Why Network Service Providers are Set to Reap the Benefits of Multitenant Data Centers in Asia-Pacific

Capturing the Network Opportunities of the Digital Era on Platform Equinix® 

Anthony Ho

Today, the importance of networks is often forgotten, and yet they are the driving force behind the digital era. For gamers who need lightning-fast speeds, they are essential. Networks are critical for streaming TV, and will be the backbone of 5G technology when it is fully rolled out, which will lead to a huge rise in mobile data traffic. However, as the importance of networks grow so does the competition in the space to secure new customers and enable new digital revenue streams.

So how are some networks thriving in an increasingly competitive space? According to a recent infopaper from Equinix, network service providers (NSPs) that deploy points of presence (PoPs) in multitenant data centers (MTDC) early, win a disproportionately large share of business from the facility’s customers in the first two months.

Take, for example, the opening of the Equinix ME1 International Business ExchangeTM (IBX®) data center in Melbourne in April 2014. By March 2016, 13 out of the 22 NSPs that deployed early had taken 61% of all interconnection opportunities in ME1. Similarly, four out of 15 NSPs, which deployed early in our OS1 IBX data center in Osaka, had captured 60% of all interconnection opportunities in just three years.

These examples, among others, highlight that when NSPs establish early partnerships with MTDCs, they can take advantage of the majority of available traffic, reducing the network complexity needed to deal with multiple clients. Here are just a few examples of how MTDCs are helping networks to thrive:

Creating a home for thriving network ecosystems

By gaining access to the network ecosystem housed in MTDCs which consists of a wide array of NSPs, enterprises can accelerate their application performance by directly connecting to service providers. These ecosystems also enable the expansion of services, lowering the cost of ownership through a diversity of network and service providers, and increasing revenue for a large customer base.

At Equinix, we offer a global data center platform and extensive business ecosystems to help companies meet network expectations and seize global opportunities. With Platform Equinix, customers can enjoy access to the widest choice of potential partners, including 1,800+ networks, 1,250+ financial service providers, and 2,900 cloud and IT service providers globally.

Reaching the digital edge

As demand for digital services is continually on the rise, this has spurred the need for new application networking models. In addition, technology innovation is transforming the role the networks play and how services are delivered to support digital businesses. It is important to realize that, in today’s digital era, traditional or on-premise data centers do not have the capacity to cater for global users, with the distance between traditional data centers and end users proving to be too great.

With NSP platforms usually built around their core networks, we are seeing more and more NSPs implementing new capabilities like dynamic provisioning, distributed network controls, and moving functions closer to the digital edge. This is being supported by MTDCs, which are able to reduce the complexity of providing multiple customers with a shortened distance between users and services, resulting in lower latency, improved performance and better user experience.

Answering the increasing appetite for cloud

As many customers seek on-demand, private connectivity to their cloud providers in today’s digital economy, it is NSPs that are stepping in to provide private, on-demand multicloud connectivity to their business customers to help them maximize their cloud investments. Therefore, NSPs are now seeking streamlined, multi-cloud access that can be quickly leveraged to make their own product offerings more attractive.

MTDC colocation and the reduction in customer-specific data centers also present an opportunity for NSPs to search out new markets for their services. As they help their customers gain even more value from the cloud, NSPs are seeking to partner with a rich ecosystem of cloud services and automation functionality.

As a result, we have seen the numbers of NSPs adopting Equinix Cloud Exchange FabricTM (ECX FabricTM) increase dramatically since its launch, with NSPs turning to us in ever-growing numbers to offer their business customers on-demand, private, multi-cloud connectivity.

Maximize cloud value with ECX Fabric

The GXI Vol. 3 reveals 68% of enterprise interconnection bandwidth is expected to be used to interconnect with network providers and 24% to clouds. With NSPs using 35% of our virtual connections according to our data in February this year, ECX Fabric has huge potential to become the global standard for how the world’s leading networks connect to the cloud.

ECX Fabric has been designed to connect global digital businesses from where they are, to where they need to be. By using Platform Equinix, NSPs can establish data center-to-data center network connections on demand between any two ECX Fabric locations, whether locally or on the other side of the world. Along with an intuitive portal user interface and APIs, NSPs can provision virtual connections to their cloud providers within minutes, whereas the traditional method can take up to weeks or months.

By collaborating with Equinix and harnessing our rich ecosystem of cloud service providers, including Amazon Web Services, Microsoft Azure, Oracle Cloud Infrastructure and Google Cloud, via ECX Fabric, NSPs are in a strong position to give their customers on-demand, private connectivity to multiple cloud providers, which in the end will gain more value from the cloud.

As digital economies continue to emerge and thrive, the pressure on networks to innovate, connect and expand will remain high. By leveraging the opportunities offered by MTDCs, these providers can stay in front of customer demands and deliver on the promise of a digital future. Download this infopaper to learn how you can benefit from being a first mover!

 

Reference:

1 – https://www.marketwatch.com/press-release/network-as-a-service-market-in-asia-pacific-is-estimated-to-showcase-the-rapid-growth-rate-of-over-40-from-2019-to-2025-2019-07-15

2 – https://blogs.forrester.com/press-newsroom/the-asia-pacific-public-cloud-market-will-reach-23-8-billion-by-2020/

Anthony Ho
Anthony Ho Director of Regional Product Management at Equinix in Hong Kong.