Digital transformation promises a new level of flexibility and efficiency that will ultimately translate into more satisfied customers and increased business growth. However, to tap into this new value, your digital business needs to be ready to support real-time interactions and data exchange. This requires direct and secure interconnection of people, things, locations, clouds and data.[i] Forrester states that “Interconnection, which enables enterprises to move out of owned islands of data and into interconnected hubs of third-party services located at the ‘edge,’ or at close physical proximity to the users of these services, is quickly becoming table stakes to achieving digital transformation.”[ii]
To help companies demonstrate and realize the tangible value of interconnection-driven IT initiatives, Forrester created the Total Economic Impact™ (TEI) methodology. “The Total Economic Impact™ of Equinix,” a commissioned study conducted by Forrester Consulting on behalf of Equinix, published in April 2019, provides companies with the framework to evaluate the potential cost savings and business benefits enabled by deploying interconnection with Equinix.
To create the TEI framework and return on investment (ROI) analysis, Forrester interviewed four Equinix customers in the following industries: manufacturing, travel, financial services and professional services. From those interviews, Forrester created an aggregate, composite organization to illustrate the financial impact of using Equinix Performance Hub™ and Equinix Cloud Exchange Fabric™ (ECX Fabric™) for interconnection on Platform Equinix®. The study outlines the latency and connectivity benefits these companies achieved by leveraging proven industry best practices of an Interconnection Oriented Architecture (IOA™) on Platform Equinix to implement network optimization, hybrid multicloud, distributed data and distributed security. IOA is a repeatable architectural framework to directly and securely connect all the components of a business’s digital supply chain in markets around the world.
Findings: Equinix interconnection drives significant ROI
Forrester’s customer interviews revealed that investing in Equinix interconnection provides companies with greater network optimization, increased end user productivity, faster compliance and enhanced visibility. Representing the experience of the composite organization based on the companies interviewed, the Forrester study showed aggregated financial analysis and risk-adjusted benefits including:
- 328% risk-adjusted, projected ROI over three years, 68% of which was generated by greater network optimization.
- A minimum 30% reduction in latency, enabling increased worker productivity.
- 60% faster time to complete information security and technology audits.
Additional benefits of Equinix interconnection included: faster adoption of services, improved planning and budgeting, and a greater user experience.
Uncovering top customer interconnection challenges
The composite organization, which Forrester built based on their customer interviews, had the following characteristics:
- 1,000 branch locations worldwide, offering multiple B2B and B2C services.
- $7 billion (B) in annual revenue and 15,000 total employees — 8,000 of whom are impacted by increased network bandwidth through Equinix.
- Use of six Equinix Performance Hubs and ECX Fabric for interconnectivity to NSPs, CSPs, ISPs and other service providers.
- Prior to coming to Equinix, the composite organization used a legacy MPLS network via a single telecommunications provider to connect offices, end users and customers. As the number of devices, users and customers grew, so did the cost of maintaining that infrastructure.
In the interviews, the customers revealed a series of challenges that were motivating them to find a more efficient and cost-effective way to interconnect users, data, and service providers.
- Single carrier lock-in, characterized by expensive, inflexible, long-term contracts offering suboptimal bandwidth performance, and data or services that were only available in locations where the carrier had a presence.
- Centralized data infrastructures with legacy MPLS networks, which required them to backhaul data from ISPs and other service providers to their core data centers before reaching their end users, resulting in under-performing network speeds, increasing administrative and security overhead, and rising costs.
- Delayed digital transformation, which was impeded by slow or expensive access to service providers due to bandwidth constraints or slow provisioning times.
- Lower user productivity and digital adoption, which was hampered by bandwidth constraints and high latency that ultimately translated into slower, less reliable application performance and the inability to adopt new services.
The TEI study details the benefits, costs, flexibility and risks associated with the investment in Equinix to overcome these challenges.
Learn how Equinix customers are using interconnection to accelerate their digital transformation and realize amazing returns. Read The Total Economic Impact™ of Equinix.