Digital-First Strategies Power Business Transformation in APAC

GXI Vol. 5 shows how interconnected ecosystems are advancing digital infrastructure in the region

Tejaswini Tilak
Sophie Ben Sadia
Digital-First Strategies Power Business Transformation in APAC

Digital transformation is surging in Asia-Pacific (APAC) markets—fueled by increasing customer experiences, optimizing operations and enabling 5G, cybersecurity, artificial intelligence (AI), machine learning (ML) and big data analytics deployments throughout the region. In addition, APAC’s domestic product (GDP) is seeing catalytic growth from smartphones, mobile, broadband, e-commerce, cloud and enterprise software. It is estimated that by 2030, APAC GDP will account for 52% of the growth in global tech company revenues.[i]

According to the Equinix 2020-2021 Tech Trends Survey (GTTS):

  • 76% of IT leaders in APAC are digitizing IT infrastructure
  • Two-thirds (66%) plan to move more functions to the cloud

In addition, 61% of the survey respondents see interconnection—the direct and private traffic exchange between two or more parties, inside a carrier-neutral colocation data center—as a key facilitator for digital transformation.

The recently released fifth annual Global Interconnect Index (GXI) report illustrates how the time for a digital-first strategy is now, and APAC businesses are making that bold leap.

The time for a digital-first strategy is now.

The Global Interconnection Index (GXI) is the industry’s leading source of data and insight on interconnection and its increasing impact on the digital world.

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APAC digital transformation is driving interconnection bandwidth growth by a projected 46%

The GXI Volume 5, published by Equinix, forecasts that by 2024, the APAC region will make up 28%, or 6,002 terabits per second (Tbps), of the global interconnection bandwidth capacity (21,485+ Tbps), with a projected 46% compound annual growth rate (CAGR). This is a strong indicator of how APAC businesses are successfully leapfrogging toward digital maturity by leveraging private interconnection between ecosystem partners.

This industry and metro interconnection bandwidth forecast data, along with real-world deployment benchmark information from APAC digital leaders, aids APAC Enterprises and Service Providers[ii] in advancing their digital transformation strategies. A proven and reliable reference, the GXI helps APAC businesses plan out their regional and global digital infrastructure deployments and service delivery.

The GXI Vol. 5 shows APAC Service Providers playing a key role in delivering connectivity to enterprises for their digital transformation. Out of the total APAC interconnection bandwidth capacity estimate, Service Providers make up 65% of the mix over five years (2020–2024) vs. Enterprises (35%). Regional and global Service Providers can leverage the GXI to see where Enterprises are growing their interconnection bandwidth capacity in various industries in key APAC metros, giving Service Providers a view into potential digital transformation business opportunities.

28%

By 2024, the APAC region will make up 28%, or 6,002 terabits per second (Tbps), of the global interconnection bandwidth capacity (21,485+ Tbps).

Leaders in APAC interconnection bandwidth growth

Interconnection bandwidth[iii] growth in APAC is a result of how rapidly this dynamic region is advancing digital transformation in all industries via interconnected ecosystems of Enterprises and Service Providers. Cloud & IT Services and Hyperscale Providers are estimated to grow interconnection bandwidth capacity annually by 46% and 45% (respectively) by 2024, according to the GXI Vol 5. As Hyperscale Providers are major investors in the growing number of subsea cable systems in the APAC region, it is not surprising that they are growing significantly in interconnection bandwidth capacity.

For example, Naver Cloud, South Korea’s leading IT infrastructure and cloud services provider, expanded its global presence by deploying its core and edge infrastructure on Platform Equinix® to meet its customers’ cross-border cloud demands.

65%

Out of the total APAC interconnection bandwidth capacity estimates, Service Providers made up 65% of the mix vs. Enterprises (35%).

A key priority of NAVER Cloud’s growth strategy is to expand our cloud services business globally, and bring them closer to our customers everywhere who demand high performing and reliable connectivity to network and cloud service providers with zero downtime. With Equinix’s extensive experience in helping cloud companies to scale, they were the best partner to help us in our journey to achieve our ambition.” - RaeJoon Jung, Director of Asia Pacific, NAVER Cloud

Fueled by a boom in e-commerce and digital payments (accelerated by the global pandemic), APAC financial services industries are estimated in the GXI report to have a dramatic rise in Enterprise interconnection bandwidth capacity by 2024. There is also an increase in the demand for Fintech, open banking and digital banking services in the region. And with APAC Banking & Insurance (56%) and Securities & Trading (49%) rapidly adopting digital business processes, together the two sectors make up the largest interconnection bandwidth growth rates in the region (shown in the diagram below).

