Asia-Pacific Digital Business Transformation Gets a Boost From Private Interconnection

This year, the International Monetary Fund called the Asia-Pacific (AP) region “the most dynamic of the global economy,” and for good reason. AP growth has been fueled by the burgeoning economy and its global appeal. Hong Kong has become a true gateway to China’s massive markets, backed by strong support from the People’s Republic China government. Singapore has dramatically grown its economy and has been consistently ranked in the top 5 of the annual Global Financial Center’s index in recent years. Australia has been pretty recession-proof for the last two decades, sustaining robust economic growth with strong exports for natural resources and services.

As a hotbed for both established and start-up companies and developed and emerging markets, AP companies of all sizes in all industries are embracing the digital revolution. The AP market is enormous and businesses are seeing huge potential in digital solving for IT complexity caused by the heterogeneity of regulations, technology adoption and cultures, as well as their scalability issues. Urbanization is also a major microtrend worldwide that is driving digital business, and with 50% of the 50 mega cities being based in AP, numerous physical and digital services will need to be delivered to these growing population centers.

To succeed as a digital business, companies are adopting private Interconnection at accelerated rates to build an underlying digital-ready infrastructure. The Global Interconnection Index (the GXI) Volume 2, a market study recently published by Equinix, analyzes global Interconnection-the direct and private traffic exchange between businesses. The GXI projects that AP businesses will further scale and expand their digital transformation by harnessing Interconnection Bandwidth-the total capacity provisioned to privately and directly exchange traffic with a diverse set of participants at distributed IT exchange points.

Interconnection Bandwidth volume growth in Asia-Pacific

By 2021, the GXI predicts installed Interconnection Bandwidth capacity will grow in the AP region to 2,220+ Terabits per second (Tbps), second to the Interconnection volume expected in the U.S. Asia-Pacific is expected to realize a 51% compound annual growth rate (CAGR) in Interconnection Bandwidth between 2017 and 2021, contributing more than 27% of the global capacity.

With over 50% of the world’s population residing in the AP region, it is not surprising that it’s a high-growth market for private Interconnection. The GXI projects increasing Interconnection Bandwidth volume and growth rates in four major metros throughout the region: Sydney, Singapore, Hong Kong and Tokyo (see diagram below). The catalysts behind this accelerated growth differs by metro. Sydney is going through an economic boom, where it is estimated that its digital transformation could contribute $45 billion to Australia’s GDP by 2021. Singapore is one of the most robust data center markets in Asia-Pacific due to its strong network infrastructure, expanding cloud hyperscaler presence (Google, Facebook, etc.), diverse connectivity to major markets in the region, conducive and business-friendly environment, as well as political stability. With companies in Hong Kong rapidly embracing the multiple opportunities offered by the digital economy, the requirement for Interconnection Bandwidth capacity is the fastest growing in the region. In Tokyo, the increasing need for enterprises to access to internet and networked services is driving the demand for the largest volume of Interconnection Bandwidth in the region.

Interconnection Bandwidth in Asia-Pacific

*Compound Annual Growth Rate

Interconnection between AP enterprises and digital ecosystem counterparties

Enterprises need proximate Interconnection to Network Providers so they can connect their distributed locations and deliver applications to users with the lowest latency and highest performance. However, in terms of the fastest Interconnection Bandwidth capacity growth, Enterprises connecting to Cloud & IT Providers is growing at a CAGR of 99% as cloud adoption accelerates around the region (see chart below).

Asia-Pacific Interconnection Bandwidth by Ecosystem

Interconnection by vertical industry

The Enterprise vertical in AP is expected to account for 52% of the total installed Interconnection Bandwidth capacity in 2021 and grow annually at a robust 66%. As the Energy & Utility sector continues to expand in the region, it is expected to be the fastest growing segment with Interconnection Bandwidth volume increasing nearly 11 times over a four-year period to 154 Tbps by 2021. This sector is followed by Banking & Insurance and Healthcare & Life Sciences as the fastest growing verticals in AP.

