Digital Infrastructure Roadmap to Unlock Growth – Part 2: Digital Ecosystems

Digital transformation and the evolution of the digital economy show no signs of slowing down; instead, the pace is accelerating. Digital leaders have discovered that it’s no longer feasible to operate as a standalone company in a hyper-competitive digital world. Instead, the priority must be to invest in the organization’s strengths and leverage ecosystems for commoditized business functions.

In Part 1 of this 3-part series, we discussed why establishing an interconnected digital core is a necessary first step on the journey to digital transformation. When companies leverage the digital core as their foundation, they can tap into a vast ecosystem of suppliers and industry partners that are essential to accelerate a digital-first strategy. According to the 2023 Global Interconnection Index (GXI), a market study published by Equinix, 80% of G2000 companies are predicted to become digital leaders by 2026, interconnecting with 4+ Hyperscale Providers and 30+ SaaS/business partners, on average.

In this blog, we’ll explore how companies are integrating digital ecosystems and discuss the importance of distributed, interconnected digital infrastructure for proximity to the partners that are essential for innovation and competitive advantage.

By embracing the power of ecosystems, organizations are leading with a digital-first strategy. They are inverting the traditional enterprise model by going from siloed and fixed to integrated and dynamic. Ecosystems are most useful when there are many different types of participants with offerings that complement each other.

Ecosystem density is a catalyst for speed, as demonstrated by the fact that interconnected leaders have grown their digital infrastructure more in the last five quarters than in the past five years. This trend is likely to continue. The GXI shows that global interconnection bandwidth is forecast to grow at a 40% 5-year compound annual growth rate (CAGR). This indicates the growing importance of ecosystems: as more businesses start to tap into ecosystems, it’s no surprise to see the volume of data exchanged between partners increase accordingly.

There are different levels of participation and types of digital ecosystems. Companies can lead an ecosystem orchestration or simply participate. There are three basic types of digital ecosystems—platform, collaboration and services—with various models linked to industry sectors, business interaction services and added-value supply chains. Companies can directly and securely interconnect with ecosystem partners using a software-defined interconnection service such as Equinix Fabric™.

Equinix has had a front-row seat to observe the evolution of digital ecosystems. The company was originally founded to bring disparate networks together to enable peering in a network-neutral environment, which led to hosting the first major digital ecosystem. Fast forward to today: we see an amazing diversity of ecosystems developing across the globe, including those that are unique to enterprises as they connect with their customers, suppliers and partners.

When companies combine direct digital ecosystem access with the power of their adjacent digital infrastructure, they can rapidly generate new value. This crucial combination gives them a gateway to new SaaS offerings, removes the risk that comes with having only a single vendor in the supply chain, transforms business partners into digital value chains, and allows them to monetize new offerings. According to IDC, “Organizations that thrive in the ‘next normal’ will be those that recognize the value of the infrastructure and participate in ecosystems to support and leverage digital-first operations.”[1]

Exchanging views on integrated digital ecosystems

At the recent Equinix Digital Leaders Summit, I participated in a panel discussion with Scott Mullins, General Manager, Worldwide Financial Services for AWS, and Marc Murphy, SVP, Market Services for NASDAQ. We had the opportunity to explore why integrated digital ecosystems matter, from the perspective of an enterprise, a cloud provider, and a digital infrastructure partner.

We all agreed that there’s a sense of collaboration and enablement by enterprises and partners alike to make it easier for their customers to do more of what they do best. That spirit of cooperation is prevalent in digital ecosystems.

During the session, we discussed how companies across multiple industries and geographies are participating in digital ecosystems to solve limitations and unlock digital growth. Digital leaders are following these three common patterns: integrating SaaS and data sources for AI, participating in data marketplaces, and transforming business models and value chains.

Integrate SaaS offerings to increase business value

Digital leaders have learned that developing new offerings and speeding time to market is necessary to compete effectively in a digital economy. That’s not all: lowering costs and streamlining business functions simultaneously strengthens their ability to quickly react to changing market conditions.

