Distance is a digital business killer. However, this was not always the case. In fact, the opposite was true. Early in my career as an IT professional, distance between IT infrastructures was a requirement for any disaster recovery solution. Solutions required distance to support the business. As distributed solutions matured, the idea of placing data centers and IT services in proximity to users and systems that needed them wasn’t even on the table. Today’s digital leaders are now discovering that distance seriously degrades application performance and user experience, and that a fundamentally new architecture is needed to meet the demands of digital.
Digital business now requires dynamic, latency-sensitive workloads. For applications such as mobile payments or programmatic advertising, a response time of more than 20 milliseconds constitutes an utter failure. To solve this issue and drive greater value, IT teams must materially reduce the distance between IT services, applications, users and business partners at the edge. As more business is driven to the edge, greater volumes of data are being generated and exchanged there as well. In its report, Top 10 Emerging Trends Affecting Digital Infrastructure and Operations in 2019, “Gartner predicts that, by 2022, more than 50% of enterprise-generated data will be created and processed outside the data center or cloud.”[i]
At Equinix, we see this happening with our customers across all industries and in all regions. The growth of data everywhere is forcing companies to take a new approach to solving the distance dilemma, and they are doing it by leveraging private interconnection at the edge. The third annual volume of the Global Interconnection Index (GXI), a market study published by Equinix, measures and forecasts the growth of private interconnection bandwidth capacity required to support the increasing amounts of data being exchanged between businesses.[ii] The GXI predicts that by 2022, interconnection bandwidth growth is estimated to reach 13,300+ Tbps – double the peak of global internet traffic and more than 13 times the volume, which translates into 53 zettabytes (ZB) annually.
of enterprise-generated data will be created and processed outside the data center or the cloud.
The GXI report provides real-world evidence of the direct correlation between companies shifting their IT service delivery to the edge, the increase in data volumes and the growth of interconnection bandwidth. For the first time, the GXI analysis provides insights into how interconnection growth is occurring across industries, between businesses and in major metros around the world. From this information, you can benchmark your company’s digital readiness and take the necessary steps toward transforming your IT infrastructure to succeed in the global digital economy.
Insights into digital readiness
The following insights from the GXI Volume 3 are based on deployment data from leading enterprises worldwide over a three-year period. The deployment data includes an analysis of 450 new companies who deployed more than 4,100 implementations worldwide. Since each company (and industry) solves different problems with different priorities at different times, the ratio of cabinets and connections is expected to vary significantly. On average, these companies deployed 9 interconnection hubs, 240 cabinets and 330 connections in total.
Insight #1: Digital readiness equals distributed IT services
The GXI Volume 3 demonstrates how digital transformation requires shifting from a centralized IT services model to one that is regionally distributed and designed for higher performance and better user experience. As a result, concentrations of industry-specific ecosystems have been emerging in major metros around the world, driving the need for greater interconnection between business partners and digital (network, cloud, SaaS) service providers. In the blog, “A Practical Guide to Digital Business Success,” we describe the steps required for companies to reach a digital-ready state. These include deploying network optimization, hybrid cloud, distributed security, distributed data, and application exchange via interconnection hubs at a business’s edge, close to employees, partners and customers. The digital-ready state illustrated below shows how globally distributed interconnection hubs are connecting ecosystem participants via a vast array of direct and secure connections at the edge.
The GXI will help you benchmark your company’s digital readiness and take the necessary steps toward transforming your IT infrastructure to succeed in the global digital economy.
A digital-ready state requires globally distributed interconnection hubs
Insight #2: Digital readiness means interconnecting with digital and business ecosystems
The table below represents how businesses in multiple industries are leveraging different concentrations of interconnection with network service providers (NSPs), cloud service providers (CSPs) and business partners. Each of these interconnection deployment models are being driven by customer needs that are specific to each industry.
As you may expect, Telecommunications, Securities & Trading, and Content & Digital Media businesses have the most private interconnections to NSPs, CSPs and business partner ecosystems. These industries were early adopters of interconnection due to their need to directly connect with other providers and enterprises. The deployment data also offers insight into the different journeys each industry is taking in order to solve its business and customer requirements. Manufacturing for instance has to manage vast quantities of data. We can see how this results in significantly more cabinets given their requirement to share this data across their supply chain, cloud and business partners. Wholesale & Retail, on the other hand, is using a completely different deployment model. Here we see a much higher concentration of interconnection per cabinet, illustrating the priority to integrate cloud and ecosystem partners as they need to deliver a greater remote user experience.
3. Digital readiness requires that you are in the right metro
A closer look at the GXI report’s metro level analysis shows which industry sectors have the highest level of interconnection in a specific metro. By understanding which industry ecosystems are leveraging the most interconnection bandwidth capacity in these metro regions, you can identify new opportunities for regional and global market expansion. For example, the metros that showed the highest interconnection with telecommunications companies are Washington, D.C., Silicon Valley, Frankfurt, Amsterdam, Singapore and Sydney. Whereas, Dallas, Chicago, London, Amsterdam, Singapore and Tokyo have the highest concentration of private interconnection with energy and utility firms.
The GXI Volume 3 report arms you with fresh insights on actual global interconnection deployments that you can take action on. It tells you where IT and interconnection are being deployed by industry, who the companies in each industry are connecting with, and where in the world it is all happening.
With this invaluable information, you can determine where your company is in its digital maturity and from that benchmark, develop a game-changing digital business platform – one that maximizes your position at the edge to bring new value to your customers, employees and partners on a global scale.
Read the GXI Volume 3 to learn more about what interconnection can do to accelerate your business’ digital transformation.
[i] Gartner, Top 10 Emerging Trends Affecting Digital Infrastructure and Operations in 2019, David Cappuccio, Ross Winser, 11 February 2019
[ii] Interconnection bandwidth is defined as the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers.