Accelerating Interconnection in the Country of Innovation: Japan

Why our largest IBX in Tokyo, Japan, will help support cloud growth and digitization

As the third-largest economy in the world, Japan1 has long been famed as being at the forefront of innovation and technology. Tokyo topped a list of the world’s Innovation Cities Index2—one of just three Asian cities to be featured in the rankings—and with the next Summer Olympics set to take place in the city, more and more people are looking to Japan to pave the way in connected experiences for both visitors and participants.

At Equinix, we’ve always been dedicated to providing premium interconnection and data center services to support the country’s thriving economy and digital transformation. Since entering the market in 2002, we’ve invested extensively in growing our footprint through both organic expansions and the acquisition of Bit-isle in 2015, which made us one of the market leaders in the country.

Today, we have a total of 13 International Business Exchange™ (IBX®) data centers in Japan, two in Osaka and 11 in Tokyo, including the newly announced TY11 in Tokyo, which is also our largest to date in Japan. So, what has made Japan such an attractive and important market to us?

Ever-increasing demand for data centers and interconnection

According to Synergy Research Group,3 Tokyo was the world’s largest retail colocation market in terms of revenue in the first quarter of 2019. A recent London School of Economics report4 also highlights that Japan has the lowest level of restrictiveness when it comes to data usage, resulting in greater investments in data processing and application development that has created a demand for high-quality and highly connected data centers.

As Japan’s large economy continues to grow, driven by capital investments and international trade, the government is increasingly focused on building out its digital economy. Tokyo is expected to see the second-highest interconnection bandwidth growth in Asia-Pacific, growing at 53% CAGR, according to the second annual Global Interconnection Index. Greater connection speeds will lead to more usage of internet services, and this extraordinary growth will continue to drive demand for data centers and even greater interconnection as companies expand their services and data usage.

Rising cloud adoption and CSPs

While the usage of cloud throughout the world has seen exponential growth over recent years, Japan is fast carving out a name for itself as a leader in cloud. Currently, it is ranked fourth in terms of cloud readiness in Asia-Pacific5 and, as more and more cloud service providers (CSP) enter the market, usage of cloud has increased, resulting in the recent prediction from IDC that Japan will be one of the largest geographic public cloud markets in 2019, with a spending forecast of US$7.4 billion.6

It’s not only domestic companies that are expanding their usage of cloud in Japan; foreign companies with branches in Japan are adopting it as well. For many, it is important to keep their data stored nearby, either for security, compliance or latency reasons. As more businesses expand into the cloud, data centers like our new TY11 facility will be essential to supporting digital transformations and innovation. The location of TY11, close to the Tokyo metropolitan area, allows for CSPs to move services closer to their customers at the digital edge via Platform Equinix®, ensuring seamless, consistent and secure data transfer.

Innovative initiatives 

Japan is known to be an early creator and adopter of new technologies. As we approach 2020, Japan has high expectations for technological and infrastructural development. Japan intends to make the Tokyo 2020 Olympic Games the most innovative in history with the implementation of cutting-edge technology. Already, initiatives such as the Tokyo 2020 Robot Project,7 multilingual translation tools and high-end sport-related data capture devices are being rolled out to develop robotics technology for the Games, an initiative likely to lead to further robotic developments in the future.

The Olympics provide a unique opportunity for innovation, but are by no means the only source of inspiration for Japan’s technological initiatives. The Japanese government has also rolled out a new initiative called “Society 5.0,” which aims to integrate innovative technologies such as IoT, big data, AI and robotics into everyday industry and social life. This holistic plan will reduce inefficiencies, improve public infrastructure and resolve various social challenges in all aspects of society. Its aim is to enable the long-term digital transformation of the country, and it will generate tremendous amounts of data as a result. Any delay in the transfer of this data will directly affect the application of these new technologies and result in poor user experience, driving greater demand for secure, fast and reliable interconnection.

Arrival of 5G

Japan has recently announced8 its plan for 5G rollout nationwide by 2023, with base stations set up on traffic signals, creating a mesh network for enhanced connection. The placement of these stations will allow for faster internet use as well as supporting cutting-edge self-driving vehicle projects and emergency communications.

The data collected from these base stations will create endless application possibilities. Furthermore, the technological leap of 5G will allow for new breakthroughs in technological developments which depend upon the faster connection, better energy efficiency and shorter latency. As covered in our recent blog post, as more companies utilize 5G connectivity, reliable, high-speed data transaction services are increasingly essential to support the rapid growth in technology.

TY11 to support growing demand for interconnection 

Our latest and largest IBX data center in Tokyo provides a capacity of 950 cabinets and a colocation space of about 3,700 square meters in its first phase. Future phases are planned for the expansion to more than 3,500 cabinets with a colocation space of more than 14,300 square meters.

Thanks to its position in a hazard-free area, this new facility will support the growing demand for interconnection and data center services from cloud and network service providers, financial services institutions, and content and digital media players in Japan.

All of the reasons above exemplify why we are expanding into Japan and will continue to look for opportunities in this country—Japan has ambitious plans and so do we. The development of TY11 anticipates and reflects the rising importance of interconnection in this highly innovative country.

 

Reference:

1 – https://www.bbc.com/news/world-asia-pacific-14918801

2 – https://www.reuters.com/article/us-global-cities-innovation/high-tech-tokyo-tops-list-of-worlds-most-innovative-cities-idUSKBN1KV1Z9

3 – https://www.srgresearch.com/articles/top-20-metros-generate-56-worldwide-retail-colocation-revenues

4 – http://www.lse.ac.uk/business-and-consultancy/consulting/assets/documents/at-the-nexus-of-trade-and-investment-sectoral-paper-digital-economy.pdf

5 – The Cloud Readiness Index 2018, Asia Cloud Computing Association

6 – https://www.idc.com/getdoc.jsp?containerId=prUS44891519

7 – https://tokyo2020.org/en/news/notice/20190315-02.html

8 – https://asia.nikkei.com/Spotlight/5G-networks/Japan-to-greenlight-5G-base-stations-on-200-000-traffic-signals

 

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