We are living in a digital-first world. The businesses that recognize this fact and establish themselves as digital leaders will be in the best position to react with agility to overcome challenges, improve their customer experience and establish new revenue streams.
Although each business is different, the Global Interconnection Index (GXI) 2023, published by Equinix, found that the common factor unifying digital leaders is that they’ve all merged business and technology strategies to ensure they become the disruptors, not the disrupted. According to the GXI, the number of organizations becoming digital leaders grew 30% percent over the last year, despite supply chain constraints and geopolitical and economic instability.
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Digital leaders are also quickly growing their interconnected digital presence. The GXI shows that global interconnection bandwidth will grow at a five-year compound annual growth rate (CAGR) of 40%. This is a clear indication that businesses of all sizes, across all regions of the world will be increasing the amount of data they exchange with their ecosystem partners and service providers via direct, private interconnection.
Businesses that have optimized all three components of digital infrastructure—the digital core, ecosystems and edge—will be best positioned to drive digital growth going forward. This blog is the first in a three-part series that will cover each of these components, and how they help accelerate growth.
Digital leaders have replaced their legacy centralized IT infrastructure with distributed, interconnected digital infrastructure, which can be deployed quickly and flexibly in locations throughout the globe. At Equinix, we call this new approach Interconnection Oriented Architecture®, and it’s essential to enabling growth and agility in the digital age.
The three components of digital infrastructure are all important in their own ways. However, the digital core is unique because it’s the first step for organizations looking to initiate digital transformation and move away from legacy infrastructure. These organizations understand they need a digital presence across key locations occupied by large volumes of service providers. Establishing an interconnected digital core allows them to set consistent, low-latency connections in all those locations, and therefore enables optimized multicloud access and global network agility.
In addition, an interconnected digital core provides optimized multicloud access across regions. By tapping into low-latency connections to cloud on-ramps from the providers of their choice, enterprises can establish a cloud-agnostic architecture. By avoiding lock-in to a particular cloud vendor, digital leaders are able to build a hybrid multicloud environment that offers the ideal combination of best-of-breed services, cost-efficiency, resiliency and more. In addition, running the right workloads in the right locations is key to supporting the latest digital applications reliably and securely, and creating an optimized end user experience.
Sharing diverse perspectives on the interconnected digital core
The recent Equinix Digital Leaders Summit featured a panel discussion between my Equinix colleague Jon Lin and two guest speakers: Ross Brown, Senior Vice President of Strategic Services and Partners for Oracle, and Luis Castillo, Director of Enterprise Architecture for National Instruments.
Over the course of the session, the speakers touched on why an interconnected digital core is important, how organizations build them and what business value they can achieve from doing so. Some of the topics that came up during the session are the same ones we’ve heard over and over again in our experience working with digital leaders to drive transformation. I’d like to share a few of them in this blog post.
Network modernization forms the foundation for optimized digital infrastructure
In a digital-first world, you can’t expect to have control over your business strategy unless you first have control over your network. To achieve optimal business results, you need to be able to move the right data to the right place, right when you need to. That’s why network modernization is frequently a jumping-off point for organizations looking to get started with their digital transformation initiative.
By deploying their network infrastructure near the locations with the highest volumes of traffic aggregation, digital leaders have prepared themselves to scale for exponential data growth, meet the latency requirements of advanced digital applications and unlock cost savings that can be reinvested to drive forward other aspects of their digital transformation. According to the Equinix Leaders’ Guide to Digital Infrastructure, network modernization initiatives frequently achieve return on investment in as little as 6–12 months.
For many enterprises, a key aspect of network modernization is replacing MPLS. Modern network solutions such as SD-WAN and software-defined interconnection provide the greater flexibility and visibility needed to establish effective hybrid multicloud networking. A cloud interconnection solution such as Equinix Fabric™ makes it much easier to find and connect with the service providers of your choice in a matter of minutes, not weeks. In addition, Equinix Fabric offers the flexibility to add or change virtual connections to keep up with the changing needs of the business.
Equinix colocation services and software-defined interconnection capabilities can form a reliable, cost-effective network backbone for organizations looking to do global data transit. According to Luis, National Instruments was able to reduce its internet service spend by about $3 million a year. The company achieved this in part by deploying regional hubs in Equinix locations that were strategically selected to be close to cloud providers and to its customer base.
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Cloud adjacency helps drive cost-efficiency, performance and flexibility
We all know that cloud services have been fundamentally transformational for IT infrastructure. That said, enterprises can no longer expect to achieve optimal results by working with a single cloud provider. Today’s cloud services are much more differentiated than those of the past, which means enterprises need the flexibility to take advantage of best-of-breed services from different providers. To do that, they need a hybrid multicloud architecture. In turn, they can get the best results from their hybrid multicloud architecture by establishing a cloud-adjacent digital core.
With cloud adjacency, you can move data sets into the clouds of your choice on demand, taking advantage of low-latency connectivity. It also removes the need to place data in cloud storage unless it’s strictly needed there to support a particular application or use case. This can help greatly reduce data egress and other hidden costs of cloud. Equinix benchmarking found that cloud adjacency can lower the cost of moving data into and out of clouds by 3–4x.
During our session at the Equinix Digital Leaders Summit, Luis shared how working with a partner like Equinix was essential to helping National Instruments meet its goals around cloud-adjacent infrastructure. ”Companies like Equinix are strategically placed very close to the cloud providers,” said Luis. “The reality is if you want the lowest latency and the best performance, you’re most likely not going to get that in a cost-efficient manner anywhere else.”
Dedicated cloud brings together on-demand compute with cloud services
For today’s enterprises, multicloud access is a given. However, digital leaders also recognize that they can get the best results by pairing cloud services from multiple providers with dedicated on-demand compute, analytics and specialized hardware, all provided in cloud-adjacent locations. At Equinix, we call this “dedicated cloud,” and we believe it represents the next evolution of private cloud.
Working with a digital infrastructure partner such as Equinix to deploy dedicated compute capabilities, on-demand and in proximity to the cloud services of their choice, can help enterprises accelerate the shift from CAPEX to OPEX and drive operational savings of 30–40%. In addition, collocating compute capabilities in the digital core instead of deploying hardware in traditional private data centers helps prevent technical debt, and thus helps enterprises future-proof their digital infrastructure.
The virtualized hardware solutions that enterprises deploy as part of their dedicated cloud environment can be purpose-built and workload-optimized for today’s advanced digital applications. This could drive performance benefits of up to 80%, when compared with generic virtual infrastructure.
Digital leaders are also using automation capabilities to deploy the dedicated digital infrastructure and cloud connectivity that their business requires. Equinix benchmarking found that this approach could reduce deployment time by as much as 5–10x.
Start interconnecting your digital core today
Forming an interconnected digital core requires a global footprint and access to the right partners in the right places. With our 240+ data centers spread across six continents, and connectivity to 3,000+ cloud and IT service providers and 2,000+ network providers, Equinix is the ideal partner to support this key step in your digital transformation journey.
To learn more about how today’s top enterprises are tackling the challenges and capitalizing on the opportunities of the digital age, read the Equinix Leaders’ Guide to Digital Infrastructure today.
Also, check out the Equinix Global Interconnection Index for a closer look at how the digital core is driving interconnection bandwidth growth across the globe.
Check out the rest of this three-part series: