Hello and welcome to the conference call. (Operator Instructions) I would now like to introduce the host of today's conference call, Mr. Jason Starr, Director of Investor Relations. Sir, you may begin.

Good afternoon and welcome to our Q4 2007 results conference call. Before we get started, I would like to remind everyone that some of the statements that we'll be making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release and those identified in our filings with the SEC, including our Form 10-K filed on February 28, 2007 and Form 10-Q filed on November 2, 2007. Equinix assumes no obligation and does not intend to update forward-looking statements made on this call. In addition, we'll provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why the company uses these measures in today's press release and on the Equinix Investor Relations page at www.equinix.com. With us today are Steve Smith, Equinix's Chief Executive Officer and President; Keith Taylor, Equinix's Chief Financial Officer; and Margie Backaus, Equinix's Chief Business Officer. At this time, I'll turn the call over to Steve.

Thank you, Jason. I'd like to welcome everyone to the call today. By any account, 2007 was another great year for Equinix. And as you saw earlier this afternoon, we're increasing our expectations for 2008. On today's call, we will be doing a quick review of Q4 and full year 2007 results, but we'll focus mostly on our opportunity in 2008. We will provide updates on our expansions, including our recent move into the Netherlands, and update on our 2008 focus to accelerate the growth of our interconnection business, updated information on our customer demand and satisfaction analysis, and then, finally, I'll wrap things up with an outlook for 2008. 2007 represented another year of growth in excess of 30% organically, 46% including the European acquisition. And we saw accelerated momentum across the board on our key metrics, including EBITDA, number of cabinet billing and MRR per cabinet, while maintaining a high level of operational reliability. We solidified our market leadership position by expanding into seven European markets via the IXEurope acquisition and raised $1 billion to help fund this as well as our announced future expansions. We opened five IBXs in our existing US and Asia Pacific markets, including Washington DC, New York, Chicago, Tokyo and Singapore. In total, this added approximately 6,700 cabinets and almost a 30% increase and just over $150 million in revenue capacity. We have continued an aggressive strategy to serve accelerating demand by announcing phased expansions in nine of our markets. And finally, we strengthened several operating mechanisms to ensure clarity and accountability around our pipeline and demand analysis, a data center expansion evaluation committee to more effectively allocate our capital across all three regions, and a business development council to drive overall strategy for the company. As we shift our focus into 2008,…

Thanks, Steve, and good afternoon. I'm pleased to provide you with our fourth quarter results, yet another strong quarter for the company both financially and from a metrics perspective. Let me first start with the revenues. As Steve mentioned, our 2007 revenues were $419.4 million better than our expectations including $37.5 million of revenues from Europe. Organic revenues were $381.9 million, a 33% increase over the prior year and up greater than $95 million year-over-year, the largest absolute dollar increase we've experienced in our nine years of operation. This reflects the fifth straight year of greater than 30% growth on the topline. Our revenue results reflect strong bookings and pricing trends in each of the four quarters for the year. Q4 revenues came in at $138.7 million, a 34% increase over the previous quarter and up 74% compared to the same quarter last year, including $32 million of revenues from Europe. Now, looking specifically at US IBXs that opened in 2007, that being our Washington DC, Chicago and New York expansion IBXs, demand, and in particular, booking activity is strong and the pricing trends remain consistent with our expectations. Revenues attributed to Washington DC IBX exited the year at approximately $25 million of annualized revenues, ahead of our planned objectives only nine months after the opening date. Revenues attributed to the Chicago, New York expansion IBX has started to ramp with approximately $600,000 of revenues reported in the quarter. As we look forward into Q1 and 2008, we continue to see a strong pipeline across all of our available market and expect our pricing objectives to remain intact. Looking at churn, our MRR and cabinet churn for the year was approximately 9.5% and 9.7% respectively and consistent with our views that churn would decline throughout the year. For the quarter,…

