On December 31, the transition period for Brexit came to a close, marking the end of nearly half a century of Britain’s membership in the European Union (EU). While this means that Britain has left the EU single market, the EU – U.K. trade agreement, signed in late December, maintains trade of goods between the two territories with no tariffs or quotas. On the other hand, cross-border provision of services, such as financial or professional services, remains less certain as there will no longer be automatic recognition of professional qualifications or licenses.[i]
Despite these uncertainties, there are several reasons to be optimistic about digital transformation and technology investment here. U.K. businesses, especially service providers and those in financial services, content and digital media, healthcare and life sciences, continue to expand their digital infrastructure, driving demand for interconnection – the direct and private exchange of traffic between key business partners. The Global Interconnection Index (GXI) Volume 4 predicts that interconnection bandwidth in Europe will grow at a 45% compound annual growth rate (CAGR) from 2019 to 2023. At that time, London alone is expected to account for 35%, or 1,337 Terabits per second (Tbps) of Europe’s total interconnection bandwidth (3,782 Tbps). This is three times higher than Paris and more than twice that of Amsterdam, attesting to the vital role that London will continue to play as a strategic interconnection hub for digital business in the European region.
U.K. businesses, especially service providers and those in financial services, content and digital media, healthcare and life sciences, continue to expand their digital infrastructure, driving demand for interconnection.
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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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Digital transformation trends in the U.K.
The U.K. is one of the world’s top ten global economies and the third largest in Europe after Germany and France. Services, particularly banking, insurance and business services, are key drivers of growth, accounting for nearly 80% of its economy. London is the second-largest financial center in the world and is one of the three command centers of the global economy (along with New York and Tokyo).[ii] That being the case, it’s no surprise that the U.K. is also a core hub for digital business. Some of the major trends driving digital transformation in the U.K. include:
Networks and 5G: One of the most technologically advanced and largest mobile and telecom markets in Europe, the U.K. plans to complete the switch to fiber by 2033.ii The rollout of 5G has also already begun, and some believe it will be a key driver in the U.K.’s competitiveness and economic recovery. Late last year, the U.K. pledged £250 million (approx. $340 million) to diversify the 5G supply chain, which should fuel new business opportunities.[iii]
COVID-19 cloud adoption: Organizations in the U.K. and elsewhere were already rapidly shifting to cloud services to help them automate business processes. When the pandemic accelerated the remote work trend, companies suddenly needed to enable tens of thousands of employees to work from home. This shifted investment in communications and cloud technologies forward, along with increased bandwidth and security solutions.
Artificial intelligence (AI): The U.K. has been a pioneer in AI progress since the beginning when British mathematician Alan Turing launched the field. AI will continue to be a source of new technology investment as companies look for ways to gain a competitive edge and reach sustainability goals. There is also important ongoing AI governance research at the universities of Oxford and Cambridge that can help ensure positive outcomes for AI projects.[iv]
Regulatory environment: Brexit has businesses concerned about regulatory change. Many are investing to ensure they can make a seamless transition to being a non-EU organization, including compliance with the General Data Protection Regulation (GDPR). Open banking laws in the U.K. already require banks to open APIs to third-party developers, making the region one of the fastest growing for FinTechs. Any further deregulation will likely fuel additional growth in digital services such as banking as a service.
How interconnection can help secure Britain’s digital future
These trends are driving rapid change across the U.K. and compelling organizations to adopt digital infrastructure more quickly, particularly in the largest metros – London and Manchester. Adapting to these changes requires agility, speed and partnering for innovation. A global interconnected platform such as Platform Equinix® empowers enterprises to partner with organizations that can help them make the leap to digital leadership. And interconnection services such as Equinix Fabric™ enable businesses to instantly interconnect with their supply chain partners, as well as connect their own infrastructure and services for more flexible architectures. Over 1,400 companies are part of the Equinix U.K. ecosystem in London and Manchester, including 280+ networks, 400+ cloud and IT service providers, 340+ financial services firms, and 115+ content and digital media businesses.
Examples of U.K. companies leveraging Platform Equinix to accelerate their digital leadership include:
- Red Bee Media, a London-based media services company, deployed a hybrid multicloud architecture on Platform Equinix to facilitate cloud-based content workflows between content owners and distributors, improve proximity to users and gain the agility they needed to adapt to rapidly changing demand.
- Three U.K., a leading telecommunications and internet service provider, is deploying network nodes within Equinix IBX data centers across the U.K. to create a cloud-based 5G network. Its new 5G fully-virtualized network provides enhanced capacity, security, scalability and flexibility. By providing the necessary speed for advanced enterprise and edge use cases, it is a significant step in the development of the U.K.’s digital infrastructure and the wider development of 5G networks across the country.
To learn more about how you can benchmark your digital-readiness against today’s digital leaders and grow your strategic advantage, read the Global Interconnection Index Volume 4.
You may also be interested in reading:
- Powering Digital Leaders: Harnessing Your Digital Infrastructure to Gain Business Advantage
- Equinix U.K. managed services
[i] Council on Foreign Relations, What’s in the EU-U.K. Brexit Deal?, Dec 2020.
[ii] Cebr, World Economic League Table 2021, United Kingdom, Dec 2020; CIA, The World Factbook, United Kingdom, last updated Jan 2021; Wikipedia, Economy of the United Kingdom, last updated Jan 2021.
[iii] Mobile World Live, UK pledges £250M to diversify 5G supply chain, Nov 2020.
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