How Infrastructure Will Accelerate Digital Transformation in 2023

The beginning of a new year is the perfect time to pause and consider what’s next for digital transformation. Industry leaders have been discussing it for years now, but we’re seeing some eye-popping investment figures that drive home how much the digital economy will accelerate in the years to come. In its Worldwide Digital Transformation Spending Guide, IDC predicts that global digital transformation spending will reach $3.4 trillion by 2026.[1] To put this in perspective, if digital transformation were a country, its GDP would rank in the top five globally.

In this post, we’ll explore how transformation is happening across data, technology, people and processes. We’ll start by looking at the “how” of digital transformation—new digital infrastructure projects that are increasing global connectivity—and then look at the “why”: the transformative use cases enterprises will adopt in 2023 with the help of digital infrastructure.

New subsea cable investments help close the digital divide

Subsea cable systems have existed for over 150 years now. During that time, they’ve come to play an indispensable role in enabling the modern digital world as we know it. So, can we really expect anything new or unique to happen with subsea cables in 2023?

Subsea projects will kick into overdrive in 2023 because the industry is still working through a significant backlog caused by the COVID-19 pandemic. In spite of how important these cables are, there’s a limited number of vessels capable of laying them, so it’s no surprise we’ve been dealing with bottlenecks for at least two years now. In 2023, the industry will finally start to meet that pent-up demand. According to TeleGeography, almost $5 billion in subsea cable spending has already been announced for 2023.[2]

We don’t have to look far to find examples of how transformative these projects could be in certain parts of the world. In Africa, big tech companies are investing in cable projects that are the first step toward bringing hundreds of millions of new participants into the digital economy for the first time. This includes Equiano from Google and 2Africa from Meta. We can only imagine which new cable projects will take important steps forward during 2023, and just how big the impact of those projects will be.

Use cases for low-Earth orbit satellites arise, but questions remain

The development of low-Earth orbit (LEO) satellite communication services also suffered due to the pandemic. In 2022, the geopolitical situation in Ukraine made the problem even worse.

However, that same geopolitical strife also gave LEO satellites their first big opportunity to shine on the global stage. The SpaceX Starlink constellation has helped keep the Ukrainian people connected to each other and to the wider world at a time when traditional communication infrastructure is under constant threat.

Satellite internet in warzones is not a new concept, but Starlink offers much higher capacity and resiliency than satellite networks used in previous conflicts. According to The Economist, the success of Starlink in Ukraine has ignited a new space race.[3] Governments around the world are planning their own constellations because they recognize the key role satellite internet will likely play in future conflicts.

SpaceX and OneWeb have emerged as the only two companies capable of deploying LEO satellites on a global scale. In 2023, both these companies will continue to build out their satellite constellations; in the case of SpaceX, the company could reach up to 12,000 operational satellites.

At the same time, we’re seeing a shift in the market that will likely continue during 2023. LEO satellites have become essential for use cases related to first responders and national security missions. If internet connectivity is a literal matter of life and death—and if cost is no object—then LEO satellites are the right choice. However, when it comes to more widespread adoption in cases where internet connectivity is only a “nice to have,” the cost-benefit equation isn’t clear yet.

This is because LEO satellites are primarily intended to extend connectivity to under-connected places that lack terrestrial fiber infrastructure. These are the same places where the customer base would have difficulty affording the services. Paying several hundred dollars for a satellite terminal is more than a mere inconvenience in these places; it’s enough to make the service completely unattainable. Satellite providers recognize the need to make services affordable for a wider customer base; this will be an important part of their ongoing evolution during 2023.

How digital infrastructure will enable transformation use cases in 2023

It’s always exciting to follow new digital infrastructure projects like the ones mentioned above. However, it’s important to remember that the “why” can be just as important as the “how” when it comes to digital transformation. Advancements in digital infrastructure will help unlock the full power of new use cases for IT teams across the world. Let’s consider a few examples.

No-code platforms

Global enterprises are empowering nontechnical users to build applications that address specific business challenges via drag-and-drop platforms that don’t require coding experience. This will inevitably lead to more applications running in more places. Enterprises will need flexible, distributed digital infrastructure to support all those applications.

Increased cloud migration

For those of us in the western world, it may seem like cloud adoption is old news. However, in other places, it’s just starting to pick up. This isn’t because IT leaders in those regions didn’t understand the benefits of cloud before now; it’s because they lacked the infrastructure needed to get to the cloud. For this reason, it’s no surprise the cloud providers themselves have invested heavily to help expand digital infrastructure worldwide, as in the case of Google and the Equiano cable system.

AI/ML

In 2023, enterprises will continue to accelerate adoption of artificial intelligence (AI) and machine learning (ML) capabilities to make more informed decisions and provide a more personalized customer experience. To make bots better, AI models must process massive volumes of data with extremely low latency. This means enterprises need distributed digital infrastructure in more places so they can deploy the compute closer to the data sets, instead of bringing the data to the compute. The cable projects mentioned earlier are the first step toward making advanced AI applications possible on a global scale.

Automation

No digital transformation strategy is complete unless it includes automation. There’s a symbiotic relationship between digital infrastructure and automation: you need the right digital infrastructure to enable automation, whereas applying automation can help you deploy and manage digital infrastructure with greater flexibility and efficiency. We still have a long way to go to reach the ideal of a completely hands-off approach to monitoring and maintaining data center equipment. However, we can expect progress toward that ideal to continue in 2023.

Automation can also help meet key sustainability goals by better managing operating temperatures. One example is our recent announcement that we’re “adjusting the thermostat” in Equinix IBX® data centers to optimize energy use, in line with the globally accepted boundaries of the A1A standards from the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE).

Everything-as-a-Service

The latest Equinix Global Tech Trends Survey (GTTS) found that 71% of global IT leaders said they planned to move to an Everything-as-a-Service (XaaS) model. The preference for XaaS may be clear, but the exact definition of what constitutes XaaS isn’t. In order to do true XaaS, companies must get literally everything as a service. This includes not only the digital applications they use, but also the infrastructure, power and everything else that helps those applications run.

With our combination of colocation services in key global metros, a digital ecosystem of leading cloud and network providers, and interconnection services to bring everything together, Platform Equinix® provides everything you need to start capitalizing on XaaS today.

Connect with Equinix

To learn more about what’s next for networks, and how Platform Equinix is helping enterprises turn those advancements into transformational use cases, request a meeting with Equinix at the Pacific Telecommunications Council (PTC) annual conference, held January 15–18, 2023.

Also, check out the Leaders’ Guide to Digital Infrastructure e-book. You’ll learn more about how leading companies are optimizing their infrastructure to accelerate transformation, and how you could do the same.

[1] “IDC Spending Guide Sees Worldwide Digital Transformation Investments Reaching $3.4 Trillion in 2026”, IDC, October 26, 2022.

[2] Patrick Christian, “A 2022 Update on Interconnection Geography”, TeleGeography, November 8, 2022.

[3] “Starlink’s performance in Ukraine has ignited a new space race”, The Economist, January 5, 2023.