Thanks, Keith. I'd like to now spend a few moments on our recent announcement that we have expanded our global reach to include the Netherlands with the acquisition of Virtu, a regional original network-neutral provider with two existing data centers along with one under development in the important market of Amsterdam. The purchase price of Virtu was $24 million plus the assumption of $7 million in debt. We expect this transaction to be EBITDA accretive in fiscal year 2009. We've been tracking this market for some time and in our most recent customer demand survey, Amsterdam showed up second only to London from our customers who indicated their desire to expand within Europe. As the fourth largest data center market in Europe after London, Frankfurt and Paris, we see a unique opportunity in the Amsterdam market to extend the Equinix brand and our service offerings. This is an attractive location for enterprise and financial services companies with improving pricing comparable to the French and German markets. It's also important for us because Amsterdam is one of Europe's largest markets for Internet infrastructure, interconnection and peering. We also see a great opportunity to work with AM6, widely recognized as the world's leading not-for-profit Internet exchange. As we mentioned on our last call, one of the main opportunities that we see in 2008 is to continue to grow our peering and interconnection offerings into Europe, and we believe that this transaction will be a key component in achieving this. We've already made several important moves in Europe. First, we've announced that the German Internet Exchange the DE-CIX will expand into our Frankfurt center in Q1. Second, we're in positive discussions with the AM6 to pop our new Amsterdam site and are confident that their services will be available to our customers when…

Yes, good afternoon. A couple of questions. I'm wondering with regard to the revenue and EBITDA upside that we saw in the quarter and the guidance raise, if you kind of strip out the very recently announced expansions, how much of that is happening in Europe versus Asia versus the US? And then, if you can maybe comment on trends that you are seeing in terms of repricing versus upselling versus new business, you said 80% is sales or at 15 logos, but in terms of the upside that we saw in the quarter, how much of that was due to repricing versus upsell or new business relationships?

Jonathan, this is Keith. I'll take the first part of the question, and then I'll let Steve jump in as appropriate. I would tell when you look at basically the upside relative to our expectations. When you look at Europe, it basically came in as we expected in our prior calls. We anticipated just about $37 million of total revenue for the European region coming from the stub period through the end of Q4. So what I would really tell you is that a lot of the growth came out of our two organic regions. The US and the Asia-Pacific, we have seen consistent pricing as I've said at least in my remarks that the pricings remain firm meeting our expectations. And so what you're seeing is frankly you're seeing a lot of incremental growth. As I think Steve mentioned, we're at a booking level that's comparable to our highest levels and the book to bill variable has continued to remain relatively short, so we're getting some pick up on revenue from that perspective as well. But we're not going in and adjusting pricing over our customer base, although as we sell in today's current environment, we do get better pricing than we did a year ago, that's not driving a lot of the upside that we saw in the quarter.

Jonathan, the only thing I would add is, I think the second part of your question is predominantly from upselling, it went in excess of 80% of our revenue coming from our existing customer base. It's on that side as Keith suggested, where there is not a lot of repricing going on. Outside of what I commented on around the interconnection business that we're trying to recede in Europe.

Okay. And then following-up on the comment on churn, which sounds like it was significantly lower than expected. What surprised you on that, and it sounds like for '08 you maybe guiding for a bit of an uptick, what are some of the drivers there? And then finally, Steve, maybe you could comment on the restructuring of the cross-connect service in Europe and maybe give us a little bit of the preview as to what you have in mind there?

So let me deal with churn. The 1.1% and 1.2% churn for the quarter was sort of consistent with what we had thought we'd come in at. If you recall on our prior earnings call, we said we expect the churn for the year to come in between 9% and 10% and based that we hit it right down the middle of the pocket. So it was as expected, so no real surprises there. And then as we look forward into 2008, again, it stems off our prior call. We feel comfortable today saying 8% to roughly 2% churn per quarter. And as we've said, we feel we've got some good conservative guidance out there. I'm not saying that churn will come at 8%, it's a good range to work from. But right now, we're not seeing any meaningful churn on horizon. But that's something that we planned for and model again as we give our guidance to the street.

