REDWOOD CITY, Calif.,
Oct. 13, 2020 /PRNewswire/
-- The latest Global Interconnection Index (GXI), an
annual market study published by Equinix, shows that the COVID-19
pandemic has already had a dramatic effect on how businesses are
planning their digital infrastructure initiatives over the next
three years. According to the report, digital service providers,
within industries like telecommunications, cloud & IT services,
content & digital media and technology providers, are forecast
to increase private connectivity bandwidth 5x by 2023, driven by
greater demands from enterprises to close digital gaps at the
edge.
"As interconnected services, cloud providers, distributed cloud,
edge services and SaaS offerings continue to proliferate, the
rationale to stay only in a traditional data center topology will
have limited advantages. This is not an overnight shift, but an
evolutionary change in thinking how we deliver services to our
customers and to the business. This trend, coupled with the new
reality that outside factors might limit physical access to the
data center (such as emergency quarantine), is driving new thinking
in infrastructure planning," wrote David
Cappuccio, Distinguished VP Analyst, Gartner and Henrique Cecci, Senior Director
Analyst, Gartner.1
The report also forecasts that overall interconnection
bandwidth, the measure of private connectivity for the transfer of
data between organizations, will achieve a 45% compound annual
growth rate (CAGR) from 2019 to 2023. The expected growth is driven
by digital transformation, and specifically by greater demands from
enterprises extending their digital infrastructure from centralized
locations to distributed edge locations. This comes as businesses
scale and support real-time interactions by strategically
interconnecting workflows closer to and across people, things,
locations, cloud and data. The capacity of this connectivity is
equivalent to 64 zettabytes of data exchange, which is enough
bandwidth for every human on the planet (7.8 billion) to transmit
their full DNA sequence in an hour.
"Digital leaders have to prepare for post-pandemic recovery by
planning and implementing the right digital transformation
initiatives now," said Claire
Macland, Senior Vice President of Marketing, Equinix. "We
believe those that have a foundational infrastructure which helps
bring together all the right places, partners and possibilities
will gain a business advantage over the long term."
The GXI Vol. 4 delivers insights by tracking, measuring and
forecasting growth in interconnection bandwidth—the total capacity
provisioned to privately and directly exchange traffic, with a
diverse set of partners and providers, at distributed IT exchange
points inside carrier-neutral colocation data centers.
Vertical/Industry Insights:
The GXI Vol.4 provides
insight on how global macro trends and COVID-19 have impacted
certain industry segments:
- Digital adoption patterns are changing in response to
massive disruptions
-
- According to the GXI Vol.4, the digital adoption pattern has
altered, with service providers now forecast to provision more
interconnection bandwidth (10,284 Terabits per second (Tbps) by
2023) than enterprises, by a factor of nearly 2x.
- However, much of this service provider demand is anticipated to
be in support of enterprises that are prioritizing their digital
transformation in preparation for post-pandemic recovery.
- The report also predicts that enterprises with a digital
infrastructure will extend their competitive advantage and continue
to lead in business growth, while those without have struggled and
are dependent on service providers to transform their business
models.
- Traditional businesses are moving workloads to an edge-first
architecture
-
- The GXI Vol.4 predicts that traditional business, within
industries like banking & insurance, manufacturing and business
& professional services, will represent a combined 30% of
global interconnection bandwidth by 2023. This is led by the
growing need to move workloads to the digital edge while scaling
core IT infrastructure. By 2023, these traditional businesses are
expected to reach a peak interconnection bandwidth growth rate of
50% annually.
- Healthcare & life sciences and government & education
are expected to lead the traditional enterprises in their
interconnection growth rate as public and private initiatives on
artificial intelligence (AI) and machine learning (ML) are
forecasted to drive a combined 47% CAGR in interconnection
bandwidth from 2019 to 2023.
- Organizations are benefiting from the "network
effect"
-
- Organizations are maximizing their digital advantage by
building a presence in locations with the most users, largest
number of providers and the densest activities, known as the
"network effect." According to IDC, 80% of digital leaders will see
the impact of connecting to multiple ecosystems, including
improving their value to end customers by 2025.2
- The need for application exchange in digital ecosystems to
support real-time engagement is essential and creates a network
effect for businesses. The GXI Vol.4 predicts that connectivity
from service providers to networks and cloud & IT service
providers will be the two main sources of ecosystem
interconnection, with an estimated 49% combined CAGR from 2019 to
2023.
