Why You Need to Move to Digital Now

I recently participated in a webinar by 451 Research, a part of S&P Global Market Intelligence, discussing why and how organizations are making the leap from traditional infrastructure to digital-first. What motivates an organization to move toward a digital strategy? Why should they transition from conventional infrastructures to a digital infrastructure model that is a hybrid of both physical and virtual environments? And how does Equinix play a role in this transition with a set of steps and tools—making it considerably easier for organizations to make these digital moves?

These are some of the questions that my colleague at Equinix, Zach Smith, Managing Director of Equinix Metal™, Zach Nimboorkar, Senior VP of Global IT Infrastructure and Operations at Schneider Digital, and I discussed with Eric Hanselman, Principal Research Analyst for 451 Research, as we looked at what it takes for companies to make the leap to digital.

The digital-first difference

What does being digital-first mean? Digital-first means shifting the primary way a company makes revenue by using technology as your competitive advantage. Being digital-first goes beyond moving workloads to the cloud. Real gains come when infrastructure, applications and services converge to deliver digital services, yielding scale and flexibility. By taking a digital-first strategy, new markets and digital revenue streams open up with as-a-service business models, which can accelerate all round growth – in business, new products, services and improved operations with ecosystem participation. Digital-first is more than being cloud-first or deploying an e-commerce site or a mobile app. It means developing digital services that offer seamless personal experiences, combined with real-time operational intelligence in proximity to where business happens.

For companies to truly embrace what it means to be a digital business, they must implement business engagement and business transaction models entirely in software (through applications and data). Leveraging a software-defined infrastructure enables businesses to rewire and reconfigure business infrastructure when demand changes — as we’ve seen digital leaders do throughout the global COVID-19 pandemic.

Digital leaders versus digital followers

Market studies from 451 Research and the Global Interconnection Index (GXI), Volume 5 show that organizations are at various stages of digital transformation. For example, there are “digital leaders” and “digital followers”:

• Digital leaders explore how information technology (IT) can be used to assist an organization in becoming more responsive to customer needs and ever-changing business requirements. They don’t just solve their infrastructure problems using technology; they also fix business problems using technology and thus digitize their business.
• Digital followers are organizations that, while they are adapting to new technologies, are slow to implement them and migrate from legacy infrastructures, and do not have a digital-first strategy in place.

For obvious reasons, digital leaders accelerate much faster than digital followers. The GXI shows how over the last two years, digital leaders moved 4.5x farther ahead than where they were previously. These digital leaders experienced years of growth in a matter of months, increasing their advantage as they implemented their digital-first strategies. A 2021 study by Sheryl Kingstone, Research Director for Customer Experience and Commerce at 451 also found that in equity and credit market performance, organizations that are “digital CX leaders” are performing 2.7 times better than those that are “digitally-delayed.”[1]

In addition, since they have been in this transition for a while, digital-first companies did not experience terrible interruptions in service because of the global COVID-19 pandemic. Service interruptions look very different for organizations taking a follower approach, where digital transformation was still on the to-do list. Their business models were still mostly bound to traditional physical limitations and fixed dependencies, and followers found themselves falling behind in business bandwidth throughput, supply chain management, customer engagement, and potentially, their position in the market. For example, according to the GXI, those organizations that failed to leverage cloud, SaaS or partner digital ecosystems showed two to three times slower growth over the past two years.

Moving to a digital infrastructure

The COVID-19 pandemic has brought additional urgency to every organization’s missions. Due to the disruptive nature of the pandemic’s lockdowns and employees working remotely more than ever in history, we’ve seen a significant need for businesses to digitize. Organizations had to switch gears quickly. Digital followers weren’t ready to rewire their infrastructures because they weren’t designed for that level of immense change. On the other hand, those business leaders that had already moved to a digital infrastructure had the opposite reaction to the pandemic—they pivoted with the pandemic’s disruption much faster.

We see digital leaders at Equinix leveraging these three strategies in a distributed manner to create a digital infrastructure:

• Interconnecting the digital core: Removes traditional technology limitations, with cloud adjacent becoming the new on-prem.
• Integrating digital ecosystems: Capitalizes on access to digital marketplaces and ecosystems for exponential capabilities and speed.
• Interacting at the digital edge: Delivers differentiated experiences globally in proximity to population centers everywhere.

Many of our customers’ digital infrastructure leverages a hybrid model—interconnecting physical and virtual environments for the greatest competitive advantage and to drive key components of the global digital economy. To make this transition, organizations need to start deploying these strategies today if they haven’t already done so. A wait and see attitude just won’t work.

Why should I make the leap to digital-first?

Of course, there are challenges in rolling out a digital-first infrastructure, such as developing the right strategy, closing technical leadership and skills gaps, and working within limited budgets. But if flexibility, cost management, agility, scalability and efficiency appeal to you, you must consider a digital-first strategy.

Learn how you can make digitalization work by viewing the 451 Research webinar.

Also, check out the Global Interconnection Index (GXI) Volume 5, the industry’s leading source of data and insight on interconnection and its increasing impact on the digital world.

[1] 451 Research, part of S&P Global Market Intelligence – Special Report: Customer Experience Focus Can Improve Equity and Credit Performance, 2021