Yeah. And Margie may add a comment here, Jonathan, around as the interconnection, cross-connect business. Outside of the relationship, the collaborative relationship that we're trying to strike in and with the history, with all the Internet exchanges that I mentioned. I think we're going to continue to work with that ream to look for opportunities for putting our fabric in the datacenters where appropriate. We have worked very collaboratively with the Internet exchanges today, and we are setting up the sales engine over there in Europe to be able to be incented to sell cross-connects. And there is some repricing going on there and some education going on there that Margie and her team are doing, but there's quite a bit of activity in that direction.

And I think if you look, as you guys are aware with the traditional way the cross-connects product to carriers and other participants in the center traditionally have done. They have done differently from the US. So as it relates to the operations of them, the SLAs associated with them, the reliability of them, those are all the things that we're going to kind of restructure. So what you'll see is, as of January 1, we've implemented a price increase to new orders coming in within Europe, and we will continue to tick that up as the year goes on. I mean, clearly, as we see US customers going into Europe. You have got a little bit better opportunity there. But for the embedded base, what we'd like to see is, over the next 12 to 18 months, we'd like to really institute kind of the cross-connects policies, the operational reliability and therefore the pricing that we see in the US, we’d like to migrate that into Europe.

And would that apply to cross-connects traffic that's solely within the datacenter or traffic that also goes through the exchanges?

Both. Definitely both. So it's the same thing in US, right. We don't delineate today between a cross-connect going to a carrier or a cross-connect going to the switch. It is going to be the same phenomenon in Europe.

Thanks a lot.

Thank you.

And the next question comes from Mr. Michael Rollins with Citi Investments Research.

Hi, good afternoon.

Hey Mike.

Hey Mike, how are you.

Good. Just a few questions. I guess the first question I had was, can you help us think a little bit more about the visibility of your revenue? I guess there are some questions about some companies seeing a very different January, for example, than maybe what the end of the year would have been. And so for you guys, are there any metrics that you could throw out around the percent of revenue that comes from existing cabinets already installed and those that you might even be booked and reserved in a way of comparing that, versus the full year guidance that you have thrown out. What percentage is already in that pipeline? I guess the second question that I would have is a little bit more color on what you are doing with contract cycles of your customers? And then the third question would be is there any update in terms of the possibilities of you qualifying as a REIT and in restructuring your contracts are there opportunities to layering whether certain terms or conditions that may make that a more friendly opportunity to you guys. Thank you.

Thanks Mike. So I will take the first one on visibility. Clearly, we have a recurring revenue model for those who were on the phone. And recurring revenue models give us great visibility and predictability as we model for, not only a forward looking quarter but a forward looking year. So when we started the year, clearly as the base becomes larger, we get more confidence around the percentage that is in the bag. But it is fair to say, 85% to 90% of our revenues under the churn assumptions that we have, is already contracted and built into the base. And that includes of course the backlog as well. As you can appreciate in Q4, we have sold a lot of business, a lot of booking activities, a lot of that booking will still sit in backlog and then start to be installed in the New Year, and we will recognize the benefit of that. So bottom-line is 85-90% competence level, when we start the year relative to the base. As it relates to contract cycles, we as a company, have tried to move towards a longer contract cycle. It gives us better predictability around our revenue forecasting. As Steve has alluded to greater than approximately 80% of our revenue is in bookings or coming from our installed base. And so, that gives us great benefit as we look forward. So it gives us a great benefit as we look forward. But the other thing is as we look to continue to finance the business, and look at financing specifically on any given project. Having a longer contract with the customer is beneficial and so we think that that is a prudent thing to do, it locks in the capacity for an extended period of time and allows that…

Great. And if I could just follow-up with one other quick question. Can you give us the recurring revenue by segment to compare that against the total revenue that you've already disclosed by segment?

I'm sorry. So when you say the recurring revenue; by segment?

So excluding the non-recurring piece in Asia, US and Europe?

Yeah, what I will tell, we aren't breaking down the guidance, but 95% of our revenue is recurring and that applies across all three regions.

I'm sorry. I meant for the fourth quarter actual numbers. I apologize.

Would you mind if we take that offline, Mike? I don't have that at tip of hand.

Okay. Thank you very much.

Thanks Mike.

Thank you and the next question comes from Greg Mesniaeff with Needham & Company. Greg Mesniaeff - Needham & Company: Yes, thank you. Just a couple of questions. Steve you mentioned in your introductory remarks that given the current economic backdrop, you're increasing the frequency of reviews and watching all the metrics very carefully. I'm just wondering if there are any specific vertical markets that are showing any kinds of unique patterns in terms of renewals or cabinet adds or anything or those types of metrics.

No. Greg, I would say across all four industry verticals that we tend to focus on; network, digital media, financial services and enterprise, there are no particular trends that are emerging from what we've looked at fourth quarter and then early in '08. And so, I think, as I mentioned, as Keith mentioned, there is very, very steady demand. We are tending to shine the headlights on key indicators in a more regular basis, so we can look further out in the quarter we're in from a pipeline standpoint, from a churn, and from any other key trends that the customers might signal. But generally, we're doing the same thing we've been doing in the past. We're just trying to look a little bit further out, just given what's going on in the market today. But no trends are emerging from our pipeline, from our bookings trends, from our churn analysis, really at all that we've seen to-date.

And Greg, this is Margie, just to add, I've just got off the road from three weeks in Europe, Asia and with the US sales guys. And the one thing I will say anecdotally, again, it wouldn't necessarily show up as a trend, but what we are seeing, especially among the enterprise and financial segments, is, we definitely heard from a couple customers that in this economic environment that they are more prone to outsource their co-location needs as supposed to build from a CapEx perspective. So as they look at where they're going to deploy their own capital, outsourcing is becoming more attractive to those segments. So I would say that's actually an upside we're seeing within a few segments, but again, anecdotal at this point. Greg Mesniaeff - Needham & Company: Got you. And then looking at the 8% or so percent churn guidance you've given us for '08, is the change there attributable to any extent to Europe, or would you say that the churn profile in Europe is roughly similar to that of the US?

I would actually tell you that the churn profile in Europe is lower than what we would see in the US or Asia, primarily given the customer segment that they've attracted over the last few years. And again, when we look at churn relative to this year, we're in a certain mid-nine range on a churn basis and we're taking that 8% net for 2008, as more a guidance point than anything else. What I'm really encouraging people to do on the phone is make sure that you assume approximately 2% churn per quarter because that's what we are doing. Clearly, if we don't see the churn or we have the ability to retelegraph that on the next call, we'll do that. But right now it just gives me the comfort that if there is some churn or unexpected churn out there, we've got to capture it in our guidance. Greg Mesniaeff - Needham & Company: Great. Thank you.

Thanks.

The next question comes from Colby Synesael from Merriman. Your line is open.

Great. Thank you for taking my question. If you look at your cash SG&A guidance for the first quarter for '08 relative to the full year, it looks like that's going to actually go down slightly through the full year. I was wondering if you could just explain what's going on there. My second question, it looks like your non-recurring revenue was a little bit higher than we had been anticipating. One was that, within your own guidance internally, and Steve, can you just give us a little bit of an idea in terms of the revenue segments that you do break out for us, where you guys saw the upside that allowed you to beat the guidance this quarter? Thank you.

Kobe, when we look at SG&A and we give the guidance in Q1, you are absolutely right. When you look at Q2 through Q4, that is going to be equivalent or down, relative to Q1. Part of the reason is when you go through Q1 there is a lot, as I call it, the FICA reset, so we have to absorb that in Q1. And so that's one thing that typically decreases our sunsets as we go through the year. But number two, we have some very discreet spending programs in Q1, as it relates to our marketing programs, our branding programs, as it relates to some professional fees. And as a result those are, what I call, unique to the quarter that will not probably repeat themselves with the same level of magnitude in the latter part of the year. And so that's why you are seeing that particular trend. As it related to non-recurring revenue, clearly having the European operations as part of the consolidated business today, they have had some very large customer installations and were benefited from the amortized benefit of those installations into our quarter. And then, the third question you asked was basically what's driving again the over-performance relative to our guidance? I go back to the fact that we had a stronger bookings quarter than we originally anticipated. The book to bill interval continues to remain short, which is great. So it means we're installing the customers sooner than we expected. And we're just seeing great momentum in the business and the price points are firm. And so all three of those key areas are continuing to allow us to hit the high end or above the high end of our guidance range. Clearly, you've seen a step-up in guidance in Q1. We love to continue to beat their guidance every single quarter, but we're trying to guide you to the midpoint to the high end of the range. And with our step-up in guidance we feel we've got a guidance number out there for Q1 and 2008 recognizing there is some conservatism built into it.

