While COVID-19 presents a new set of operational challenges at a scale none of us could have predicted just a few short months ago, the underlying drivers spurring the need for digital transformation have been accelerating for some time. For example:[i]
- Pre-coronavirus, 70% of professionals globally were already telecommuting at least one day a week.
- In 2019, over 110 million students took online classes from 900+ universities globally.
- In 2020, ecommerce sales are expected to account for over 15% of retail sales worldwide.
- By 2023, IDC predicts that over half of global GDP will be driven by products and services from “digitally transformed” enterprises.
Innovative digital solutions are helping businesses increase their IT agility to address these growing trends. From teleworking and telemedicine to online education, shopping and entertainment, and a vast array of new digital products, services and experiences, organizations now have many options to help them more quickly scale and optimize their IT operations.
One of the first steps businesses need to take to tap into these fresh opportunities is to move their centralized IT infrastructures to hybrid IT architectures at the digital edge. This enables them to shorten the distance to users, partners, customers, systems, data and clouds to better support real-time interaction. From there, innovating at scale requires collaboration and fast, secure data exchange within a rich ecosystem of partners. This is fueling the need for interconnection, which is the direct and private exchange of traffic between key business partners.[ii]
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According to the third annual Global Interconnection Index (GXI), a study published by Equinix, as the digitization of the global economy grows, so does installed interconnection bandwidth worldwide. The GXI measures and forecasts the growth of the private interconnection bandwidth required to support the companies driving digital business. By 2022, the GXI Volume 3 estimates that installed interconnection bandwidth worldwide could reach 13,300+ Tbps, the equivalent to 53 zettabytes annually. In one minute, that amount of interconnection bandwidth could concurrently process 1.3 billion video games or 45 million self-driving cars.
How digital is transforming Latin America
In a recent APCO Insight survey of 2,485 IT global decision-makers, 76% in Latin America (LATAM) said they believe interconnection is a key facilitator of digital transformation.[iii] Unsurprisingly, LATAM is projected to be the fastest-growing region in the world for the second year in a row, with interconnection bandwidth capacity increasing at a 63% compound annual growth rate (CAGR) over five years (2018–2022). LATAM is expected to account for 11% of the global installed interconnection bandwidth, reaching 1,430+ Tbps by 2022[.
Dubbed the next “Silicon Valley” by the press, LATAM is one of the fastest growing regions for digital services.
A unique financial environment, combined with a young, tech-savvy population is helping accelerate LATAM’s digital transformation, particularly in areas such as digital banking, e-sports, gaming, streaming video and online shopping. As a result, the region, dubbed the next “Silicon Valley” by the press for its burgeoning tech boom, is one of the fastest-growing regions for digital services.
Adapting to rapid change
Teleworking is increasing rapidly in LATAM, which is driving growth in remote work tools such as Skype, Zoom, and Webex. As an example, Home Office Management, a Brazilian company specializing in remote work software, reported 50% growth in signings year to date.[iv] While coronavirus has been slower to reach LATAM, strategies to limit the spread of the virus, such as bans on travel and group gatherings, school closures, etc. will likely be similar to other regions. Digital technologies have the potential to help LATAM businesses fast-track how they adapt to these rapid changes by expanding the activities that can be enabled virtually through teleworking, remote learning, and virtual events.
5 strategies to get digital ready for change
Making sure your business is ready for rapid change means ensuring you can continue with business as usual (BAU) as much as possible during unexpected events. Having a good business continuity plan in place is essential, and the following five strategies outlined in the GXI can help you get digital ready to handle change, while growing new value:
- Network optimization reduces costs and latency, while increasing bandwidth. You can shorten the distance between users and services by placing interconnection hubs at the digital edge, close to providers, partners, users, data and clouds.
- Hybrid multicloud simplifies complexity and reduces cloud connectivity costs, while providing greater connectivity choice. Directly connecting to multiple clouds across distributed locations, and segmenting traffic locally in the hubs will improve your application performance and lower latency.
- Distributed security reduces risk and ensures that data stays safe and compliant. You can reinforce your security by deploying and connecting security controls in the interconnection hubs for real-time transparency and control across the digital landscape. And you can leverage private interconnection to avoid security risks inherent in the public internet.
- Distributed data reduces data transport costs, enables real-time content delivery / data analysis and helps to maintain compliance. By placing analytics, data lakes and data controls in the hubs to integrate data pipelines, manage massive data volumes and generate insights, you can put data where it is most needed, while keeping it secure and compliant. By leveraging standardized data models, you can maintain compliance throughout your organization.
- Application exchange between partners in digital ecosystems improves the user experience, strengthens agility and resiliency, fosters innovation and speeds time to market. Leveraging interconnection hubs, you can share applications and privately exchange data with partners to generate timely insight and expand the value chain.
Read the GXI Volume 3 for more information on interconnection growth trends and deployment scenarios by region, industry and ecosystem partners.
You may also be interested in reading “Interconnectivity, Essential to Compete in the Digital Economy”, an IDC LATAM analyst report.
[i]CNBC, 70% of people globally work remotely at least once a week, study says, May 2018; Class Central MOOCReport, By The Numbers: MOOCs in 2019, Dec 2019; Oberlo, 19 Powerful Ecommerce Statistics That Will Guide Your Strategy in 2020, Dec 2019; IDC FutureScape Outlines the Impact “Digital Supremacy” Will Have on Enterprise Transformation and the IT Industry, Oct 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.
[iii] APCO Insight survey, sponsored by Equinix, August 2019.
[iv] BNAmericas, Coronavirus: Telcos scramble to beef up networks as people stay home and Coronavirus: Telcos scramble to beef up networks as people stay home, Mar 2020.
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