In response to strong demand for cloud services in the region, the Cloud & IT Services vertical is expanding and requiring Interconnection to their platforms, resulting in this sector having the most Interconnection Bandwidth (501 Tbps) in AP by 2021. This meets the need for enterprises to optimize performance, scalability and compliance, in addition to helping them become more agile. The same is true for Network Providers who are expected to leverage private Interconnection to deliver secure and seamless connectivity services for the huge populations across AP demanding greater bandwidth capacity (see chart below).

Asia-Pacific Interconnection Bandwidth by Industry Segment

AP enterprises leveraging Interconnection for digital business integration

Throughout the 40 Equinix International Business Exchange™ (IBX®) data centers in Asia-Pacific, we’ve seen thousands of companies in all industries leverage Interconnection to expand and scale as digital businesses in the region and throughout the world. Here are some examples of companies in AP that have harnessed the power of Interconnection to accelerate their digital journey:

  • Carsales, Australia’s largest online automotive, motorcycle and marine classifieds business, leverages Platform Equinix® and Telstra Programmable Network to optimize its applications across its global business and deliver an agile and consistent customer experience. The company deployed its application optimization strategy in the Equinix IBX data center in Melbourne and leveraged multicloud interconnectivity via Equinix Cloud Exchange Fabric™ (ECX Fabric™). By doing so, it gained access to a dense ecosystem of cloud, internet and SaaS providers to distribute its IT offerings across all regions and drive greater economy of scale and user experience. Carsales also achieved better visibility into business operations across consolidated technology systems and directly interconnected its systems, cloud service providers (CSPs) and customers to enhance performance, increase reliability and reduce costs.
  • PickMe, the leading on-demand transportation service in Sri Lanka, leverages Iguazio’s Continuous Data Platform and Interconnection services from Equinix to maximize data and operational efficiencies, launch more services and improve user experience. PickMe was processing an increasing volume of data from multiple sources due to a growing customer base and needed a partner that offered enhanced performance and security and the ability to leverage its data to optimize business processes in real time so it could deliver a high-quality user experience. Equinix partner Iguazio provided PickMe with its Continuous Data Platform, which processes vast amounts of real-time data from multiple sources via a secure, scalable interconnected service. Deployed on Platform Equinix®, Iguazio’s analytics and data platform delivers intelligent insights for PickMe, using AI to detect and reduce fraud, as well as algorithms to detect cancellation patterns among specific drivers. Real-time supply and demand heatmaps also enhanced driver decision-making processes for maximum driver benefits and minimum passenger wait times. As a result, PickMe workloads have been consolidated, empowering analysts with greater insights and the capacity to spend valuable time on enhancing the ride-hailing application.
  • TheWing On Group of Department Stores is one of the oldest retailers in Hong Kong, serving the city for over 110 years. The company needed to drive the distribution of IT services and controls closer to employees, customers, partners, and network and cloud ecosystems at the digital edge. Wing On moved its business-critical data and applications (e.g., Enterprise Resource Planning, Point of Sales) to Platform Equinix and leveraged the ECX Fabric to interconnect to major CSPs. This enabled Wing On to migrate its workloads to specific CSPs to meet performance, cost and capability requirements, improving the user experience and opening the door to quick integration of new features such as disaster recovery, analytics and the Internet of Things.

Today, Equinix has 40 IBX data centers in Asia-Pacific. With the recent rollout of global ECX Fabric inter-metro connectivity across Asia-Pacific, businesses throughout the region can accelerate and scale their digital business integration in AP and around the world.

To get more details on Interconnection growth worldwide, check out the Global Interconnection Index Volume 2.



You may also want to read:
What Is the US Interconnection Story

What We’ve Learned About Interconnection Over the Last Year

What’s Driving the Rapid Growth of Interconnection?

Interconnection Is at the Center of Ecosystem Growth

Can Interconnection Transform Your Digital Business?