Great. Thank you very much

The next question comes from Chris Larsen with Credit Suisse. Your line is open.

Hi. Thanks for taking my question. I realize you've got a very fully financed business plan and the outlook for '08 sounds very, very strong and there are no signs of weakened demand. And it seems silly to ask this question, but the number one concern I keep hearing back from investors is regarding the supply and demand and pricing when you've addressed it as best as you can looking forward. But I guess my question is, if we decided today to take down or slowdown your expansion or stop it or anything, what are you committed to spend and what portion of our CapEx could you say? How much free cash flow would you at that point generate? And then the second thing I would ask you is, I'm trying to find a negative number in the quarter that somebody might, you know, that the bears might climb on. Cabinet net ads were down sequentially, is there anything that we should read into that or is that just the timing of customer installs? Thanks.

I'll start off, Margie, if you've got some clarification on the slowdown scenario. But the first thing, Chris, to remember, you know this model well, is that all these expansions, most of these expansions were doing our phase. So we can, in a worst case, if the indicators tend to tell us to change we can affect the OpEx and CapEx levers pretty quickly on future phases. So we do have flexibility built into how we're building today. And so, obviously, that would immediately start generating a different cash flow perspective. So I think we've looked at internally all the things we would do in a worst case scenario. As Keith alluded to earlier, we're already tightening down some operating expenses today in the first quarter, just as I'm sure most companies are doing today around things like TNE and hiring, etc. But if things were to go to the other direction, we know the levers we could squeeze on and we could turn off some things that aren't necessarily on long lead items. I don't know, Keith, if you've got any quantification on it.

Further to what Steve said, I think when we turn off that spigot on the capital project as Steve's alluded to, and then manage what I call a discretionary spending, I think realistically, we're talking somewhere probably between $100 and $200 million of CapEx alone could be squeezed out of that $340 million CapEx plan. In that range anyway, we said differently, I think our cash balance at the end of '07 is $383.9 million. I'm sure that we could have a cash balance of an equivalent level at the end of 2008 if we had to batten down the hatches.

And then, on net cabinet adds as well, Chris, I'm not sure you've the right number there. But net cabinet adds were up significantly up to 1,500. So I'm not sure what number you were looking at.

Yeah. I must have just done some math wrong. I apologize. I was coming up with 900.

Yeah, it's a tough big. Good news actually.

Yeah. Sorry about that. I was actually coming up with 900, sorry. But it sounds like if you needed to turn this into a free cash flow machine within a quarter or two, if for some reason the world just stopped tomorrow.

Yeah. I think the other thing to think about in this model is we are not naïve enough to know that there is not going to be some slowdown in some decisions from financial institutions and other organizations or delay. But it's mostly going to be on the project side and the application side of their businesses. This is mission critical infrastructure activity in these centers and all conversations, and we kind of validated this through recent surveys, have suggested that there is just no change in the kind of content and infrastructure that they have deployed with us.

All right. Thank you very much and congratulations.

Thanks.

Thanks Chris.

Thank you. Your next question comes from Tom Watts with Cowen and Company.

Hi, good evening.

Hi Tom.

If I did my numbers correctly, it looks like to hit a goal of as today, is 20% of revenues by year end. It requires essentially keeping expenses, cash expenses flat on an absolute dollar basis. Did I do that right, and if so how achievable is that, and where will you kind of reallocate resources?

