinix.com

Equinix EMEAMain: +31.20.754.0305 Email: info@eu.equinix.com

Equinix Asia-PacificMain: +852.2970.7788 Email: info@ap.equinix.com

UTILIZE PLAYBOOK

COMPANION RESOURCES

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Equinix.com © 2018 Equinix, Inc.

Equinix, Inc. (Nasdaq: EQIX) connects the world’s leading businesses to their customers, employees and partners inside the most interconnected data centers. In 48 markets across five continents, Equinix is where companies come together to realize new opportunities and accelerate their business, IT and cloud strategies. In a digital economy where enterprise business models are increasingly interdependent, interconnection is essential to success. Equinix operates the only global interconnection platform, sparking new opportunities that are only possible when companies come together.

Learn more at equinix.com

Equinix AmericasMain: +1.650.598.6000Email: info@equinix.com

Equinix EMEAMain: +31.20.754.0305Email: info@eu.equinix.com

Equinix Asia-PacificMain: +852.2970.7788Email: info@ap.equinix.com