Today, success for the enterprise means investing in digital technologies to enter new markets, engage customers in unprecedented ways, and explore new business approaches. This actually involves inverting the traditional enterprise model—transforming from being siloed and fixed to one that is integrated and dynamic. Now, new forms of digital business engagement and exchange (direct peering) are possible thanks to advanced digital ecosystems that enable all-new levels of growth and ROI. For in the digital age, the leaders that control the market have the best virtual integration, where they assemble and manage the largest network of product and service providers.
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Why are digital ecosystems so important?
Digital ecosystems bring what’s known as network effects. By integrating with virtual environments, companies are able to build composable business models out of interchangeable services and capabilities that can be easily swapped out as business needs and/or new technology dictates. Adapting to change (such as the global COVID-19 pandemic) is no longer akin to steering a new course in an ocean liner. Enterprises can react faster, more efficiently and for less cost than ever before.
But like any paradigm shift, proper implementation is crucial to achieving a competitive advantage. First, companies have to decide how they wish to participate in any given ecosystem. Do they want to lead the ecosystem orchestration or simply participate? Orchestrators establish the parameters of the ecosystem and maximize the value of it. Those digital leaders bring together partner enterprises with different business models and strengths from different industries, without the traditional boundaries. Customers receive a direct network effect in this manner. Participants provide support via a variety of business models (product, platform, etc.) and generate indirect network effects. Regardless of function, each enterprise must know its core strengths and allow other ecosystem stakeholders to create value that is greater than would be otherwise possible alone or at scale.
A trifecta of ecosystems
Every ecosystem has several participants with different but interconnected and interdependent roles. An ecosystem is powerful and vibrant when supported by many different types of participants whose offerings complement each other. While markets and technologies are constantly evolving, there are currently three basic types of digital ecosystems—platform, collaboration and services.
A platform ecosystem is made up of the companies that make and sell infrastructure. These include digital foundational building blocks like networking, storage and compute, as well as digital services and/or appliances. It’s broader than just infrastructure-as-a-service (IaaS) as it includes all technologies in a more open and democratized market.
A collaboration ecosystem is a community of companies focused on data, artificial intelligence (AI) deep learning, and knowledge exchange for the purposes of creating new value or solving complex problems. For example, developing a vaccine or studying global climate change. The idea is that more data equates to more knowledge, which improves understanding and accelerates the discovery process for identifying and developing solutions.
A services ecosystem is where companies provide specific business functions and make those functions available as a service to other companies. This enables enterprises to construct new supply and value chain models—thereby optimizing their own business processes. For example, a video game developer who integrates and interconnects with a payment ecosystem.
New ecosystem models are emerging
Different markets are made up of these three diverse digital ecosystems across various sectors. Companies from multiple industries join forces to participate in business interaction exchanges, creating new ecosystems models. For example, individual retail, financial services, transportation and logistics ecosystems are coming together to form a new digital ecosystem to create more efficient, added-value supply chains.
Ecosystem gravity and network density
Digital ecosystems have gravity and draw in more participants. This creates network density among interconnected ecosystems and partners within the data center. By removing the distance factor, issues such as network latency, jitter and failures are either eliminated or greatly reduced. Companies can directly and securely interconnect with ecosystem partners leveraging one-to-many software-defined interconnection, such as with Equinix Fabric™.
Interconnection redefines the economics of data and time to communicate. It’s the most efficient way to transfer large volumes of data and traffic between an increasing variety of participants—while realizing the lowest latency, fastest speeds, best reliability and quickest connection provisioning possible. And since all those interconnections are private and not public as with the internet, the risk of cyberthreats disrupting any given ecosystem is significantly minimalized.
Take the example of a government agency that acquires/shares large quantities of data with multiple downstream partners. Traditionally they would resort to limited, cost-prohibitive dark fiber and/or capacity-constrained long-haul VPNs. With a digital exchange presence on an interconnection platform, such as Platform Equinix®, persistent and/or non-persistent interagency connectivity can be established within minutes.
Not a dating app, but close
Technology advances have also brought significant intelligence to the digital ecosystem paradigm. At Equinix, we have developed a proprietary data science methodology that can further accelerate the efficiencies and profitability of digital ecosystems. The Global Interconnection Index (GXI) enables geolocated data center teams to understand markets, customers and partners in a deep, comprehensive manner.
This allows us to become a great matchmaker thanks to AI tools such as the Equinix Marketplace™, enabling actionable steps that deliver the most value for customers by linking them with partners best suited to their needs, in addition to recommending digital ecosystems that will offer the greatest benefits and ROI. In this way, enterprises of all types (orchestrators, participants, customers) can eliminate a tremendous amount of time and frustration finding the right fit.
Equinix at the heart
In today’s digital economy, ecosystems are an essential part of doing business. The scope of digital ecosystems is dynamic and consists of multiple products, services, platforms and solutions. On Platform Equinix, we have interconnected digital ecosystems made up of enterprises and service providers within every industry around the world, including more than 1,800 networks and 2,950+ cloud service providers. The Equinix global footprint of more than 220 data centers in 63 global markets makes it possible for ecosystem partners to gain the proximity they require to each other in the geographic markets where they need to do business together.
For more Information, read the Platform Equinix Vision paper.