As digital disruption becomes more pervasive, organizations must keep pace with new technologies and business models to survive. To remain viable to customers, companies are doing all they can to deliver an optimal user experience—one that maintains interactions that are immediate and eminently convenient, engages the user and encourages further encounters with the brand. To achieve this desired state that is fast becoming a must-have in the digital economy, companies must interweave business processes, not just internally, but also externally with partners and customers. The result is a transformation of the value chain from strong vertical integration and ownership to opportunistic arrangements that transcend geographies and time zones. Businesses that can leverage these emerging digital ecosystems will thrive. If they do it right, they also benefit from entirely new and dynamic business models via direct and secure B2B interconnection.
The B2B interconnection challenge
Meeting user experience expectations is becoming more difficult. As these expectations continue to rise, the drivers of the digital economy throw a variety of wrenches into the works. Increasing numbers of users, devices, locations and data paired with the demand for real-time engagement and execution is now required for success. This level of digital performance requires B2B connections among partners, customers and supporting cloud services.
Such connections have generally been made over the public internet or via corporate MPLS networks. There are several problems with this approach, not least of which is security risk. In addition, backhauling relevant data exchanges to centralized data centers via networks that are inherently slow and congested is expensive. Also, it takes too long to provision connections among multiple people, locations, clouds and data. More critical, however, is the fact that simply adding connections to multiple parties just doesn’t scale. In order for business ecosystems to flourish, they need to be interconnected—that is, connected in proximity in a way that forms dense marketplaces in strategic geographic locations. It’s this proximity that permits direct connections to counterparties that bypass the public internet altogether.
Meet me at the digital edge
In our blog article, “Networking at the Edge,” we discuss the advantages of moving relevant digital business and IT functions from a centralized, core enterprise network to secure, distributed edge nodes that act as interconnection hubs at the digital edge, where commerce, population centers and digital ecosystems meet. This can be accomplished by leveraging an Interconnection Oriented Architecture™ (IOA™) strategy that provides a proven and repeatable framework for shifting the fundamental IT delivery architecture from siloed and centralized to interconnected and distributed. In addition to greater B2B security, an enterprise adopting this strategy can support bi- and multi-directional data flows among partners, suppliers and consumers across a new, varying value chain, leveraging interconnected ecosystems to rapidly grow business.
The Equinix Performance Hub, Cloud Exchange and Data Hub provide the components within a digital edge node needed to securely interconnect to businesses within a digital ecosystem, via one-to-many, direct and secure, virtualized connections to cloud and SaaS services at the digital edge. Enterprises can choose a “meet me at Equinix” approach to locally and cost-effectively interconnect and scale digital business capabilities.
Once an organization begins to move key parts of its IT infrastructure to strategic, geographically located edge nodes at its digital edge, it can securely interconnect with other players in its digital ecosystem using software-defined networking (SDN) and network function virtualization (NFV) capabilities (via a provider) to create many-to-many connections based upon service and response requirements.
When looking to connect business ecosystems, the diagram below illustrates a scalable model using fast, agile provisioning:
Connecting to Digital Ecosystems
Follow these steps to interconnect to partners/customers within your digital ecosystem:
- Harness an edge node as a “meet-me” center for interconnecting digital businesses. Choose digital edge node locations that are geographically beneficial for you and your partners/customers.
- Implement a cross connect between your edge nodes and those of your partner/customer within the same location for fast, secure and low-cost interconnection.
- As business ecosystems evolve, leverage SDN and NFV capabilities to facilitate many-to-many virtualized connections via an exchange such as the Equinix Cloud Exchange even more effectively, and at finer granularity, than a dedicated cross connect can provide.
The benefits of direct and secure interconnection to digital business ecosystems are as endless as the possibilities it enables. They include:
- Accelerating time-to-productivity and reducing cost: Provisioning dedicated high-speed cross connects among ecosystem players is a much quicker and easier process than provisioning MPLS network connections. You benefit not only from interconnections with LAN-like speeds and nearly unlimited bandwidth, but also from significantly lower latency. This also greatly reduces cost from a traditional MPLS connection model.
- Leveraging cloud velocity: Harnessing more flexible, scalable and cost-effective SDN or NFV capabilities within a digital edge node for many-to-many, programmable connections to partners/customers, clouds, applications and data enables the ecosystem to expand as needed to match changing user needs and demands.
- Expanding your business: By removing barriers to expanding access and interconnection to partners/customers at the digital edge, you can recognize and seize business opportunities that were not previously possible or even discernible. Do this in any or all of the global metros and markets where you and your business partners have an edge presence.
- Greater B2B security: Greater security and compliance measures can be applied at local digital edge nodes at network, application and data levels, if there is a foundation for private interconnection between and among partners. This enables control and visibility over all activities—essential attributes of a pervasive security fabric that ensures privacy and compliance.
Digital ecosystems create new models for greater digital business opportunities and gravity
As we’ve seen, interconnection offers the agility, performance and security needed for digital business. But perhaps even more profound are the rich ecosystems it spawns. These ecosystems lower barriers to entry for new market enablement and amplify benefits and business capabilities for partners and customers in what amounts to a virtuous feedback loop. For example, as financial services exchanges achieve ever-higher-speed digital business transactions and scale, with ultra-low latency and less cost, more financial services companies join the ecosystem to innovate and create new solutions, attracting more customers, and so on.
We also see this kind of gravity underway among cloud providers and other industry ecosystems (e.g., healthcare, media and entertainment, online advertising). ContentBridge is a good example. The media supply chain company needed an interconnection partner that would allow them to interconnect to all of the major cloud service providers. By choosing Equinix, the company instantly achieved seamless access to thousands of CSPs and NSPs, billions of endpoints and leading cloud providers like Azure. Global colocation and multicloud and network interconnectivity ultimately enabled ContentBridge to deliver far greater performance and scalability to its customers, at a lower cost.
The increasing choice of partners within digital ecosystems means players can change partners at will, leverage multiple partners for scaling or enable disaster recovery scenarios. Also, in an increasingly collaborative economy, greater interconnection empowers customers to do more than just consume content, it also enables them to produce and distribute content. This is clearly evidenced by other platform companies that leverage ecosystems, such as the Ubers and Airbnbs of the world.
By reading the IOA Playbook and deploying the associated network design patterns for greater interconnection to digital business ecosystems, you’ll reap the rewards of the network effects that drive profound opportunity and growth.
Check out our other blogs in the IOA Blueprint series: