Government and Education Poised for Dramatic Interconnection Growth

The Global Interconnection Index predicts a 66% CAGR in private Interconnection as the public sector mandates greater digital integration and cybersecurity

The second annual Global Interconnection Index (the GXI), published by Equinix, is now available with its updated analysis and forecast of global private traffic exchange. Over the next five years, the GXI projects significant growth in Interconnection – the direct private traffic exchange between businesses – thanks to continuously evolving trends in digital business transformation, urbanization, data security and compliance, and interactions with critical business ecosystems. By 2021, the GXI estimates that installed Interconnection Bandwidth capacity worldwide could reach 8,200+ Terabits per second (Tbps), a five-fold increase from last year’s forecast, with double digital growth across all industries.

Interconnection Bandwidth reflects the total capacity provisioned to privately and directly exchange traffic with a diverse set of participants at distributed IT exchange points. The Public Sector, which includes state, local and federal government and education agencies, may not be the first market sector that comes to mind when you think of accelerated digital transformation. However, the GXI projects huge Interconnection gains across those sub-industries ꟷ an estimated 66% compound annual growth rate (CAGR) between 2017 and 2021.

Government and education organizations around the world face numerous evolving industry and government regulatory trends. Many of the resulting challenges from these trends are described by Forbes contributor, David Newman, (“Top 6 Digital Trends in Government” and “Top 6 Digital Trends in Education”) and the Enabling an Interconnected Government white paper, published by Equinix.

These include:

  • The adoption of digital transformation initiatives, such as IoT sensor data analytics, artificial intelligence, blockchain, quantum computing, digital portals and mobile applications, aimed at improving citizen’s lives, streamlining inefficient processes and enhancing access to government information.
  • Federal and state mandates to improve the efficiency and effectiveness of an aging, often obsolete infrastructure. These include directives to consolidate data centers, adopt a cloud-first strategy, and a deploy shared IT services aimed at breaking down infrastructure and service silos and slashing IT expenses.
  • Cybersecurity initiatives, in the face of numerous highly publicized data breaches, have forced new and evolving data privacy and protection compliance requirements at all levels of government: local, state, country and international.
  • IT modernization initiatives to overhaul decades-old, slow network architectures that are constrained, complex and siloed with more agile, smarter mobile- and hybrid and multicloud-enabled technologies. A commander we spoke with recently compared his organization’s network to a “big bowl of spaghetti.”
  • Glaring inefficiencies in governments’ collection, integration and analysis of data for digital transformation functions that are often very time sensitive, sometimes requiring real-time performance.

All of these trends and challenges benefit from the real-time performance, security, scale and global reach that direct and secure Interconnection, particularly at the edge.

Cloud Initiatives

In 2011, the “Federal Cloud Computing Strategy” set the wheels in motion for increasing operational efficiency by mandating a “Cloud-First”  policy, an initiative that spread worldwide over to the United Kingdom. Under the current U.S. Administration, this policy has morphed into being “Cloud Smart” as cloud computing has matured and there is a greater focus on IT modernization that also includes tighter cybersecurity policies. This new initiative requires agencies to “prioritize migration planning, sustainment, and organizational maturity in order to realize the full benefit of these services.”

Government agencies have increasingly turned to hybrid and multicloud infrastructures, software-defined and API-based Interconnection platforms, and distributed security at the edge. This enables them to free up critical network bandwidth capacity and jump-start, scale, secure and deliver new services and capabilities in more advanced ways than their often outdated infrastructure. The shift started slowly but is reaching a tipping point as initial projects show significant success. Bloomberg Government found that annual U.S. Federal agency expenditures on cloud computing doubled in the last five years. Deltek GovWin’s recently released annual report on the U.S. Federal cloud computing addressable market saw awarded civilian agency cloud computing contract value rise to almost $2.3 billion in 2017 and estimates an 11.3% annual growth rate by 2022 .

And Gartner sees these trends continuing worldwide and recently projected double-digit growth in governments’ use of public cloud services, with the spending forecast to increase on average 17.1% per year through 2021.