Regional Insights:
The GXI provides insight into how
growth in interconnection bandwidth is expected to accelerate in
different regions of the world between 2019 and 2023:
- Global interconnection bandwidth is forecast to grow by
45% CAGR. By 2023, global installed interconnection bandwidth is
expected to reach 16,300+ Tbps.
- North America is
expected to grow at a 43% CAGR, with service providers leading the
growth, showing over a 4x increase in interconnection bandwidth.
The top metros for private connectivity growth in the region are
forecasted to be Silicon Valley,
Washington D.C., Chicago
and New York.
- Europe is forecast to
grow at a 45% CAGR, where telecommunications and cloud & IT
providers are to contribute to 55% of the total interconnection
bandwidth growth, outpacing other industries in the region.
Frankfurt, Amsterdam, Paris and London are predicted to be the top metros for
interconnection bandwidth growth.
- Asia-Pacific is
expected to grow at a 47% CAGR. Cloud & IT Services are to lead
the growth in this region, reaching an anticipated 1,374 Tbps by
2023, which is 29% more than the next largest region, North America, in this sector. The GXI Vol.4
anticipates healthcare & life sciences and government &
education to see an acceleration in interconnection bandwidth
adoption as both industries prioritize digital initiatives such as
telehealth and AI. The leading metros for private connectivity
within the region are expected to be Singapore, Sydney, Tokyo, Shanghai and Hong
Kong.
- Latin America is
predicted to grow at a 50% CAGR. Content and digital media is
expected to grow at a 5-year CAGR of 62% between 2019 and 2023,
making it the highest growth rate of any sector in any region.
Buenos Aires, Mexico City, Rio de
Janeiro and Sao Paulo are
expected to be the top metros in this region for interconnection
bandwidth growth.
Industry Perspective on the Global Interconnection
Index
- Debika Bhattacharya,
VP-Global Solutions, Verizon Business
"With the pandemic
creating a sudden global shift to remote and work-from-home
practices, our customers have a renewed appreciation of the need
for reliable networking solutions. Prioritizing digital
transformations and cloud connectivity is imperative. Our top
priority is to provide customers with differentiated solutions to
drive business agility so they can achieve their goals and mitigate
risks."
Additional Resources
- Global Interconnection Index Volume 4 [report]
- GXI V4 Blog [blog]
- Your Data Center May Not Be Dead, but It's Morphing [Gartner
report]
- Total Economic Impact Study (TEI) [Forrester report]
- Future of Digital Infrastructure—Ever Faster Delivery of
Reliable Digital Services and Experiences [IDC report]
About the Global Interconnection Index (GXI)
The
Global Interconnection Index, published annually by Equinix,
delivers insights that drive digital business advantage by
tracking, measuring and forecasting growth in interconnection
bandwidth—the total capacity provisioned to privately and directly
exchange traffic with a diverse set of counterparties and providers
at distributed IT exchange points. The Global Interconnection Index
is the industry's only market study that projects how
interconnection bandwidth growth will unfold through 2023. The
report serves as a market baseline that analyzes the deployment
profile of thousands of ecosystem participants using
carrier-neutral colocation data center providers globally. This
data was combined with local and regional market data (including
macroeconomic trends, market demographics and industry
concentrations) to form a weighted demand multiplier to assist in
predicting growth and assess impact on digital business
transformation. A detailed methodology description is included in
the Global Interconnection Index.
About Equinix
Equinix (Nasdaq: EQIX) is the
world's digital infrastructure company, enabling digital leaders to
harness a trusted platform to bring together and interconnect the
foundational infrastructure that powers their success. Equinix
enables today's businesses to access all the right places, partners
and possibilities they need to accelerate advantage. With Equinix,
they can scale with agility, speed the launch of digital services,
deliver world-class experiences and multiply their value.
Forward Looking Statements
This press release
contains forward-looking statements that involve risks and
uncertainties, including statements about interconnection bandwidth
growth, the rate of adoption of digital transformation, and the
benefits of the "network effect". Actual results may differ
materially from expectations discussed in such forward-looking
statements and the predictions made from the Global Interconnection
Index. Factors that might cause such differences include risks
described from time to time in Equinix filings with the Securities
and Exchange Commission. In particular, see recent Equinix
quarterly and annual reports filed with the Securities and Exchange
Commission, copies of which are available upon request from
Equinix. Equinix does not assume any obligation to update the
forward-looking information contained in this press
release.
1 "Your Data Center May Not Be Dead, but It's
Morphing," Gartner, September 17,
2020
2 "IDC FutureScape Webcast: Worldwide Digital
Transformation 2020 Predictions," IDC, Doc # US46287720,
May 2020
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SOURCE Equinix, Inc.