There’s no doubt that digital transformation is accelerating in EMEA. In a recent survey of 600+ European IT leaders, nearly two-thirds (66%) said they are running over half of their enterprise business applications in the cloud, and 87% said they are operating in a multicloud environment using two or more clouds.[i] We are seeing similar trends in the Middle East as I discussed in my previous article, “Accelerating Digital Transformation via Hybrid Multicloud in the Middle East,” where rapid cloud adoption is speeding up digital transformation across the region. And, like the rest of the world, EMEA is fast-tracking digital progress in response to COVID-19. Consider these indicators from 2020:[ii]
- In the U.K., the e-commerce share of total retail jumped from 20% to 30% in just two months, while online grocery purchases nearly doubled from May to June.
- In France, there were almost half a million online telemedicine consultations in just one week, a 12.5x increase over the 40 thousand the month before.
- In March, following a surge in video streaming, Netflix agreed to reduce the bitrate for its streams across the European Union (EU) to lessen demand on networks.
Many EMEA organizations still in the early stages of digital transformation were not prepared to address rapid changes like these, or the large-scale shift to remote work brought on by the global pandemic. To adapt, these organizations turned to service providers to help them build more agile digital infrastructures at the edge. As a result, digital service providers are expected to make up over half of Europe’s interconnection by 2023 according to the Global Interconnection Index (GXI) Volume 4, published by Equinix. Specifically, Telecommunications and Cloud & IT Services combined are projected to comprise 54%, or 2,052 Terabits per second (Tbps) of Europe’s total installed interconnection bandwidth (3,782 Tbps) by 2023.
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Trends driving digital transformation in EMEA
Five macro trends identified in the GXI are driving digital transformation in EMEA and elsewhere. These include rapid growth in digital business, urbanization, cybersecurity risk, data volumes and compliance requirements, and business ecosystems. Combined with external multipliers such as COVID-19, these trends are intensifying the need for a digital-first approach. The European Commission recognizes the strategic importance of these developments and recently announced its intention to strengthen Europe’s digital leadership over the next decade as part of Europe’s “Digital Decade.”
We believe there are three areas in particular that will be essential to EMEA’s digital leadership heading into 2021 and beyond: hybrid multicloud, next generation networks and sustainable digitization.
Europe is already a leader in cloud adoption and the Middle East is growing fast. Hyperscale and colocation demand continues to be strong across the Frankfurt, London, Amsterdam and Paris (FLAP) markets, and the regulatory environment is pushing businesses to store data locally. As a case in point, the European public sector is partnering with the private sector to foster secure data exchange in the cloud with projects like GAIA-X. This initiative aims to develop a secure European multi-vendor cloud platform with a unified governance process that is compliant with data regulations such as GDPR. In addition to this, 25 Member States in the European Union (EU) recently agreed to invest up to $12.1 billion (10 billion euros) toward the deployment of interconnected cloud capacities across Europe.[iii]
In support of these trends, we previously launched a joint venture with GIC to develop and operate xScale™ hyperscale data centers in Europe. These hyperscale data centers in Europe are located near existing Equinix International Business Exchange™ (IBX®) data centers, enabling hyperscale cloud providers to easily add deployments to their existing access points on Platform Equinix®. We also opened our fourth IBX data center in the Middle East in Oman and expanded Equinix FabricTM to seven additional metros in EMEA.
Next generation networks
Digital transformation cannot succeed without connectivity. Important emerging applications such as connected cars, manufacturing automation and digital banking require direct and secure, fast, low-latency connectivity to exchange data. 5G and software-defined networks (SDN) offer a path to agile, efficient, high-speed network infrastructure that can support applications like these at the digital edge. As of September 2020, 18 out of 28 European countries had deployed commercial 5G networks.[iv]
At Equinix, we are supporting service providers and enterprises as they shift to these modern, flexible networks. Interconnection services on Platform Equinix such as Equinix FabricTM enable our customers to connect physically and virtually to dense ecosystems of networks, clouds and businesses over high-speed, low latency virtualized connections around the globe. They can also deploy and connect to virtual network services via Network Edge services in minutes without additional hardware. We also recently announced a 5G Proof of Concept Center to enable network service providers (NSPs), mobile network operators (MNOs), cloud service providers and enterprises to test complex 5G and edge deployment scenarios.
One of the great promises of digital technology is that it can help us become more sustainable, and a key priority for the EU is to become climate neutral by 2050. There are policy initiatives on the table to turn the European Green New Deal into law, including mandates for data centers to achieve these targets 20 years earlier. Fortunately, with efficiency advances, circular economy principles and clean energy, the data center industry is already leading the way in global sustainability.
As a leader in our industry, we remain committed to growing sustainably and harnessing the power of technology and interconnection to create a more sustainable future for all, whether that is in data center innovation and green design, carbon reduction or clean energy.
To learn more about how you can accelerate your business advantage by harnessing digital infrastructure, read the digital leaders e-book.
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[iv] European 5G Observatory, Announcements of commercial launches, as of the end of Sept, 2020.