Ecosystem Expansion in EMEA Driven by Emerging Digital-First Strategies

GXI Vol. 5 shows how industries are architecting digital infrastructure for competitive advantage

Matthew George
Orla Ni Chorcora
Ecosystem Expansion in EMEA Driven by Emerging Digital-First Strategies

Enterprise digital transformation is advancing in the Europe, Middle East and African (EMEA) regions, thanks to the symbiotic relationship between Enterprises and Service Providers. For example, almost half (47%) of EMEA’s IT professionals are migrating critical applications to cloud service providers (CSPs) to gain greater competitive advantage, according to the Equinix 2020-2021 Tech Tends Survey.

Enterprise digital transformation with ecosystem partners such as CSPs is just the tip of the iceberg. EMEA business leaders are increasingly powering their digital strategies through interconnecting with Service Provider[i] digital infrastructure at both digital core and edge locations. The interconnection bandwidth[ii] for these interactions is projected to make up 64% of the region’s overall estimated capacity between 2020–2024, based on new research reported in the fifth annual volume of the Global Interconnection Index (GXI) report.

The time for a digital-first strategy is now.

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Interconnection to Service Providers is driving faster Enterprise digital transformation

According to the GXI Vol. 5, EMEA interconnection bandwidth is expected to grow at a 46% CAGR by 2024, making up 25% of total global interconnection bandwidth capacity. The GXI’s global industry research, recently published by Equinix, forecasts how organizations are using interconnection[iii] and distributed infrastructure to shape and scale the global digital economy.

During the pandemic, EMEA Service Providers had to “step up” to meet the unprecedented demand from Enterprises. As a result, Service Providers deployed 20% more digital infrastructure in EMEA than other regions worldwide. The high volume of digital infrastructure deployments by Service Providers in EMEA provides the foundation for Enterprises to accelerate interconnection bandwidth growth and fast-track their digital-first strategies.

46% CAGR

According to the GXI Volume 5, EMEA interconnection bandwidth is expected to grow at a 46% CAGR by 2024, making up 25% of total global interconnection capacity.

EMEA forecast shows increasing core and edge digital infrastructure distribution and ecosystem interconnection

The GXI helps both Enterprises and Service Providers see where the greatest digital infrastructure growth opportunities are by industry and metro so they can plan out their digital expansion strategies. For example, EMEA regional metro core and edge locations are growing quickly, spanning multiple metros and industry ecosystems. Digital core locations are where organizations establish the foundation for their digital platform, and digital edge locations are where an organization enables local proximity to customers, employees, endpoints and intelligent operations. Conceptually, the core includes corporate network, multicloud and regional back-end data infrastructure locations, and the edge includes locations close to specific ecosystem concentrations—driving gravity, density and value. However, given a business’s employee, partner and customer location requirements, Enterprises will define their core and edge locations as they see fit, along with the interconnection requirements with specific ecosystem partners in all metros.

  • Core locations are forecast to grow at a 45% CAGR to 3,994 Tbps, representing 75% of the regional forecast.
  • Edge locations are expected to expand interconnection bandwidth capacity 10% faster than core metros to support the growing need for local participation and maintain regional compliance.

The GXI report forecasts the FLAP (Frankfurt, London, Amsterdam and Paris) metros making up the largest in overall EMEA interconnection bandwidth capacity by 2024 with 75% of the regional mix. Paris is the fastest growing core metro in EMEA at a 47% CAGR, and the top three growing edge locations are Dubai (60% CAGR), Dublin (58% CAGR) and Madrid (56% CAGR).

A related driver of EMEA core and edge interconnection bandwidth demand is the increasing number of submarine cable landing systems that are carrying Telecommunications, Hyperscaler Provider and Content & Digital Media traffic around the world. New multi-continent subsea cable projects, such as EllaLink connecting Latin America and Europe and 2Africa, coined “the cable of life,” connecting Africa, Europe and the Middle East, will open up greater demand for digital infrastructure and ecosystem interconnection in key core and edge EMEA metros.

Edge locations are also seeing an influx of Cloud & IT and Hyperscale Providers that will help Enterprises maintain regional compliance and expand their local presence. Hybrid multicloud is a key component to businesses’ digital-first strategies, as an accelerant for digital transformation and growth.

EMEA industry ecosystems that are leading in digital transformation

Enterprise industry ecosystems are driving 36% of the EMEA region’s interconnection bandwidth mix. Service Providers are enabling Enterprise growth by deploying in multiple core and edge locations in the region (on average): two core and four edge.

The following industry Service Providers and Enterprises are examples of those leading the way in deploying digital infrastructures:

Telecommunications

Telecommunications providers alone make up 32% of the EMEA interconnection bandwidth global mix, with 1,737 Tbps and a 45% CAGR by 2024. For instance, Equinix EMEA Channel Partner of the Year, Orange Business Services (OBS), is deployed in 25 Equinix metros across 16 countries and leverages Equinix Fabric™ with the OBS global network to interconnect enterprises securely and reliably to leading network and cloud providers. In 2020, OBS saw substantial global growth, especially in EMEA, offering joint use cases for WAN modernization, hybrid multicloud, M&A integration, agile data center infrastructure and digital business.

EMEA regional metro core and edge locations are growing quickly, spanning multiple metros and industry ecosystems."

Financial Services

EMEA’s Financial Services sector leads in Enterprise interconnection bandwidth capacity (18% of the regional mix), with London and Frankfurt as the top EMEA metros in the Banking & Insurance and Securities & Trading sectors. With the insurance industry facing change, increasing restrictive regulations and new digitally enabled competitors pressuring traditional insurance revenue streams, dedicated interconnection is required in this industry to advance digital transformation.

Public Sector

EMEA’s Public Sector was behind the digital transformation curve, but is catching up fast as it is forecast to be the fastest growing industry with an annual interconnection bandwidth growth rate of 54% by 2024. For example, billions of Euros are being spent on upgrading rail infrastructure, with national governments investing in faster intercity trains, rail electrification and flexible commuter train concepts—with an objective to carry more rail passengers, on more trains, running more regularly, with on‑time arrivals, at a lower cost.

Siemens, a leader in engineering solutions for the global rail industry, uses data collected from 300+ sensors on each train and overlays this with historical data to predict when components might fail. Working internationally, the company must ensure the data is stored according to local laws via the most cost-effective means possible.

To help Siemens solve the challenges, Teradata partnered with Equinix to provide an interconnection-first approach to its cloud-based, active disaster recovery solution. By deploying on Platform Equinix with Teradata, Siemens re-architected its IT service management infrastructure for a digital edge by integrating digital and cloud technologies, while optimizing automation, improving reliability and boosting performance.

18%

EMEA’s Financial Services sector leads in Enterprise interconnection bandwidth capacity (18% of the regional mix).

Our customers get more mileage from fewer trains. Data analytics can speed up the root-cause analysis, reducing labor time. It is all about increasing uptime and avoiding unplanned downtime. If we predict incidents early enough, we—and our customers—can react accordingly.” - Gerhard Kress, Vice President of IoT Platform, Siemens

Read the GXI Vol. 5 report and learn how to master digital infrastructure for a digital-first world by solving for digital core, ecosystem and edge strategies.

 

You may also want to read:

GXI Vol. 5 Global Blog

GXI Vol. 5 Americas Blog

GXI Vol. 5 Asia-Pacific Blog

 

 

[i] Service Providers include: Telecommunications, Cloud & IT Service, Hyperscaler Providers, and Content & Digital Media.

[ii] 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.

[iii] Interconnection is the direct and private traffic exchange between two or more parties, inside a carrier-neutral colocation data center.