Digital transformation: pandemic creates new market competition

Latin American companies will have to accelerate their digital transformation and get ready for these non-linear competitors from all over the globe

Eduardo Carvalho

The economic impacts caused by the COVID-19 pandemic have generated profound market transformations. These go far beyond the decrease in some industries and the rise of others. With new configurations and unprecedented social behaviors, businesses from different sectors ended up seeing themselves in an extremely digital competitive scenario. Therefore, they had to adopt quick strategies to adapt their IT infrastructure to the new market practices. These practices will be guided by an increasingly digital transformation, which demands more flexibility and automation from companies.

If before the pandemic the world was on a relatively analog level, nowadays it has been irreversibly launched to digital. For instance, adopting contactless digital payment technology such as facial recognition, Quick Response (QR) codes, and near-field communications (NFC) to avoid new infections became more popular than ever – even turning cash into a secondary option, in many cases.

GXI Vol. 4

GXI Vol. 4 tracks shifts in the digital economy and their impacts on digital business. Explore how leaders use their digital infrastructure to fuel growth, where it’s happening and how you can use interconnection to stay competitive.

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Another example of the changes in market logic during this period is the establishment of new non-linear competitions. Video conferencing platforms have turned out to be unlikely competitors to airlines. The success of these technologies has shown companies that constant travel taken by employees is not necessary for many meetings and events.

Thus, digital services are positioning themselves as competitors of traditional markets:

  • Delivery apps grow at the expense of physical stores;
  • Streaming competes with theaters and cinemas;
  • Remote work requires new software and so on.

It is even more true when you look to Latin America. According to IDC[1], “LATAM has been characterized by quite heterogeneous environments where traditional IT and multi-cloud environments coexist”. The region, that have gone through the digital transformation process at a slower pace than other regions, now has to accelerate and leverage this momentum to create market disruption and get ready for this non-linear competitors that comes digitally from all across the globe.

According to IDC, 75% of companies in the region are building natively digital IT environments to compete in the global economy and almost 70% of all IT spent in Latin America will move to Third Platform technologies by 2022.

Also, when we look at the Global Interconnection Index (GXI) Volume 4, the interconnection bandwidth[2] in Latin America is predicted to grow at an impressive rate of 50% CAGR – faster than any other region, with an increased demand for edge services, content and last-mile connectivity to transport growing volumes of data.

This scenario leads to a need for hybrid multicloud transformation between regions. Equinix helps businesses to reach this level of demand. It also offers the digital infrastructure that they need to support and communicate between data centers, clouds, and the edge.

Digital infrastructure drives the new world

As digital evolution advances, companies will have at their disposal more tools to establish innovative ecosystems. They will also be able to change the direction of their business to guarantee the best experience for their customers in an agile and effective way. This requires a more efficient and robust IT to ensure low latency and security in a distributed connection scenario.

The increase in data traffic generated by the greater digital presence will need to be efficiently managed, something possible by using digitized and decentralized services. On the other hand, a more complex digital infrastructure will require more professionals to manage hybrid, flexible and efficient environments.

Taking it all into account, leaders will be responsible for guiding investments based on their IT automation strategy. That ensures that routine processes can be done more efficiently and autonomously and makes the structure more scalable and adequate to the needs of digital businesses.

All sectors are re-evaluating their operating environments, re-equipping their businesses to navigate volatile and uncertain times, and paying attention to trends and rapid changes. And you don’t want to be left behind.

Thinking about now, thinking about tomorrow

If your business requires implementations that optimize remote work, a force to adapt to a new competition scenario, or simply considers that the pandemic will permanently change our lives, keep in mind that maintaining fixed structures is no longer beneficial to no one. After all, you need to ensure low latency, stability, scalability, and also reduced maintenance and upgrade costs with the best access to an agile digital infrastructure platform that provides the highest density of secure connections and the richest global ecosystems.

It is necessary to overcome the stage of experimentation of Third Platform technologies like cloud, mobile, social, and big data. IT environments centered around these technologies are fundamental nowadays. Despite that, there are emerging tools that are not able to respond to all the challenges posed by the hybrid management of digital infrastructures. Therefore, Infrastructure and Operations (I&O) leaders must carefully evaluate the promised functionality. They also have to keep in mind that their teams may be forced to fill in the gaps by integrating tools and increasing (not replacing) their benchmarks.

If the pandemic has created new competition and new scenarios in the market, you must be ready to keep up with the flow. Explore how leaders use their digital infrastructure to fuel growth, where it’s happening and how you can use interconnection to stay competitive in GXI Vol. 4.

[1] “Interconnectivity Boosts Innovation in LATAM Digital Economy,” IDC Latin America #LA19012, November 2019.

[2] Interconnection bandwidth is 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.