Leading retail, healthcare, and content and digital media companies have leveraged the foundation they’ve built on Platform Equinix® to boost business value with SaaS integration. This foundation enabled them to efficiently scale access to SaaS applications and ecosystem providers, accelerating their business growth.

Deploying local digital infrastructure on demand allows companies to improve SaaS workflows and integrate the latest innovative tools from the widest range of SaaS providers available. Moving to an on-demand, subscription-based model helps businesses shift from CAPEX to OPEX, freeing up trapped capital for reinvestment into digital growth.

Equinix benchmarking found that integrating SaaS offerings led to:

• 4x faster introduction of new digital offerings
• 30–60% reduction in process overhead
• Improved latency and risk reduction

Participate in data marketplaces to monetize data offerings

The volume of data is increasing exponentially, yet companies still require access to new data sources to enrich and monetize their data. Data marketplaces present a more cost-effective way to share and leverage data.

By provisioning digital services adjacent to the highest-value data marketplaces, digital leaders have gained access to new data sources, reduced risk, decreased transfer fees and benefited from economies of scale with the broadest choice of partners. Platform Equinix gives these leaders the ability to provide new data services, both through a wide range of data marketplaces and directly to individual business partners. Twenty of the top 30 companies in the manufacturing, healthcare and financial sectors have all leveraged the data marketplaces available through the Equinix platform.

Equinix benchmarking found that participating in data marketplaces led to:

• 40-60% increased data quality
• 5x faster response to meet demands
• 5-10x improved data monetization

One network service provider that is partnering with Equinix to strengthen data sharing in the healthcare ecosystem is euNetworks, a leading provider of bandwidth infrastructure services in Western Europe. euNetworks builds next-generation networks that deliver high-fiber count connectivity with unique and diverse routing. By connecting remote research locations and sites away from core metro areas, euNetworks supports the demand for rapid and reliable movement of data between healthcare communities and their ecosystems.

Build new value chains leveraging commercial ecosystems

As digital leaders ramp up their businesses, automating business processes and scaling service delivery platforms increase in importance. Ensuring low latency and high performance for their digital services are also top priorities.

Companies are leveraging access to relevant technology and business communities on Platform Equinix, such as payments, logistics, connected vehicles, fintech, healthtech and more. They ensure the lowest-latency and highest-performing digital services through API-driven collaboration, directly connecting with the highest density of commercial partners in strategic locations. On-demand, subscription-based offerings allow them to shift to flexible consumption models, freeing up capital to invest in their digital growth.

Equinix benchmarking found that leveraging commercial ecosystems led to:

• 20x increased data exchange
• 2-5x faster access to new markets
• CAPEX to OPEX shift to leverage on-demand and subscription services

Integrating digital ecosystems requires digital infrastructure

If you’re ready to take this next step in your journey to digital transformation, make sure you’ve deployed the digital infrastructure necessary for your company to seamlessly connect to customers, partners, providers and other ecosystem participants. Integrating digital ecosystems requires a global footprint and access to the right ecosystems in the right places.

Equinix has supported thousands of companies on their digital transformation journeys with our 240+ data centers spread across six continents, and connectivity to 3,000+ cloud and IT service providers and 2,000+ network providers.

To learn more about how today’s top enterprises are building out their digital infrastructure roadmap, read the Equinix Leaders’ Guide to Digital Infrastructure today.

To hear more from the panelists on how they expect digital ecosystems to evolve into the future, watch the Integrating Digital Ecosystems session.

You may also be interested to read:

A Blueprint for DX Success: Start with Hybrid Infrastructure and Connected Ecosystems – IDC | Equinix Analyst Report

Check out the rest of this three-part series:

• Part 1: Digital Core
• Part 3: Digital Edge

[1] IDC white paper, sponsored by Equinix, “A Blueprint for DX Success: Start with Hybrid Infrastructure and Connected Ecosystems,” Doc #US46746121, April 2021.