Market Study Shows Companies Are Leveraging Interconnection to Compete in the Digital Economy as Data Explosion Gets Further Distributed at the Edge
The latest Global Interconnection Index (GXI), an annual market study published by Equinix, predicts private connectivity at the edge is forecast grow by 51 percent compound annual growth rate (CAGR), and expected to exceed a total bandwidth capacity of more than 13,300 Tbps, which is equivalent to 53 zettabytes of data exchanged annually. This is enough bandwidth to support every person on earth simultaneously downloading a complete season of Game of Thrones in ultra-high definition resolution in less than a single day. The GXI market study also finds that interconnection bandwidth is an essential component to digital business and validates that to compete in the digital economy, companies must address growing data volumes and increasing data exchange velocity across a rising number of clouds and business ecosystems.
“People, software and machines are creating and consuming data faster and in all the places where we work, play, and live,” said Rick Villars, Research Vice President, Datacenter & Cloud, IDC. “The significant increase in data created, aggregated and analyzed in these new locations is contributing to a major shift away from deploying IT in traditional corporate datacenters. Enterprises need access to robust, modern datacenter facilities near the edge locations where businesses want to deploy dedicated infrastructure and interconnect to the increasing number of clouds, customers and partners that are at the core of digital transformation efforts.”
The GXI Vol. 3 delivers insights by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic, with a diverse set of partners and providers, at distributed IT exchange points inside carrier-neutral colocation data centers. The GXI finds:
The ability to exchange large volumes of data through interconnection is essential to compete in the digital economy
- The GXI forecasts that in order to manage the growing volumes of data, enterprise consumption of interconnection bandwidth will grow at a 64 percent CAGR, outpacing other forms of business data exchange.
- The GXI shows that to manage increasing volumes of data, enterprises are on average deploying in nine locations, with a total of 340 interconnections to networks clouds and business partners.
- A separate independent survey commissioned by Equinix of more than 2,450 global senior IT professionals, found that almost half of global IT decision-makers believe interconnection is a key facilitator of digital transformation, and nearly half of all global IT decision-makers believe interconnection can help their business to gain competitive advantage within the marketplace.
Distance is the biggest performance killer for digital business
- Deploying direct, private connections at the edge propels both application performance and user experience.
- According to the GXI, today’s latency-sensitive workloads require response times ranging from <60 to <20 milliseconds, forcing IT infrastructure closer to the points of consumption.
- According to the Equinix survey, more than one-third of global IT decision-makers are using interconnection to increase speed of connectivity.
Leading businesses are gaining competitive advantage using a combination of key interconnection deployment models
- Interconnecting to multiple network providers across multiple edge locations is the most prominent use case for interconnection bandwidth and is expected to grow 4x by 2022.
- Interconnecting to multiple clouds and IT services across multiple edge locations and cloud regions represents the next largest and fastest use of interconnection bandwidth and is predicted to grow 13x by 2022.
- Interconnecting to digital business partners for financial services, content and digital media and supply chain integration makes up the remainder of interconnection bandwidth use cases and is forecasted to grow 5x by 2022.
The GXI provides significant insight into geographical differences in how growth in interconnection bandwidth at the edge is accelerating in different regions of the world.
- Global interconnection bandwidth is predicted to reach 13,300+ Tbps by 2022, a predicted 51 percent CAGR and a 7 percent increase over the previous year’s projection.
- Is predicted to grow at a 46 percent CAGR and leads in capacity globally, contributing to 38 percent of total interconnection bandwidth. North America is the most digitally mature region and is focused on further digitizing traditional industries such as Manufacturing, Energy, Banking and Insurance.
- Is predicted to grow at a 51 percent CAGR, contributing 22 percent of interconnection bandwidth globally. Strong data compliance regulations are unlocking data exchange and growth of interconnection bandwidth in Healthcare & Life Sciences, Government & Education, and Business & Professional Services.
- Is anticipated to grow at a 56 percent CAGR, contributing more than 29 percent of interconnection bandwidth globally. In Asia-Pacific, Cloud & IT Services consumes the most interconnection bandwidth and is forecast to outpace growth of clouds in all other regions.
- Is expected to achieve a 63 percent CAGR, contributing 11 percent of interconnection bandwidth globally. In this region, Content & Digital Media is expected to outpace other regions in interconnection bandwidth adoption.