The growth of Interconnection Bandwidth capacity

Based on these trends, it’s not surprising that the GXI sees an above-average growth rate in installed Interconnection Bandwidth capacity in the Government & Education sector, with a CAGR of 66% versus all of the other industries at a combined 48% average CAGR. While they have higher current installed capacity, only three other sectors out of 11 ꟷ Energy & Utility, Healthcare & Life Sciences, Wholesale & Retail — have higher projected Interconnection growth rates than that of the Government & Education sector organizations (refer to the graph below).

Installed Interconnection Bandwidth Capacity by Vertical Industry

When you break down the numbers by global region, they’re just as impressive. Europe is projected to lead the world with the highest total Government & Education global Interconnection Bandwidth capacity of 25 Tbps by 2021, based on a projected 65% CAGR. The U.S. is expected to see a 59% CAGR, totaling 19 Tbps, and the fastest growth at 86% CAGR, is anticipated in Latin America to a total of 2 Tbps. Asia Pacific is the second fastest growing region with a 75% CAGR, amounting to 15 Tbps by 2021.

The GXI report also predicts that the direct Interconnection with Cloud & IT Services will proliferate at a 98% CAGR, as both private and public sector industries leverage hybrid multicloud architectures for digital business scale and agility.

Real-World Examples

Our state government customer success story is a perfect example of how the marriage of cloud and Interconnection helps agencies launch new services fast and securely, while simplifying the complexity and  challenges of moving to the cloud. The state agency needed guidance on moving services to a private IaaS and PaaS cloud in three geographically dispersed metro areas to achieve compliance, maximum performance and bulletproof security. The end goal was to position itself as an IT provider for all of its state, local and educational entities. Equinix Professional Services and Microsoft worked together to design and deploy an optimized, scalable, cost-effective Microsoft ExpressRoute/Azure solution and cloud connectivity strategy using theECX Fabric. The result was a quick, smooth migration; easy connectivity of other agencies to the private cloud; seamless multicloud management through the ECX Fabric customer portal; and a repeatable model and documentation for other agencies to harness across the state.

Similarly, Equinix, the 1901 Group and NetApp helped a large law enforcement agency migrate cost effectively to a hybrid cloud while keeping its highly sensitive data private and compliant with federal regulations via NetApp’s Private Storage for Cloud. The combined hybrid cloud solution met FedRAMP government guidelines for security, monitoring and assessment of cloud products and services and guaranteed the agency was able to maintain control and governance of its data on a fixed budget. The NetApp Storage-as-a-Service solutions sits in a secure cage at an Equinix IBX data center, where it connects directly and securely to multiple colocated hyperscale cloud providers, such as AWS, Microsoft Azure, IBM SoftLayer and Google Cloud. Currently, the agency takes advantage of a low-latency, high-performance infrastructure and disaster recovery on a per terabyte basis that avoids large capital costs.

Leveraging Interconnection Oriented Architecture best practices

By harnessing the best practices of an Interconnection Oriented Architecture® (IOA®) that places metro-based Interconnection control points at the edge, close to users, networks, clouds and partner ecosystems, government agencies and educational institutions can interconnect and scale on a pay-as-you-go basis. They can also achieve an open, secure, data-driven IT platform that launches and expands new services fast, particularly at the edge, such as hybrid and multicloud infrastructures. In turn, network and cloud providers enable these capabilities by moving their infrastructure to the same edge control points where they can interconnect directly and securely with their public sector customers and citizens.

One-to-many dedicated virtual connections with cloud, network and SaaS providers and other business ecosystem partners through a single physical port on Equinix Cloud Exchange Fabric™ (ECX Fabric™) achieve a level of performance, security, management and simplified network topology that multiple public internet connections simply cannot match, for less cost. The same platform also helps facilitate shared services—another major government initiative. In addition, remote access to cloud platforms that are not inside the same data center where an agency resides can be easily accessed from geographically distributed Equinix IBX data centers, as if they were local, via the interconnected ECX Fabric.

Download the Global Interconnection Index for more information on Interconnection trends by region vertical markets and vital ecosystem partners.

You may also want to check out the:

Equinix Interconnected Government white paperand the IOA Federal Government Blueprint to learn about real-world Interconnection best practices for public sector organizations.

 

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