3 Digital Transformation Success Factors: Strategy, Composability, Ecosystems

Companies that thrive amid disruption are agile, adaptive, engaged with partners, and use technology as an enabler

Vanessa Santos
3 Digital Transformation Success Factors: Strategy, Composability, Ecosystems

Digital technology has transformed our world in the last few decades—from the first digital communications to e-commerce, telemedicine, remote work and more. The digital economy is now the dominant form of economic growth, and a growing number of enterprises across industries are delivering digital services. The Global Interconnection Index (GXI) 2024, a market study published by Equinix that measures growth in the global digital economy, predicts that by 2025, 90% of Fortune 500 companies will become digital providers, both selling and consuming digital services.

While digital transformation isn’t a new concept, it has become mandatory for survival as we move into the future of the global digital subscription economy. Companies that don’t digitally transform lose access to markets and customers, and to the capabilities they need to grow and evolve. Meanwhile, other participants in their value chain are already transforming opportunities into revenue growth by leveraging ecosystems that help them grow and innovate.

Thousands of years ago the Greek philosopher Heraclitus said, “Change is the only constant.” It’s true not only in the natural world but also in business and IT. Companies that don’t adapt to a changing business context will be left behind. But often when people think about change, they’re too focused on the newest tech. Technology without strategy doesn’t pay off. You must understand your broader business goals and the impact you want to make so that the tools and technology empower you to take action in support of those goals. Technology needs to be, fundamentally, an enabler—it should serve a purpose that gets translated into business objectives above all else.

Maintaining momentum amid the disruptions of the digital era

Digital technology has revolutionized our world, and in the last few decades, we’ve seen major examples of digital transformation successes and failures. Looking at long-term patterns in rankings like the Fortune 500 and Forbes G2000 can tell us a lot about which companies have thrived over time, especially in the digital age. Some once-great brands have fallen by the wayside because they didn’t align their strategy with the changing market. The digital economy has driven continuous disruptions, and companies that make the necessary cultural changes to align with the digital revolution are more likely to succeed.

Since the advent of the internet in 1996, there have been seismic shifts in the Fortune 500, for example. Mass merchants, big tech and health insurers have climbed up the rankings. But many large banks and traditional auto manufacturers have moved down, especially in contrast to digital-first and internet-native companies in those industries.[1] These changes have been driven by the skill with which enterprises have woven digital into the fabric of the business. Digital leaders are the companies that are thriving, delivering the best customer experiences and climbing up the ladder of success. So, how do you take advantage of digital transformation opportunities to join the ranks of digital leaders?

Strategy: Define what success means and where technology fits in

Digital leadership necessitates having a well-defined relationship to technology adoption. Organizations take varying approaches: Some are eager to adopt the most cutting-edge tech and thus put emerging technology adoption at the front of their planning and decision making. Others use technology to support larger business-centered goals such as improving customer experiences. But, again, one thing is fundamental: technology without strategy isn’t likely to pay off.

Before you can truly succeed with digital, you need to define what success looks like from your company’s point of view and make sure it aligns with the market in which you operate. What are you trying to achieve? What business outcomes are you looking for? This might be things like:

  • Gaining market share
  • Increasing revenue and/or creating new revenue streams
  • Improving customer experience
  • Helping your teams boost productivity so they can focus more on innovation
  • Having the agility to adapt when disruptions happen

When you start with a clear business objective, technology can then serve that goal, helping you achieve success—whatever that means to you.

3 digital transformation success factors

Now that we’ve established the importance of identifying your business priorities up front, let’s think about some of the common behaviors leaders demonstrate. The companies that have succeeded with digital—both digital natives and those that have undergone digital transformation in the last few decades—often have three traits:

1. They’ve adapted their strategy to address market disruptions and continuously reevaluate it.

Adapting your strategy to the broader context means adjusting to disruptions happening in the marketplace and culture—whether that’s geopolitical disruption, inflation or supply chain challenges. It means aligning your strategy for the global digital subscription economy. Subscription-based models apply to everything from how consumers purchase consumer goods (like razors and deodorant) and entertainment, to how enterprises purchase IT infrastructure. In this world of digital subscriptions, customer experience is paramount because users can easily switch to another service if the one they have isn’t satisfactory. Given that change is constant, the context will likely change again before too long. Leaders must repeatedly revisit their strategy and update it to meet the new market context using purpose-led, future-back thinking.

2. They’re creating a composable business.

“Composable business” refers to the idea of dynamically composing capabilities from self-contained services. With a composable business, companies have the flexibility to add and remove features, services and technologies as their needs evolve. Being a composable business also helps organizations bounce back when disruptions happen and makes it easier to capitalize on new opportunities.

3. They’re actively participating in dynamic ecosystems to unlock new opportunities.

No company can go it alone today. If it takes a village to raise a child, it takes an ecosystem to grow a business. According to the GXI, ecosystems are growing exponentially: organizations are now connecting with 30% more business partners in twice as many locations. Robust ecosystems are growing up around AI, and companies are exchanging data and value in growing marketplaces. Engaging in ecosystems also leads to more innovation. Companies that integrate industry value chains are innovating at a 25% higher rate than their peers, according to the GXI. And as the digital economy continues to expand, interconnection bandwidth is forecast to climb at a 34% five-year compound annual growth rate (CAGR).[2]

A strong strategy, composability, ecosystem participation: These are all essential components of a successful digital business.

Make sure you have the right digital foundation for change

Successful digital transformation also requires a well-designed core infrastructure to support the evolution and growth of your business. New challengers may enter your market at any time, and they’re paying attention to customer requirements, so if you don’t have the infrastructure to enable technology adoption and deliver compelling customer experiences, you will fall behind.

When you think about technology investments, align those costs with their potential financial impact. For example, maybe for every $0.10 you spend on processing, you could earn $0.50 of revenue because you’ll be delivering your service faster, and customers in a digital subscription economy will pay more to wait less.

Do you have enough capabilities to deliver what your customers want? Enough bandwidth to exchange data efficiently across your value chain to better serve your customers from edge to core? Are you faster than the competition in responding to new requirements, new demands from end users and new disruptions? In the digital economy, time is a huge asset, both for customers and companies. And your foundational infrastructure determines how fast you can operate relative to competitors.

The companies that become digital leaders start with a strong strategy and a culture that facilitates continued transformation, with a virtuous cycle of feedback. They use technology as a tool to expand and enhance human life, reduce friction and/or help them fulfill their strategic priorities. And Equinix can help you, wherever you are on that journey.

Platform Equinix® provides the building blocks for digital success—creating the place where you can access all the right partners and service providers to engage, exchange data and compose your business model to include the services that will take you to the next level.


[1] How the Fortunes of the Fortune 500 Have Changed Since 1996, PYMNTS, August 7, 2023.

[2] Interconnection bandwidth is a measure, calculated in bits/sec, of the capacity provisioned to privately and directly exchange traffic between two parties inside carrier-neutral colocation data centers.

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