Yeah Tom. I did respond to that just a couple of questions ago. What we are seeing is there a number of discrete expenses that are occurring in Q1. One of the things I referred to was the FICO reset takes place in Q1, and that's adding somewhere between $1 million and $2 million of expenses in our Q1 cash cost line. In addition, there are some very discrete projects that we are exercising in Q1, which will not repeat during the latter part of the year, at least to the same level of investment. And so, when you actually balance all of this out, we are highly confident that all else being equal we can keep our cash SG&A relatively flat per quarter throughout the year and as a result get to a level, hopefully they will target a level of approximately 20% of revenues.

Okay, and then you addressed this somewhat, but in a number of cases; you are going to longer term contracts, of even three to five years. And are we seeing any escalations in those? And then a parallel question and which you alluded to in your opening statements, is there a chance that you would move to pricing on a power basis, as some of the companies do. And what would the advantages of that be versus the disadvantages?

On the contract front, Tom, in Europe we actually have more examples of longer term contracts because of the enterprise footprint that we have in Europe. But as Keith alluded to, we have incented the sales force to look for longer term contracts where appropriate, where customers are willing to go there. And we are starting to see some an uptick in that. It will be a couple of months before we really have some hard trending data for you. So, we are really comfortable with where we are on contract terms right now and we are not getting any pressure one way or the other to date, on contract terms. Which would be another signal of pressure in the markets. So we are kind of steering that conversation right now, and there are really no trends to report on that front.

And if you moved in that direction, would there be price escalators on an annual basis with the longer term contracts?

Yeah.

Yeah. Already built in today.

That's how we incent, without having those escalators. Our sales reps would not get compensation that is required to get a three to five year contract. So it's built into the expectation.

Okay.

And then your question on power, Tom. The answer is no, we are not considering moving to, I am assuming you are talking about just metered power, in other words what they use costs plus, whatever. We have seen some remodels, but the answer is no. I think as we sell power, it gives customers good guarantee that their power is going to be available when they need it, along with the associated cooling that is required to power some of these high power density sites. So the answer is no. As you know, the one exception about it, as you know we sell little bit differently in Europe, which I won't spent a lot of time on. But in organic businesses of Asia and the US, the answer is no.

And so, the metered power is actually, I think, a pricing based on committed power. Where you actually work through power requirements for customers applications, some of it you might do now, but then your pricing is based on the power drawn, instead of the per square foot?

Well we…

Not drawn, but power committed.

Yeah, we do that in a way today. So if you are buying a new cage from Equinix today. No matter how big the cage is, we'll do a draw [cast]. In other words, the customer is going to buy half a megawatt of power for example. So they are going to pay for half a megawatt of power and they are going to be able to use up to that in their own timeframe. So if that's what you are talking about, yeah we do some of that for our bigger customers today and are moving towards that for on the customer request.

Okay, well thanks and congratulations on the momentum.

Thank you.

Thanks Tom.

The next question comes from Sri Anantha from Oppenheimer. Your line is open.

Yeah good afternoon. I have a couple of questions here. Have you guys seen any change in the competitive environment, especially recently, a lot of telcos talked about the momentum within their collo business and they also talked about expansion. Have you seen any kind of a change in that activity from the telcos, especially the large ones? Second one is, I know you guys talked about pricing being relatively stable, and you guys haven't factored a whole lot of price increases into your guidance. But just looking anecdotally, could you talk about how much the spot price increased in 2007 versus 2006, in other words what was that spot pricing like at the end of 2006, versus at the end of 2007. I think Steve, in your comments, you mentioned like more than 85% of your customers indicated they want to expand. What next? If I am looking at your Analyst Day data that you guys presented. At that time, you talked about only 65%. Could you talk about some of the drivers, why this like more percentage of customers are now planning to do with? The two attributes you talked about was general business expansion and new business application in the survey on your Analyst Day. Clearly those two things are probably going to come under pressure, if we see some pleasure on the macroeconomic front. So if you could talk about what is driving more customers to outsource more data center space to you. Thank you.

Let me start, Margie has got to just exercise on our customer survey data. The first question, there is no change on any telco competitive posture that we are experiencing particularly across any market, and it's different each market as you know in each country. So, no trends that we are seeing that other than the public information that you all are aware, that we see too on the building it’s going on from the likes of AT&T and other. So we see them on certain deals and others we don't. But I wouldn't even begin to tell you there is any kind of trend developing on that front. Pricing stability, I think it's in a 6% range '06 to '07?

Yeah, quarter-over-quarter.

Quarter-over-quarter?

Yeah 6%. Yeah, and then, Sri, what we did was the beginning of the 2007, we actually increased our cabinet pricing just under by roughly 11%. So basically that, if you will, the spot price on the cabinet at least, as we relist price on that cabinet was increased by $100 or 11% in that. And that was in reflection of what we were seeing in the marketplace. And the 6% that Steve alluded to is really Q4 average price point over Q4 of last year and that's the 6% on a blended basis across the entire region.

And I think, Margie, we've been pretty consistent at existing base has been anywhere between 50% and 80% less couple of quarters, we have been running up closer to the 80% growth on existing.

Yes. And just to be clear, Sri, off of the two values that Steve guided in his remarks are actually brand new. We literally just got these results in last week, and it was actually two separate studies. The one we do purely on demand and we split up between our big accounts and our smaller accounts, and then we just completed our major annual customer satisfaction survey, which we get really hard data on exactly the number of cabinets needed on a per market basis throughout the US and Asia. Well, I can tell you from a quantitative kind of analysis perspective, this is really hard data from customers to the point where we can literally pinpoint the number of cabinet opportunity expansions that we are going to see from our customers in current markets. And to your question on what's driving that, its very similar to the reasons we have seen. I think it goes back to something Steve said earlier, is general business expansion from our customers, is cited as mission critical things. So these are not new discretionary projects that we are seeing show up in the IBXs. This is just people running their business. This is investment banking running their business. And so I think as I sit here, I literally have the data in front of me, looking at the reasons as to why people are citing it. It's growth in current markets that are mission critical applications and also moving to new markets. So again, we continue to see a lot of customers who are in one center, either move to a different region or move to a different place in the country. And those were the two top cited reasons. And then coming back to your question on the competitive environment, I think one of the things we have gotten very, very good at, is literally on a city-by-city basis, almost worldwide now, we can tell you how much base is coming on by what competitor in exactly what quarter. So when we start talking about supply, we have a very good deep and disciplined understanding of what supply is coming in and, more importantly, who that supply is targeted to. So what I would tell you in the US, for example, is 76% of the supply coming on Q1 through Q4 of this year is coming from the wholesale REIT. Again, as you guys know, that's not our market. So, a lot of good data and really updated information, so this really isn't information that's five or six months old, that kind of preceded economic environment, this is really fresh data that the customers just provided to us. So, we feel really good about it.

Thanks, guys. Thanks for all the detail and congratulation on a good quarter.

Thank you.

The next question comes from Mark Kelleher from Canaccord Adams. Your line is open.

Thanks. Most of my questions have been asked, but I got a couple of quick ones. Is there a way you can provide a breakout on the vertical segmentation, the four vertical markets you focus on and the percentage of revenue?

Yeah, I can give you a rough breakdown. In the US and Asia, we kind of been bundling that together. Networks been roughly 28%, digital media is around 38%, financial services, digital media/content, financial services around 10% and enterprise around 24% in US and Asia. That's generally directionally correct. In Europe it's a little mixed. In Europe it's around 19% on the network side, about 20% on the content/digital media front, about 36% on financial services, a little heavier there, and their enterprise is about 25%. It hasn't really shifted that much quarter-over-quarter in the last six months.

Okay. Great. And you mentioned DC 4 is filled and DC 5 is coming online. Is there a thought of a DC 6?

Well, I mean, from a DC 6 perspective, as you know, we've got the possibility on the campus to continue to expand to DC 6 as we do with all of our expansions. Once we get to a 50% to 60% booked rate, we'll start looking at the possibilities of doing with that. As you know, that's our flagship market in the world right now, our strongest market in the US arguably one of the strongest markets in the world from a supply perspective, and really it’s just doing very well both on the price side and the demand side. So nothing to announce.

So your CapEx guidance for this year would not include a new facility in DC

That's correct.

Okay. Great. That's all I have. Congratulations, great quarter

Thank you, Mark.

