Phygital Connectivity: Enabling Seamless Interaction in the Physical-Digital Realm

How Asia-Pacific enterprises can navigate the physical and digital continuum with interconnection

Anthony Ho
Phygital Connectivity: Enabling Seamless Interaction in the Physical-Digital Realm

Over the past decade, the physical and digital realms existed as separate entities, each occupying their own spaces with distinct characteristics and limitations. People went about their lives, engaging with the physical world through tangible experiences, while the digital world remained confined to computers and the Internet. But as time passed, a subtle shift began to occur — a “phygital” convergence that would redefine the way we work, consume and interact with our surroundings and one another. It began with the advent and subsequent boom of e-commerce, where the boundaries between physical outlets and digital marketplaces began to blur and dissipate. Customers began to adopt new consumption practices at an unprecedented pace, browsing and purchasing products from the comfort of their own homes.

The accelerated adoption of e-commerce began to pave the way for new digitally transformative innovations like generative AI, digital identities and emerging business models that are driving the digital evolution of the whole economic system of Asia-Pacific. Enterprises and service providers are beginning to realize the profound impact and opportunities arising from the convergence of our physical and digital worlds. Equinix’s network of interconnected data centers form a bridge between these two realms, providing organizations with the ability to access AI innovations and the necessary digital infrastructure to unlock new frontiers across industries. By leveraging neutral interconnection ecosystems on Platform Equinix®, they can engage in collaborative digital partnerships and flesh out their digital capabilities.

Interconnection offers clear omnichannel visibility between consumers and stores

Among industries, the retail sector has witnessed tremendous digital change over the past few years. Industry leaders are now pouring time and resources into achieving digital competencies to reach the droves of shoppers turning to e-commerce. In Asia-Pacific, the e-commerce market size is expected to grow from USD 2.41 trillion in 2023 to USD 4.02 trillion by 2028, at a CAGR of 10.73% during the forecast period (2023-2028).[1] In order for retail merchants to successfully capture this growth, they can’t afford to rest on their laurels and wait for orders to be fulfilled. Retail leaders are already pivoting to a digital-first approach, expanding online selections that can overtake the volume of physical store selections by multifold. Escalating the digital approach allows retail enterprises to focus on customer experience and customization, rather than just price and delivery. By breaking down the silos between digital and physical store strategies, retail players can offer greater levels of optimization and personalization in comparison to their sole physical counterparts.

Evolving customer expectations are pushing retailers to become cognizant of the need for faster, efficient and accurate information regarding omnichannel inventory stock, new promotional pricing and the precise status of their deliveries. Digital services are playing a key role in facilitating supply chain management to meet the demands of their consumers, many of which are quick to turn to alternative e-commerce choices when dissatisfied with a retailer’s service offerings. The demand for digitalization will continue to rise with e-commerce adoption, prompting retailers to reimagine their infrastructure to include digital capabilities that provide optimal experiences and maintain a leading presence in the minds of their consumers.

Tokopedia, Indonesia’s largest digital marketplace platform is able to create consistent and personal user experiences across its platform by connecting to major cloud service providers (CSPs) of their choice through Equinix Fabric®. Transactions and personal digital information can be exchanged at high speed, low latency and deployed at the edge to ensure proper compliance with local data regulations and robust security against external cybersecurity threats. Tokopedia’s rapid growth and rise to unicorn status has led to its need for Network Edge, which allows the platform to add branded Virtual Network Functions and services in near real time to meet the on-demand scalability needs of its rapidly expanding digital marketplace platform to benefit both its shoppers and merchants.

Addressing the challenges of AI deployment with hybrid infrastructure

Generative AI is taking the world by storm, transforming the way people create content, generate insights and innovate across a multitude of industries. As we increasingly leverage AI for a limitless range of tasks, it is paramount that IT infrastructures and operating personnel are prepared for sustained adoption and usage. According to the Equinix 2023 Global Tech Trends Survey (GTTS), 42% of IT leaders stated that they are not confident in their infrastructure’s ability to accommodate the growing use of AI, resulting in the need for enterprises to revisit and adapt their existing infrastructure to better facilitate its implementation. Movement and storage of large data quantities that also include public, private and purchasable data are required for many AI models to be trained or function. However, this data environment brings with it its own set of data challenges such as cybersecurity and legal issues.

Enterprises must protect privacy and comply with local regulations while maintaining streamlined access for relevant stakeholders when storing or exchanging data. Many organizations prefer to stage foundational AI models in their own physical infrastructure at edge locations where data is primarily generated. Therefore, enterprises may want to deploy AI inference clusters in multiple regions to reduce data backhauling in a single central location. With Platform Equinix, enterprises can adopt a hybrid infrastructure approach that allows them to run AI training workloads at the core and edge to achieve flexibility and cost-efficiency. Hybrid architecture allows private AI models to facilitate day-to-day workload requirements with the option to leverage the cloud for large models and periodic data-intensive tasks. This allows enterprises to reap the benefits of a predictable on-demand cost model that expands their digital capacity when needed while allowing them to maintain control of their AI models and data without any security compromises.

Staying ahead of security exploits through digital identity frameworks

Our current identity verification mechanisms are under pressure from security threats that lead to costly data breaches and financial loss; with Asia-Pacific being the most attacked region, accounting for 31% of attacks globally.[2] Nefarious actors are exploiting various physical methods like SIM swap techniques and social engineering with hard-coded social security numbers to get around two-factor authentication safeguards. Existing physical identification processes are insufficient when protecting individual data caches, an interconnected digital infrastructure approach is required to preserve user choice and privacy. Proper usage of digital identification can help governments and enterprises improve trust with their stakeholders without impairing the flow of data.

Digital identity is a priority in many countries as a primary source of identification and as an opportunity to foster digital, financial and social inclusion. Equinix Metal® allows organizations to deploy distributed Bare Metal as a Service at the edge to interconnect disparate communities and ensure that they have access to established connections with authentication services and identity verification systems. Equinix’s neutral interconnection platform facilitates integration and interoperability among different identity management systems and platforms, creating a unified digital identity framework in a rich digital ecosystem. By fostering collaboration within the digital identity ecosystem, Equinix enables businesses and governments to implement trusted digital identity solutions, ensuring seamless authentication and secure management of sensitive information such as biometrics and biographic data.

Thriving in the midst of a convergence between physical and digital

Physical and digital spaces are becoming more intricately intertwined, improving the ways we exchange services, information and value. Beyond hardware and software, connectivity will be a key component to bridge the gap between the two spaces and allow for endpoint security solutions that will not stifle digital marketplace movements and AI innovation. As organizations gain a better understanding of how they can leverage interconnected ecosystems, Equinix will provide the requisite digital services and platform needed for them to develop digital capabilities and navigate a new “phygital” world.




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