Increased IT Spending in Asia-Pacific Fuels Ambitious Expansion Plans

Global Tech Trends Survey 2022 reveals the top IT strategies for global business expansion

Jeremy Deutsch
Increased IT Spending in Asia-Pacific Fuels Ambitious Expansion Plans

Over the years, organizations in Asia-Pacific have made impressive strides to transition the region from a manufacturing center to a significant technology and innovation hub. Organizations in this region have successfully illustrated the advanced benefits of integrating technology at all levels of business and societies for more connected, efficient and streamlined operations. This played an especially important role in the region’s early response to the pandemic as organizations were able to swiftly pivot operations using digital and mobile technologies. 

This continued acceptance of innovation and openness to adopting new methods of work that we are witnessing today is crucial to the success of economies in Asia-Pacific. Trends in interconnection solutions, cloud and IT infrastructure adoption remain, and some digital leaders are even accelerating global expansion plans despite cautious sentiment and pandemic disruptions. But as the economic landscape progresses under volatile circumstances, how are these leaders managing their strategies for the future of their businesses?  

To better understand the technology trends affecting post-pandemic strategies, Equinix surveyed over 2,900 IT decision-makers worldwide, including Asia-Pacific, in our annual Global Tech Trends Survey (GTTS). In this edition, we look at new findings that point toward major investments in digital technologies to support ambitious expansion plans. Below are key insights about how and why organizations in Asia-Pacific appear to remain bullish about their plans for further global expansion. 

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An expansion plan that covers all-fronts 

According to the latest GTTS, 82% of IT leaders in Asia-Pacific indicated they are planning for expansion in the next 12 months. Interestingly, this data shows that compared to global counterparts, Asia-Pacific leaders don’t seem too phased by economic anxiety.  For example, only 59% of decision-makers in EMEA planning expansion into new markets in the next year. Asia-Pacific leaders seem to be seizing more opportunities and embracing digital to achieve success.  

Coupled with the pandemic’s continuing impact, more than half of Asia-Pacific leaders said they are accelerating their company’s digital evolution. 63% of IT leaders also confirmed an increase in IT budgets as a direct outcome of the pandemic’s legacy. This is significantly higher than all other regions in the report, an insight into the now broadly acknowledged necessity for robust digital infrastructure to pivot to evolving business needs in an instant. Organizations are now reflecting on previous years and recognizing the importance of technology for flexibility and agility in response to disruptions.  

Strategies and demand are driving IT spending up 

If we take a closer look, COVID-19 has shifted how a business approaches technology spending. 46% of Asia-Pacific leaders reported an increase in their carrier neutral colocation spending in 2021 when compared to the previous year. But more interestingly, 78% of decision-makers indicated that spend is likely to remain or increase further in the coming year. This suggests that demand for colocation services continues to grow, likely due to the high adoption rate of cloud-based services and emerging technologies as Asia-Pacific businesses gear up for more growth.  

Alongside colocation, spending on interconnection is also on an upward trajectory. Asia-Pacific decision-makers demonstrated the highest increase amongst all regions, with 68% of respondents reporting increased spending in 2021 compared to 2020. They also rank first for upcoming interconnection spending strategy. Mirroring colocation trends, spending on interconnection for Asia-Pacific leaders is likely to continue as 88% indicated the same or greater spending this year.  

This strategy should be prioritized as interconnection is increasingly necessary to compete and grow in today’s hyper-connected digital economy. Many IT leaders in Asia already see the necessity of interconnection, noting that it improves their network optimization (40%), facilitates digital transformation (40%), and increases the flexibility of their connectivity (39%).   

Deploying a hybrid multicloud model to future-proof business 

While many organizations were forced to adopt the cloud for digital survival, several now realize its benefits for flexibility and continue investing forward to tap into new growth opportunities and future-proof their operations. In fact, 75% of IT leaders said they plan to move even more business functions to the cloud.  

The hybrid cloud model for Asia-Pacific IT leaders was the most widespread deployment method, with 42% stating it was their chosen approach. It was also the highest rate globally, showing that the appetite for this technology will only grow as more organizations are expected to adopt this strategy. Although not as dominant as the hybrid cloud, there is also a growing portion of digital leaders using multicloud, 83% of them currently leverage two or more cloud service providers.  

The rising popularity of both these strategies highlights the need for infrastructure to continue supporting a seamless operating environment. These insights further strengthen the trend that businesses are future-proofing their operations with distributed clouds, as it offers more functionality and flexibility than a single provider or none at all. Interconnection may step in to help here, providing organizations with the ability to reap the full benefits of hybrid and multicloud services through seamless, low-latency connectivity across sites or geographies that can deliver local performance, regardless of where the cloud service resides.  

Rearchitecting IT infrastructure to support emerging technology 

Unsurprisingly, our report also indicated that Asia-Pacific IT leaders are embracing the digital revolution with open arms. Besides the use of existing technology to pursue global growth, leaders are also looking to the future by investing heavily in emerging technologies. This is also supported by governments in the region, who have put in progressive digitalization plans in their territories to accelerate their digital economies. For example, Singapore’s Smart Nation Plan and Australia’s Digital Economy Strategy outline emerging technologies’ use to drive future prosperity.  

These sentiments are likely contributing to the digital boom we see in Asia-Pacific. For example, across Asia-Pacific we are witnessing high adoption of 5G and some of the highest quality 5G experiences, particularly in mature markets like South Korea. Thus, 5G seems to be more of a priority for Asia-Pacific IT decision-makers, with many seeing it as a crucial component of their strategy to take advantage of new technologies in artificial intelligence (AI) and the Internet of Things (IoT).  

However, current infrastructure is not optimized to fully utilize new technology and reap the benefits. This is echoed by 43% of leaders in Asia who indicated the need to rearchitect their IT infrastructure to support 5G capabilities and any emerging technologies that could be reinforced by 5G, such as AI and IoT. The need for rearchitecting is also true for leaders looking to adopt more progressive technology, such as Web3 and everything-as-a-service (XaaS).   

IT strategies shaping the businesses of the future  

The unifying theme across Asia-Pacific IT leaders is growth. Whether they are growing across cities, regions, or continents, they are ambitious and optimistic about the future of business. As we move to a post-pandemic world, we hope these trends provide valuable insights into the mindset and strategy of digital leaders across Asia-Pacific to inform your own digital transformation strategy.  

For more guidance and information about what is fueling strategies—either global or local—read the Equinix Global Tech Trends Survey 

 

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