APAC Enterprise Industry Forecast (2020 – 2024)

Demand for secure, high-performance, low-latency connectivity in the Financial Services sector is powering private interconnection bandwidth growth. For example, Spark Systems, a foreign exchange trading platform that processes $600 billion worth of daily transactions in Singapore and Asia, needed an ultra-fast, low latency, stable and relatively inexpensive solution to upgrade its architecture. By leveraging Platform Equinix interconnection services to support its trading platform and connect to other key locations, Spark significantly reduced its trading latency from 360 milliseconds to 1 millisecond. 

Interconnection distribution is fueled by Enterprise cloud and network access

Digital core locations in APAC—where organizations establish the foundation for their digital platform—are forecast to grow to 3,624 Tbps by the GXI report, supporting the acceleration of Enterprise access requirements to Cloud & IT Services and Networks. Since APAC Enterprises are still building up core locations in Hong Kong, Sydney, Singapore and Tokyo, core metros’ interconnection bandwidth capacity represents 60% of the region’s total core/edge mix (see diagram below). Singapore stands out as the number one metro in every industry sector in APAC for interconnection bandwidth growth, except for Content & Digital Media, where Sydney tops all other metros in the region.

Digital edge locations are where an organization’s digital presence meets the physical world, enabling local proximity to customers, employees, endpoints and intelligent operations. The GXI forecasts APAC edge metros expanding interconnection bandwidth capacity at a 52% CAGR by 2024, with several metros approaching the volume and density of core locations. Shanghai and Beijing are the largest edge locations in the region, and are forecast to grow Network and Cloud ecosystems, approaching the levels of density seen in core locations.

APAC businesses that have made the leap to digital first

APAC companies in any industry or stage of digital maturity can discover insights from the GXI report that will inform them about starting or speeding their own digital-first journey. Here are some examples of APAC companies that have accelerated their transformation journeys by leveraging digital-first strategies:

  • Fung Group, a global leader in supply chain solutions whose core businesses include trading, logistics, distribution and traditional and digital retailing, deployed Oracle Exadata Database Machine running on Equinix Fabric™ to digitize its supply chain ecosystem.
60%

Since APAC Enterprises are still building up core locations in Hong Kong, Sydney, Singapore and Tokyo, core metros’ interconnection bandwidth capacity represents 60% of the region’s total core/edge mix.

A fast-moving market and ever-changing customer needs mean we constantly have to assess where and how we deliver value. The improved performance offered by Equinix and Oracle’s solutions has been essential to Fung Group in keeping up with market demands, enhancing services for our customers. These together have enabled us to take a great step forward in realizing our vision to transform the future of supply chains.” - Iman Mak, Executive Vice President, Group Technology, Fung Group
  • Children’s Cancer Institute (CCI) in Australia partnered with Optus telecommunications and Equinix Sydney to offer an interconnection platform solution that supports its Zero Childhood Cancer Initiative. This partnership enables CCI to deploy a secure, reliable, cloud adjacent architecture and offers private connectivity via Equinix Fabric to AWS, Azure and Google for high-speed data processing and complex genomic profiling.

The time for digital transformation is now

Digital transformation is surging in the APAC region, as well as around the world, requiring more complex processes and architectures to drive a richer user experience. This increases the demand for greater connectivity among growing Enterprise and Service Provider ecosystems. The GXI illustrates this via deployment benchmarks on Platform Equinix that show the number of parties that are connecting to each other by industry in core and edge locations. With more than 10,000 companies, including 1,800+ networks and 3,000+ Cloud & IT Services providers on Platform Equinix, enterprises can leverage private interconnection to increase their application performance, security and scale, and partners can provide enterprise customers an end-to-end added value solution based on a robust digital infrastructure.

The GXI Vol. 5 forecast shows how APAC organizations are using interconnection bandwidth and distributed infrastructure to shape and scale the global digital economy. It outlines the observed strategies that digital leaders employ on Platform Equinix to make the leap, and provides details on the size and growth rate of digital deployment activity in APAC core and edge metros to inform digital-first strategies.

Advance your digital-first journey by reading the full GXI Vol. 5 report.

You may also want to read:

GXI Vol. 5 Global Blog

GXI Vol. 5 Americas Blog

GXI Vol. 5 EMEA Blog

 

 

[i] FutureMap, “Technological Change and the Impact of Asia,” Dr. Parag Khanna.

[ii] Service Provides include: Telecommunications/NSP, Cloud & IT Services, Hyperscale Providers, and Content & Digital Media.

[iii] Interconnection bandwidth is a measure, calculated in bits/sec, of the capacity provisioned to privately and directly exchange traffic between two parties, inside carrier-neutral colocation data centers.

Tejaswini Tilak
Tejaswini Tilak Senior Director, Segment Marketing Asia-Pacific
Sophie Ben Sadia
Sophie Ben Sadia Vice President, Partner Sales, Asia Pacific