Thank you. And today's final question comes from Jonathan Schildkraut with Jefferies. Your line is open.

Thank you for taking the questions, squeezing me in. Steve, in your prepared remarks you mentioned that video was an important driver for demand. Is there anyway you can give us some statistics around how much video or maybe how much traffic is going through? I think in the past maybe, Margie, has talked about the amount of traffic that gets put over you Ethernet switches, maybe if you can give a statistic like that and a little bit of historical perspective around it?

Yeah. Margie, you may have to help me on the statistics on this. But we are definitely seeing video distribution over IP as a trend that is in its early stages, but a trend that's going to continue to come out. So I think if anybody tracked the macro in the CES, Computer Electronic Show, results you'll see that this is almost at the height of every presentation, every key thing. So we're started to dig in to get in behind this. We were kind of looking at this space similar to the way we built up the FX model. So yes, I think there is going to be lots of opportunity here. We're seeing the early stages of it now. I don't know, Margie, do you have some data.

Yeah. Jonathan, if you just kind of look at year-over-year, as you know video traffic goes over two different interconnect products in Equinix. First, is the private cross connects, between a YouTube and an AT&T, for example, that they would exchange traffic privately. What we do have good steps on is what we see publicly, right, so over to the Equinix Exchange products. So if you look at year-over-year traffic is up about 90%. It's approaching right around 200 gigs now. So that's a fairly significant amount of traffic. Again, video drives a disproportionate amount of that. So as we continue to see Netflix rollout and some of the other big names that we've added this year, we'll see that really tick up. And so just in terms of the ports we're selling and the 10 gig upgrades, we're still seeing a significant amount of 10 gig upgrades primarily to video companies. We're really seeing that crank up. But one of the things that we really like to do is really get a true answer to your question because it really requires to look inside cross connects, which today we don't have the ability to do. But just knowing the amount of cross connects and ports that those guys have, it is significantly growing. As a matter of fact, it was one of our two highest growing segments in the last two quarters as it relates to the revenue in that sector. So it's pretty significant.

Great. And that appears to be faster than the rates we are hearing of the overall Internet traffic growth, which were generally estimated at 75% to 80%. So do you think overtime the Ethernet switches or the peering fabric that you have in your data centers will come to encompass a greater percentage of overall Internet transit?

Well, I think there are a couple of things there, right. I mean definitely with the CDNs and Limelight and Akamai and all of these guys, we are the place where video traffic is getting distributed on the Internet today. So you're going to see it not only in public exchange, but as you know, a number of companies just have policies that they would prefer to exchange traffic privately as opposed to publicly. So I think you'll see it on both the cross connect side as well as the exchange side. I think the other thing that you're going to see over the next 12 to 24 months here is a necessary technology upgrade to probably go to a 100 gig switches off the current 10 gig switches, and video is a major driver of that. So that will be another kind of flash point I think we'll see as you continue to see video rollout on the exchange.

All right. Great. A question on Europe. You were talking about trying to change the pricing mechanism there to make interconnect more of a product. We've also spoken to a couple of the other European providers. It seems like in order to effectuate that type of change more than just Equinix making an adjustment would be necessary, are you seeing the other providers make an effort to productize cross connects as well?

Well, I think what we've heard is other providers would welcome the change. Let me leave it at that. I think probably goes without saying. But I think just in general our strategy is to not just increase the product on existing prices, but really put some operational reliability and some differentiation into our cross connects which would make it, I think, more readily adaptable to kind of customers expectations as well.

Great. Just one final question. Is the company considering any anchor tenants or are there any anchor tenants lined up for the new data centers builds that you are currently undergoing?

Well, there is a pipeline established and we'll make that decision as we get closer. So there are large deals, small deals, medium size deals in the pipeline today. But as we get closer to open date, we'll kind of make that decision collectively whether or not we want to go with the big anchor, whether we go with a couple of smaller ones, like the decision we made in Chicago.

All right. Great. Thank you again.

Thanks, Jonathan.

Thanks Jonathan.

Thank you very much. This concludes our conference call today. Thanks for joining us.